There are a lot of bad bookkeepers out there and worse is they do not even care! As they are not regulated or have to abide by the code of ethics CPA do; they can not only bleed you wallet dry but sink your business as well. Have second pair of eyes over their shoulder might just save you an aggravation that may become an irreversible business mistake by entrusting a bad bookkeeper.
If your bookkeeper is always behind on the books and cannot provide you with your financial statements on a timely manner...watch out you are definitely on the "back-burner"
Beware of fixed fees; bookkeepers working on these kind of arrangement will speed through their workloads! You will end up paying for sloppy data entry and hourly will end up paying more than what you pay your attorney. They have no incentive to become more efficient and get you an accurate profit and loss by the deadline you set together.
If your bookkeeper has no questions and never give you feedbacks..cut your loss right away all you may need is a data entry clerk
Your bookkeeper needs to accurately record your daily transactions as at the end of the day, they are more in tune with the financial side of the business operations. The bookkeeper should be actively communicating with you. As a business owner you should manage your time effectively towards running the business daily operation and be alerted by your bookkeeper for any red flags the numbers may present. Unfamiliar vendors or changes in deposits amounts may be the first sign that fraud may be committed or loans to the business be recorded as income. Experienced and professional bookkeepers need to questions these immediately.
Your CPA bill just get higher every year - You may wonder if your bookkeeper knows what they are actually doing
If your CPA ends up doing over a dozen adjusting entries, you probably need to ask your CPA to skim through the books in more details than they usually have to. Uncovering bad bookkeeping after years of "blind-folded" bookkeeping services may result in having to amend your prior years tax returns! CPAs get very frustrated when books are never improving and see that their prior years adjusting entries were never recorded by the bookkeeper. Their time is worthwhile, unfortunately, most end up eating their time as the client does not realize they are overpaying for bookkeeping services they should have received but were left with a big financial reporting mess.
If your bookkeeper does not understand how accounts from the balance sheet and the profit and loss statement are classified and how these accounts are affected by different transactions..time to call your CPA to assess their work on a monthly basis and have an experience bookkeeper step in.
Your bookkeeper might have a great personality and you completely trust her/him with all your sensitive financial data; but if she/he seem to speak fast and give you a bunch of gibberish terms to make you feel he/she knows what they are doing. Take a big breath and definitely have a brand new pair, maybe even two pairs of eyes to assess your bookkeeper's work.
We, at Biz-Wolf, decided to help our clients by adding bookkeeping/accounting services in order to have the financial statements available to our clients on a timely basis. Specially when the clients need to look for refinancing, or decide to sell their business, or take a new partners. Financial statements should be readily available or at least a draft with cash reconciled. Moreover, when tax season comes around, bad bookkeepers can cost thousands of dollars in extra taxes by not proactively communicating the business financial position to the owners and end up missing opportunities for the CPA to get tax strategies in place.
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