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How to tell if Your Bookkeeper Knows What They Are Doing

ON September 16, 2021

Your bookkeeper is an integral part of your team. You need to have confidence in their abilities and trust that they are doing their job correctly. The fact that you have hired a bookkeeper might indicate that it is an area of your business that you are not comfortable handling yourself. If that is so, how can you tell if your bookkeeper is doing a good job or if they know what they are doing?

Your bookkeeper should be helping you increase your margins by providing you with appropriate strategic advice. It is also important for them to be ensuring that your business is compliant with all Canadian Revenue Agency (CRA) regulations.

To know if your bookkeeper is doing all they can do to help your business succeed, here are some questions you should be aching yourself:

Are You Communicating in The Same Style?

Today, video meetings have become quite popular, especially since the start of the pandemic. They allow for a much more personal means of communication. Often, email and text messages fail to convey context, which can result in confusion and misunderstanding. With video meetings, more subtle visual cues come into play, which can play an important role in communicating.

If you seek this kind of interaction, but your bookkeeper only contacts you through the occasional email, you are not communicating effectively, which can result in you not being fully aware of what’s happening in your business. You and your bookkeeper should agree on a method that works best to keep you in contact.

Are They Responsive?

Few things are worse than urgently needing information and advice but having to wait an extended period for your bookkeeper to respond. This can adversely affect your business, so why does it happen? There are a couple of reasons.

Your bookkeeper may be disorganized. They may forget deadlines or have a bad habit of procrastinating. In many cases, they don’t have practice management software in place. Worse still, they may not consider your business a priority if you are not one of their top clients.

Are They Proactive With Their Advice?

As part of your team, your bookkeeper should be proactive in identifying potential issues and offering advice. This means asking questions and being aware of what’s going on in your business. If they are not doing this, they are not actively involved in helping you become more successful. It might be time to look for someone new who will take a more active interest.

Will They Show You The Books?

If your bookkeeper is hesitant to show you their work or let anyone see the books, that should send up a red flag. It’s possible that they are not managing the books correctly or worse, they could be stealing from you.

With cloud accounting software, you should always have access to all your information and should have the ability to log in and review your files at any time. If you do not have access and your bookkeeper is preventing you from gaining it, it’s time to replace them.

Are You Receiving Monthly Reports?

Your bookkeeper should be providing you with monthly reports. Your income statement (profit and loss) and balance sheet provide important information that you need to make decisions regarding your company’s financial health and growth. If you are not receiving these reports on time each month, your bookkeeper is not prioritizing you the way they should.

Have You Reviewed Their Qualifications?

Many bookkeepers are unfortunately lacking in experience, sometimes even lacking the most basic knowledge required to do their job. There is no regulatory body for bookkeeping in Canada and there is no obligation to take a bookkeeping course before taking on clients, though many will do so for various reasons such as providing credentials to their clients. Failing to check your bookkeeper’s qualifications can end up being a costly mistake.

Have You Received a Notice from The CRA?

Perhaps more than anything else on this list, this is a major indication that something is wrong. By the time you receive a notice from the CRA, your accounting is likely in trouble and you may be about to experience an audit. If so, it is probably wise to have a tax lawyer or an accountant ready to assist you. Having reliable professionals available to advise you through this process will be invaluable.

Your bookkeeper should be an active, engaged part of your team and Someone you can trust and rely on to help your business grow. If they don’t meet the standards mentioned above, or if you are dissatisfied in any way, it may be time to look elsewhere for help.

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