While I'm a strong advocate of hiring virtual assistants, there are two things that no entrepreneur should ever fully delegate: marketing and bookkeeping. The marketing and the bookkeeping of your business can easily make or break you (just think "new" Coke and Enron). That said, if bookkeeping is not your forte, hire someone to do it – you will save so much in frustration – just be sure to keep your fingers in the books.
If you choose to hire a bookkeeper, keep the following in mind:
1. Get QuickBooks.
For ease of use, I highly recommend using QuickBooks and hiring a QuickBooks ProAdvisor. QuickBooks ProAdvisors have taken certification exams to insure that they know the system. I have used QuickBooks both for myself and my clients since 1996 and highly recommend it for its ease of use/understanding.
The online version is great in that you can see the latest version of your books at any time and eliminate the annoyance of emailing files back and forth and wondering who has the latest version.
2. She must see both the forest AND the trees.
You want your bookkeeper to be detail-oriented AND to see/understand the big picture. She needs to know what happens consistently – every month – and update your books without bothering you for items she should know about.
At the same time, she needs to be astute enough to see the larger picture and warn you of any impending problems before they happen. If you purchase a piece of equipment, she should know how to properly enter it into your bookkeeping software to avoid problems – and therefore save time and money – with your accountant (and the IRS) later on.
3. She must know your industry.
You don't want to have to train your bookkeeper on your industry language, standard industry income or expense categories or other basics. The more up-to-speed she is, the faster she can hit the ground running and the sooner you will have good data. If she doesn't know your industry however, be sure to give her a rundown of lingo and how you refer to your customers/clients/tenants in order for you to get the most meaningful reports out of the gate.
4. She must provide timely reporting.
In hiring your bookkeeper, insure that you put in a provision for when you want to see monthly financials. The date will depend on when your bank month ends – give her a few days after that date to reconcile your accounts and produce reports. At a minimum, you want to see a profit & loss, balance sheet and cash flow statement.
Take the time to review the reports so you can spot any irregularities before they blossom into problems. Not sure how to read a cash flow statement? Get a check/electronic funds transfer (eft or "auto debit") transaction detail instead. It will help you see where the cash is going.
5. She must know accounting terms and still speak "English".
Your bookkeeper needs to know the difference between assets, liabilities, income, expenses and equity and be able to provide your accountant with the necessary data upon request. At the same time however, if you are not "numbers oriented", she also needs to be able to explain the financial statements to you in plain English.
6. She must be trustworthy.
Hiring someone to keep track of your bookkeeping requires a level of trust between you both. You need to feel comfortable that she will keep track of your information and maintain your confidentiality. At the same time, if she pays your bills and has access to your bank accounts, you must also trust that she will not abuse that privilege. And make no mistake, it is a privilege to have someone (particularly in a virtual relationship) trust you with their finances, their checkbook and their business.
Good business sense demands that you protect yourself "just in case". I highly recommend that, in addition to a confidentiality agreement, you insure that your bookkeeper is bonded and you get a copy of that bond.
7. She must have great communication skills.
If your bookkeeper will be communicating with your clients and vendors, she must represent your business as you would. Whether virtual or in-house, it's critical that your bookkeeper be a positive force that further enhances relationships. The question of money can, at times, be a sensitive matter. You need someone who recognizes that and communicates appropriately.
Always remember – these are your books and this is your business. While you may hire someone to manage the details of tracking your finances, and should do so if this is not one of your strengths, the ultimate responsibility for oversight is yours. Michael E. Gerber of the "E-myth" series said it best: "Delegate, don't abdicate."
Online Business Manager & Entrepreneur, Sandra Martini, publishes the 'Effective Entrepreneur' weekly e-zine. She also coaches small business owners to more efficiently manage their businesses while increasing profits and having fun. Sandra's coaching programs are available via teleconferencing, emails and telephone calls. For more information or to sign-up for 'Effective Entrepreneur', visit http://www.online-biz-coach.com today. Want to grow your business? Sign up for the FREE e-course "How to Write a Dynamic Marketing Plan" by sending a blank email to smartini-187175@autocontactor.com today. |
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