Bookkeeping is such an essential function because so much depends upon the the financial information that bookkeeping provides. Without this information, business owners can’t make informed decisions. And most often, it doesn’t make sense for business owners to handle every aspect of the bookkeeping themselves, so they need to delegate at least some of the work.
But if you aren’t careful when you delegate the task of bookkeeping, you open yourself up to fraud and other problems. Here are a few tips to help you navigate the perils of outsourcing or hiring a bookkeeper.
- Always stay involved. Review every report, and periodically look over the transactions to ensure everything looks right. Check a few transactions against your bank statements.
- Do your research. Do more than ask for references. Follow up and call references, and go beyond the people given to you by the prospective bookkeeper — find out who else the person or outsourced bookkeeping service has worked for and make calls to these additional people as well. Read between the lines: If someone doesn’t have anything much to say, there’s a reason. References and past employers or clients should have positive reports.
- Limit your bookkeeper to bookkeeping. Too often, business owners delegate too much to a bookkeeper. They want the individual to answer phones, or open and respond to email, or handle the physical mail. When you rely too much on one person, not only do you open yourself up to embezzlement and other issues, you also stand to lose too much if the person decides to change careers or even simply wants to take a vacation.
- Insist on timely, accurate reports. Does the bookkeeper always produce the reports on time and error-free? If the bookkeeper frequently making mistakes or tries to make excuses for why he or she can’t produce a report you need in a timely fashion, there may be more going on than meets the eye.
When you’re busy, it can be easy to overlook warning signs or rely too much on a bookkeeper. But a little time invested will pay off by ensuring you’re not opening yourself up to fraud.