You took an enormous risk starting a small business. Are you letting a lousy bookkeeper put it in jeopardy?

As a small business owner, the fear of failure is always in the back of your mind. When combined with the stress of financial management, that fear can turn into pure dread.

You’re an expert in your chosen field—you shouldn’t have to be an expert at balancing books, payroll, and forecasting, too.

And since you’re on top of things and aware, you’ve wisely outsourced your bookkeeping.

But have you hired a skilled bookkeeper?road warning sign with text risk in front of storm cloud background

The last thing you need is an outsourced accountant tanking your trust and dreams.

We’ve pulled together a list of red flags and warning signs to help you determine what kind of bookkeeper you’ve hired.

  1. Your Bookkeeper is Constantly Out of Reach

    As a small business owner, you need answers to finance-specific questions. And you need those answers fast. When your bookkeeper doesn’t return your phone calls or emails, it’s a significant problem.

    Trust is essential when it comes to outsourced bookkeeping.

    If you notice long stretches between replies from your bookkeeper, it’s time to ask why. There could be many reasons for the communication lapse. The bookkeeper might be overwhelmed or lacking communication skills. Or, it could be more serious.

    Maybe they don’t care?

    You need to set ground rules (if you haven’t already) and communicate your expectations around acceptable communication timelines

  2. They’re Constantly Behind on the Books

    It’s easy to lose track of finances when your bookkeeper is continuously behind on the books. You might start making fatal errors like spending more than the business earns.

    If your books are behind, then your business is behind. Growth is almost impossible when you’re regularly playing catch-up.

    You must set deadlines to ensure that your bookkeeper is on track if you want your small business to thrive.

  3. Your Bookkeeper is Panicked

    Tax filing might give you a panic attack, but it should be second nature to your bookkeeper. The accountant should remain calm, relaxed, and collected under every circumstance.Panicked and Overwhelmed Booker

    If managing tax documents, payroll information, and quarterly payments to prepare for tax prep causes your bookkeeper to become frazzled, you have a severe problem.

    A panicked accountant is a business threat.

    Their panic could indicate inexperience. And the last thing you want is a bookkeeper who is in over their head

  4. They Never Approach You With Ideas

    You’re so swamped with everyday business operations that you might be neglecting growth opportunities.

    Your bookkeeper should have a deep understanding of your day-to-day financials. They should also provide you with helpful feedback. Should you lower costs or increase revenue? A great bookkeeper will have the answers.

    If they aren’t coming to you with ideas and solutions to help push your company to the next level, ask them why.

  5. They Don’t Understand the Basic Terminology

    This one seems like a no-brainer, but many bookkeepers don’t have the slightest clue when it comes to basic accounting terminology.

    It’s not your responsibility to explain what cash vs. accrual means or the definition of accounts receivable.

    If your accountant doesn’t know the term “reconciliations,” run away!

  6. They Don’t Understand the Reports

    Your books are crucial for recording financial transactions and activities like sales, purchases, earnings, payments, etc. Recorded data allows you to determine monthly/annual revenue and anticipate and calculate payroll and tax payments.

    If your bookkeeper doesn’t understand your reports, accounts can be overdrawn, and you might find yourself in hot water with the IRS.

    Nobody wants an IRS audit.

    Failing to keep-up with numbers leaves you without a grasp of the money coming in and out of your business.

  7. They Constantly Pass Blame or Make Excuses

    It can drive you crazy. Your outsourced bookkeeper dropped the ball, and rather than getting a simple explanation, they make excuses and shift responsibility.

    Managing failure and disappointment is natural. But, there is a thin line between explanation and excuse, and the latter only delays the solution and blocks progress.

    As a business owner, you require a bookkeeper who can take accountability and execute a proper response to any mistake. A competent bookkeeper will be able to address an error and take control in making it correct.

  8. They Don’t Understand Reconciliation

    Proper bank statement reconciliation is crucial for every small business.

    When your numbers are off and discrepancies pop-up, your bookkeeper probably isn’t performing reconciliations regularly – or at all.

