10 Questions to Ask Before You Hire a Bookkeeper

15 June, 2022
Meryl Johnston

Meryl Johnston

6 minutes

If you are like most eCommerce entrepreneurs we talk to, you know you need to hire a bookkeeper, but you struggle with how to get started.

This is not surprising since most business owners simply don’t know what they don’t know when it comes to asking the right questions before they hire a bookkeeper (or change bookkeepers).

This is a major risk for your business.

Would you rush into hiring staff or systemizing your customer onboarding process without carefully considering what the best choices are for your business?

We sure hope not. 

So we wouldn’t recommend that you rush into hiring a bookkeeper without having a detailed hiring process to determine whether they will be the right fit for your business.

In this guide, we’re sharing what you need to consider when hiring a bookkeeper (or a bookkeeping firm), along with a handful of questions to ask. 

When should you hire a bookkeeper? 

In our experience, many eCommerce business owners think they need a freelance bookkeeper when in reality, they would be better served by another hire, like a tax accountant, a virtual CFO, or an eCommerce accounting firm, like Bean Ninjas. 

For instance, when you are first starting out, your first financial hire should be an accountant, NOT a bookkeeper that can provide strategic advice and help with tax planning and tax filling. As your business grows to six figures, then you may want to bring on an experienced bookkeeper or a professional bookkeeping service to assist with inventory management, cost of goods sold calculations and keep your business finances in order year-round. This ensures you can pull financial reports, like profit-and-loss statements and income statements, whenever you need them and not have to worry about having inaccurate numbers.  

What does a bookkeeper do? 

Instead of having to focus your time on basic accounting tasks, hiring a bookkeeper allows you to focus more on the core principles and strategies of the business instead, so you can keep your eyes on the long term goals of the business.

When you use a bookkeeper for business, things will be much more accurate as well. However, not all bookkeepers are created equal, and not everyone can satisfy your unique business needs, which is why the interview questions below will prove to be important as you begin your search for the best bookkeeper for your business.

9 questions to help you decide if a bookkeeper is right for you or not

1. What is the scope of the bookkeeping work?

This may sound like a simple question, but there is a big variation between the services that bookkeepers offer. Your requirements will also vary depending on your own skills and the scope of the work your accountant completes.

Some bookkeepers act as management accountants and can analyze financial statements and other bookkeeper’s skills are limited to data entry.

Consider who will do the following:

  • Bank reconciliation (And how often? Daily / weekly / monthly)
  • Entering supplier bills, categorizing company expenses, and paying suppliers
  • Raising sales invoices and following up with debtors
  • Checking the coding of transactions to ensure they have been coded to the correct account and with the correct tax treatment
  • Lodging / filing US sales tax, GST or VAT
  • Prepare financial documents such as Profit and Loss and Balance Sheet
  • Help to interpret the reports and tell the story behind the numbers

2. Are they registered and qualified?

You will find that some bookkeepers will have a diploma, accounting degree or may even be Chartered Accountants or CPAs.

If your bookkeeper is going to be lodging your BAS in Australia then, at a minimum, your bookkeeper should be a Registered BAS agent. BAS agents are registered with the Tax Practitioners Board.

The qualification and registration requirements differ from country to country. Be sure to ask your bookkeeper what their qualifications are and whether they are registered to lodge / file sales tax in your country.

Remember, some bookkeepers are specialists while others are more generalists. When hiring, you need to determine the specific needs of your business to ensure that whoever you hire can handle the workload. If there are more challenging or difficult aspects to your bookkeeping, you will want a more specialized bookkeeper on your payroll.

3. What is their level of expertise?

You want your bookkeeper to process your accounts accurately and to communicate with you in a way that doesn’t take up much of your time. You don’t want to get to the end of the financial year and have to pay extra to clean up a mess.

A good bookkeeper has established financial processes that they follow each time to ensure they process transactions accurately. 

You could also ask to talk with one of their clients or an accountant that they work with. Plus, it never hurts to really dig into their expertise and work experience to find out where their strengths and weaknesses lie.

4. How familiar are they with your industry?

If your bookkeeper is unfamiliar with eCommerce businesses, there will be a steep learning curve. 

We recommend asking whether they have any other eCommerce clients (past or present) and ask them to give a few examples of common bookkeeping issues that come up related to your industry and how they would resolve them.

Pro Tip: Depending on your business, you may want to take this even further by working with a bookkeeper who knows the ins and outs of the eCommerce platforms and channels you sell on.  For example, here at Bean Ninjas, we specialize in working with eCommerce businesses on Shopify, WooCommerce, and Amazon FBA.

5. How do they communicate with their clients?

What are they like to communicate with? Are they clear and concise, and speak or write in language that makes sense to you?

Not to mention, make sure to ask how they normally communicate with their clients. Then, make their style meshes with your team? .

For instance, if you prefer detailed Loom videos that you consume at your own time and your bookkeeper is used to picking up the phone every time they need something from you, this can create problems down the line. 

6. What can you expect around delivery and response times?

A common complaint about bookkeepers is that they can be slow to respond to emails and that the bookkeeping isn’t completed to a set schedule.

Ask about what you can expect each week / month from them and what the expected response times are you to your questions.

Here at Bean Ninjas we streamlined our operations in order to improve our response times.

Related reading: Top 7 Bookkeeping Frustrations For Business Owners

7. Are you hiring the bookkeeper directly or working with a full-service accounting firm?

Hiring an accounting firm rather than a virtual bookkeeper helps spread the risk. However, with a bookkeeping team, it is likely that the person you are scoping out the bookkeeping job will be different from the team member who does your processing.

In this case, ask about what quality control and internal review procedures they have.

For example, at Bean Ninjas, all client work is reviewed by a Team Leader or Manager before going to a client.

8. How do they protect their clients’ confidential data?

You are going to be sharing sensitive company and financial information with your bookkeeper, so you need to be able to trust them. This starts by asking questions about how they protect their clients’ accounts, their internal controls and segregation of duties.

Note: The term ‘segregation of duties’ means that rather than having one person responsible for every aspect of a role, split the responsibilities among multiple people.

For instance, we recommend that you create a segregation of duties between the role of the person completing bank reconciliations and the person raising invoices or paying bills.

In addition, we recommend following the adage of “Trust but Verify.” This means checking and monitoring all of your systems at least quarterly to ensure work is being completed and they aren’t encouraging any fraudulent activity. 

Related reading: How to protect your business from fraud using Xero

9. How do they price their services?

How will the bookkeeper or accounting firm charge? Is there a fixed monthly fee, or do they charge by the hour?

The trend in bookkeeping is to charge a fixed rate. If this is the case, make sure you are clear about what is and isn’t included in that fixed rate.

Related reading: The Future of Cloud Accounting and Financial Services

Finding a competent bookkeeper for your eCommerce business 

In summary, the right bookkeeper for your business not only possesses the technical knowledge needed to complete the job successfully, but also has industry specific experience.  

If you are ready to get your eCommerce books in order, our team can help. Schedule a free consultation here.

Download Xero eCommerce Toolkit

Posted By

Meryl Johnston

Meryl Johnston

Meryl is a Chartered Accountant, entrepreneur, and surfer! The Bean Ninjas mission: Creating freedom for entrepreneurs through stress-free business finances.

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