What are some ways for an entrepreneur to assess the performance of their Bookkeeper?
1. They’re always behind in responding to you.
It will be frustrating if the bookkeeper takes more time to provide you with your company’s financial information. This goes along with general professionalism, which you should be able to expect from your bookkeeper. However, if your bookkeeper takes forever and a day to answer your emails or return your calls, they’re probably hiding something, or they don’t care enough. Both are bad for business.
You can ask them why there’s a lag and set clear expectations for when you need a response. You’ll better understand how to proceed if they’re too busy or have too many clients.
2. They’re always behind on the books.
This sign is usually related to the first. If your bookkeeper is always scrambling to close the books at month-end, or if it’s April and your February and March books still need to be squared up, you probably need a better bookkeeper. Things come up—just as with any job or position—but a good bookkeeper looks for opportunities to get caught up and maintain deadlines.
You can set clear deadlines and hold your bookkeeper accountable to them. Check in regularly to make sure they’re on track. And if they can’t meet your deadlines, find a solution that will.
3. They need help understanding basic bookkeeping terminology.
Believe it or not, we’ve heard stories about bookkeepers who didn’t know what “reconciliation” meant, which is outrageous. Your bookkeeper should know correct bookkeeping terms, including cash and accrual-based accounting, accounts payable/receivable, assets, liabilities, etc.
You can Speak to your bookkeeper about what you want them to use. This will force them to seek an understanding of the terms. You must consider replacing them if they do not know the correct terminology.
4. They must provide helpful reports or know what a report means.
Regarding your company’s books, accurate, timely, and insightful reporting is just as crucial as reconciling the books and categorizing transactions. An effective bookkeeper runs reports regularly and doesn’t hesitate when a new report is requested. You should periodically receive all your business’s financial statements. These financial statements help you know the economic health of your business and make your financial decisions.
What you can do: Work with your bookkeeper to establish when you need each report and hold them to those deadlines. They should be able to deliver on time and without much effort. If that’s a problem, you need to replace them.
5. They don’t let you see the books.
Sometimes, bookkeepers become so protective of their work that they’re unwilling to let anyone else see the books. This is a huge sign that they’re hiding something, like mismanagement of your books, or worse—they could be stealing from you. A lousy bookkeeper will want to keep you out of the know, and they’ll likely avoid you when you want to see the books.
What you can do: Demand oversight of the books and take ownership of account login credentials.
6. You bounce checks or have declined payments and must figure out why.
This is big because your company’s ability to function depends on your accounts being reconciled and managed correctly. One returned check is too many, and it demands investigation into what’s going on with your books. Again, if your bookkeeper is afraid to give you complete insight into the books, they must go.
You can review your accounts before making large purchases and work with your bookkeeper to ensure everything is current.
7. They find excuses or pass the blame.
- “Well, whoever did your books before me didn’t know what they were doing.”
- “I thought that was intentional, so I just left it.”
- “No one told me to run the P&L statement every month.”
- These are all signs that you have a terrible bookkeeper because they show an apparent lack of independent thinking, which might be true.