    Critical errors could go undetected if nobody verifies that your balance sheet transactions correspond with general ledger transactions.

    Improper reconciliation makes you susceptible to fraud, costly bank errors, and unauthorized withdrawals.

  9. Your Accountant Doesn’t Ask Questions

    Your outsourced bookkeeper must understand how your company operates to identify cost-cutting opportunities. They also need to ask questions to have this understanding.

    If your bookkeeper is afraid to ask questions out of the fear of appearing unqualified or inexperienced, they’re letting ego get in the way of good business tactics.

  10. They’re Unable To Provide Answers To Their Work

    You’ve noticed bounced checks. And this morning, you saw old transactions in your Quickbooks undeposited funds windows! What is going on?

    Your accounts probably aren’t managed regularly or adequately reconciled by your outsourced bookkeeper.

    When you ask your bookkeeper what’s happening, they can’t provide answers or insight.

    Minor mistakes are inevitable, but a good bookkeeper is willing to go over routine tasks with you to establish what went wrong.

  11. They Don’t Let You See the Books or Give You Access to Your Accounting System

    Is your bookkeeper holding your records hostage? Is looking at your data like pulling teeth?

    With today’s cloud-based accounting software, there’s no reason you shouldn’t have complete data access.

    Put your foot down. Tell your accountant you want shared-access to the books. If they are reluctant to share that access with you, it’s time to work with someone who will.

  12. They Don’t Understand Balance Sheets

    The business has gone up, but your cash balance doesn’t reflect the increases. Where is that cash? The answer should be on your balance sheet.

    Not everyone knows what to look for on their balance sheet or profit and loss statement. Still, an experienced bookkeeper will analyze the assets, liabilities, and equities data.

    Your balance sheet is a snapshot of your business’ financial health. If you have any trouble identifying cash-flow problems, it might be time to seek another bookkeeper.

  13. Coding Inconsistencies

    Incorrect and inconsistent coding can take hours to rectify and cost your company thousands; it’s usually an honest mistake.

    But entering incorrect accounting codes is a significant problem. Coding helps classify, record, and group all your transactions.

    Wrong accounting codes can cause you to miss out on tax savings. Incorrect coding might also impact tax claims. In extreme circumstances, it can indicate your bookkeeper is stealing money. Either way, misclassifications can land you in hot water.

  14. Your Accountant Is Patronizing

    The person handling your finances must be the expert. But do you need that experience and expertise delivered with condescension?Patronizing Accountant on Phone with Client

    Nobody likes being talked down to – the behavior isn’t conducive to a productive workplace. You wouldn’t let your staff treat you poorly, so why let your bookkeeper get away with it?

    Be open with your bookkeeper. Let them know the terms with which you are comfortable speaking. You shouldn’t feel belittled because you aren’t up on the latest financial jargon.

  15. Your Bookkeeper is Controlling

    Have you noticed that your bookkeeper wants complete, unsupervised control of your business’ financial management? If so, it’s time to start investigating why.

    As we’ve already mentioned, trust is critical. When a bookkeeper wants to take control of everything inexplicably, your confidence can be a little shaken.

    Handing over unsupervised access to your bookkeeper is like running your company blind. Some bookkeepers wind up stealing from a business because the business owners made it easy.

    Your bookkeeper should be a business partner. You can avoid theft and mismanagement through collaboration.

If you’re feeling uncertain about your bookkeeper, it may already be too late!

Is it time to find a new accounting team? Team 80 offers full transparency, and we might save you money. Call us today!

Team 80 CEO Sarah Sinicki

Sarah Sinicki

Team 80 CEO

Sarah is a leader focused on serving small businesses in various industries. She has worked with a multitude of companies over the last 25 years and loves helping business owners find success. Sarah is genuinely committed to unburdening Team 80 clients so that they have the freedom to focus on their business. In her free time, you can find her spending time with her husband, two kids, and her Yorkies, Marley and Ziggy. When she is not helping business owners, you can find her in a Reb3l Groove class dancing it out. Sarah is also an avid Colorado Avalanche fan, so if you ever want to talk about hockey, she’s your gal.

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