What You Should Look For In A Bookkeeper – It’s Not Just About Skill Set!
February 5, 2010
By Alycia Edgar, Coastal Accounting Services
Have you resolved to improve the management of your business this year? Perhaps you’ve realised that you can’t be responsible for everything? Bookkeeping is often one of the first tasks that business owners outsource. Unless you’re a bookkeeper, it’s most probably something that nags at the back of your head all the time, stopping you from focusing on what you do best. However, outsourcing your bookkeeping can be a scary idea. Handing over your finances to someone else requires trust: trust in the individual and their processes.
Ultimately a bookkeeper should be part of your team, someone who can do your bookwork but also understand your business enough so that what they do has an impact on the growth of the business as a whole. Obviously bookkeepers require certain qualifications and skills, but what are the personality traits that you should look for when hiring a bookkeeper? For me this is the most important question. Anyone can do most of the work at a basic level, after all you completed it yourself at some stage, but who can do it really well? Sure, the skill set is a must but what differentiates a basic bookkeeper from a bookkeeper that is an integral member of your team?
Ideal traits of a brilliant bookkeeper
- Perfectionism
- Attention to detail
- Tidiness
- Willingness to follow up
- Caring nature
- Ability to prioritise
These traits ensure that:
- Statements are checked
- Stray invoices are investigated
- Files are kept in an orderly manner
- Payments are chased up
- Items are allocated to the correct accounts
- Unusual items are queried
- Paper is organised regularly
- Your bookwork is treated as if it was their own
- When cashflow management is required they can manage this for you
Why is this important? It can save you both time and money. If your bookkeeper can maintain your bookwork to the standards above, not only will you save time on chasing up queries but also money on your accounting fees. If they can manage your bookwork efficiently and methodically, your accountant will have a clearer picture of your business when completing your tax. And you’re not paying your accountant high hourly rates to do bookwork that your bookkeeper can manage.
So when choosing your bookkeeper, rather than just relying on skill set, determine whether you would prefer to have a team member that is an integral part of your business. Make sure to find out if they have the above personality traits. You could even talk to existing and past clients of theirs and get a feel for whether they would be the right fit for you. Once you’ve found a great bookkeeper, you’ll never look back!
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Alycia Edgar - Coastal Accounting Services
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| Phone: | 0403 983 529 |
| Email: | alycia@coastalaccounting.com.au |
| Twitter: | www.twitter.com/alyciaedgar |
| Blog: | www.numbersarelife.com |
| Member Profile: | See Alycia’s Member Profile |
It’s Your Money, Collect it!
February 1, 2010
by Julie Wise, The SilverOwl
Recently, I had a client tell me
‘your invoices are well laid out – especially your payment terms. Can you improve mine?’
Getting paid. Isn’t that the ultimate goal from each and every sale? It had better be, or you are in the wrong business!
Although there are no absolute guarantee, there are things you can do to reduce the incidence of non-paying clients. Don’t ignore creating and enforcing a sound payment policy.
In itself, a strong payment policy will not loose you good business. Good customers aren’t frightened off as they understand that as long as they pay on time the terms do not apply. So, don’t fall into the trap of believing that you need to offer relaxed payment options otherwise your customer will go elsewhere. The only thing you risk losing are clients that are not paying.
Some of your options may be limited because of your service or product but no business is prohibited from collecting their money in a reasonable time frame. The following list will help you formulate your company’s sound payment policy:
- Do you clearly explain payment terms to your customers before you start to work for them?
- Does your business lend itself to offering a discount for upfront payment vs. invoice in arrears billing?
- Does your business also lend itself to offering bonuses or discounts for purchase of prepaid credits?
- Do your customers sign a contract for your services?
- Does your contract clearly state payment terms, - including interest rate, late penalties and collection fees?
- Does your invoice clearly re-state these payment terms?
It's Your Money, Collect It! | Julie Wise
Do you order a credit report on new customers - especially those with large orders? You should! This is not difficult to do, can be done quickly and has saved many businesses. The reasons why are a blog topic by themselves. So we’ll do that another day.
The cost of using a solicitor, who writes plain english terms and conditions, to review your contracts and invoices will be recovered the first time you are faced with forcing a customer to pay.
Another big problem is that most businesses wait too long before attempting to collect their money. Two main reasons for this. Firstly, this is because most don’t have payment reports being produced daily. As a business owner its your obligation to know who has and who has not paid -bso ask your bookkeeper to setup a daily payment report of payments due that day and all overdue payments. It is not unreasonable to call your customer immediately they miss a promised payment. Or to even ring repeat offenders the morning a payment is due to remind them.
The second reason why we wait too long is because invariably the SME owner gets involved in the effort to collect funds from delinquent accounts. It is a role that most people find uncomfortable and unless you are trained in collections its unlikely that you are any good at it.
Unfortunately, waiting just makes it harder to collect. So once you have determined that you cannot collect your money, engage a professional debt collection agency to handle the debt and move on with running your business. Spend your time wisely!
Even if you have to pay 25% of the money to the collection agency, you are better off than holding onto the debt. An easy way to calculate whether the cost of a professional debt collector will be worthwhile is to use the following example and formula:
Example: - Your customer owes you $2000
- You hold on to a delinquent account hoping your customer will pay:
- You collect nothing,
- You pay nothing,
- 100% of nothing = $0.00
- You turn the debt over to a collection agency after making several calls and sending letters :
- The agency collects $2000.00,
- You pay 25%,
- 75% of $1000 = $1500.00
Obviously, you are better off with $1500 rather than nothing and financial worries.
Assuming that you have provided your services or product as agreed, your customer should have no qualms in paying you promptly under the terms of the sale. So clearly stated terms and careful credit analysis will be large factors in your ability to keep your business on a sound financial footing.
Don’t be afraid to collect when payments are due - it’s your money!
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Julie Wise - The SilverOwl
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