A Publication of WTVP

Do I need a bookkeeper? What should the job duties include? How do I review his or her performance? These may be some of the questions that arise when you are thinking about hiring a bookkeeper for your small- to medium-sized business. The following are tips which will help maximize the benefit you receive from having a bookkeeper on staff.

You may be asking why a bookkeeper is necessary when there is easy-to-use accounting software available that will practically do the job by itself. While software is very helpful in maintaining your accounting records, a good bookkeeper will be able to use the software properly and provide you the best reports and information the software has to offer. For example, the software does not tell you how to properly categorize your business transactions or how to record a special transaction, such as the trade-in of a piece of equipment on the purchase of a new one. Also, a business owner’s time is better spent growing the business and generating sales rather than wrestling with accounting software.

A bookkeeper is responsible for seeing that all of your business transactions are recorded in the various accounts, ledgers and journals. These transactions create the general ledger, which is used to produce the company’s financial statements. The proper maintenance of the general ledger is an essential task of the qualified bookkeeper. This maintenance includes periodically reconciling certain general ledger accounts, consistent posting of similar transactions, recording any adjustments provided by your CPA and having knowledge of what makes up each account in the general ledger.

To help your bookkeeper succeed in his or her job, it is essential that job duties and expectations are clearly defined. Coming up with these may be challenging and will vary between businesses. If you need assistance with this task, you can contact your CPA or other business advisor. In general, you will need to put in place some timelines of when certain tasks should be completed. Examples of this would be completing the bank reconciliations within three days of receiving the bank statements, completing the monthly closing of the general ledger by the 10th of the month and providing financial statements to management by the 15th of the month.

There are several ways to determine if your bookkeeper is doing his or her job and taking care of your accounting records. One is for the owner or someone unconnected to the accounting function to periodically review key reports. The details of sub-ledgers such as the accounts receivable aging and accounts payable aging reports should be reviewed and the totals compared to the balances in the same general ledger accounts. The bank reconciliations should be reviewed, paying special attention to any old, outstanding items which have not cleared the bank and matching the balances to the cash accounts in the general ledger. Another way to check the performance of your bookkeeper is to ask your CPA. Since your CPA sees the accounting records of many businesses, he or she will be able to give an opinion on the quality of the records they receive from your bookkeeper.

The following are some more specific criteria that could be used to evaluate a bookkeeper’s performance:

Having a qualified bookkeeper could save the company money. A qualified bookkeeper will be able to provide timely reports for management to make key business decisions that could affect the profit of the company. When requested by your banker, an auditor or your CPA, accurate reports which make these dealings run smoothly will be provided. This could expedite the granting of a business loan, alleviate further questions from an auditor and eliminate the need for your CPA to spend time cleaning up or reconstructing the accounting records. iBi