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  • Aho & Associates

Five Steps to Hiring the Right Bookkeeper

Let’s take a test.  Come on!  It’ll be fun:

Which of the following occupations are not subject to special California state licensing and mandated training?

(a) Manicurist (b) Security guard (c) Bookkeeper (d) Automotive smog technician (e) Tattoo artist

As tempting as it might be to choose (e) tattoo artist, California requires specialized licensing and training/education for all of these occupations except bookkeeping.

Thanks to the lack of any licensing requirements in California, anyone, regardless of qualifications or criminal background, can call themselves a bookkeeper, which means business owners have little to go on when attempting to determine who can be entrusted with their financial information and hard earned cash.

A bookkeeper can be an asset to a business, or they can be inadequate, incompetent, or downright criminal.  In one recent local example, a bookkeeper allegedly used company funds to pay more than $400,000 in personal expenses over six years before the owners became suspicious, fired her, and called the police.  Many similar misdeeds go undiscovered altogether until it's too late and the money is gone.

Even if not criminally inclined, some bookkeepers act as little more than glorified data entry clerks who fail to catch errors or suggest larger organizational improvements that could prevent problems or enhance business growth. This shortcoming is particularly significant for small business owners who rely on their bookkeepers as their sole source of daily financial expertise – a role many bookkeepers are ill-equipped to play.

Given the high stakes involved, business owners should treat the bookkeeper recruitment process seriously and use every available resource to vet potential hires. To maximize their chances of hiring a bookkeeper who will help, not hinder, their bottom line, business owners should:

1. Search the right sources for candidates.

Business owners who post bookkeeping positions to Craigslist or are casting wide nets. While they may catch a keeper or two, business owners are likely to receive a flood of resumes from minimally-qualified or simply fraudulent candidates.

Instead, business owners should look locally for established firms or individuals and use their local and online professional networks to seek referrals; they may even consider a placement agency to find the right fit. If the bookkeeper can work remotely, business owners may also consider tapping talent pools such as Upwork or Outsourcely, both of which offer premium services that pre-screen candidates.

2. Quiz prospects about integrity.

Integrity isn't a quality that can be quantified on a resume, yet it's arguably the most important trait a bookkeeper should possess.   Warren Buffet once said:

“In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without integrity, you really want them to be dumb and lazy.”

To put it another way, you couldn’t find a worse bookkeeper than one who is dishonest, intelligent, and ambitious.

Business owners must do their utmost to gauge whether candidates can be trusted with confidential information, access to financial accounts, and personnel matters affecting payroll.

Asking questions about how financial information will be safeguarded is one way to assess whether prospective bookkeepers are aware of the sensitivity required for their role. Another is to ask candidates to discuss what internal controls they've found effective for preventing fraud, or to recommend what procedures they might change to ensure adequate oversight of their activities. Candidates shouldn't hesitate to suggest separation of duties and other fraud prevention best practices, even if such practices invite more scrutiny of their work.

3. Look for relevant industry experience.

Experience within a particular industry can reduce the amount of time new bookkeepers need to ramp up and learn the ins and outs of a business's financial records. Whether an organization regularly hires seasonal contractors, receives grant monies or government funds that must be closely tracked, deals in intellectual capital, transacts purchases internationally, or contends with any number of other particularities, business owners should look for candidates with experience in similar scenarios.

Relevant experience with specific accounting systems or software can also shorten the learning curve. Technology certification and third-party accreditation can demonstrate competence, although business owners should consider giving candidates trial tasks to further gauge readiness for the job.

4. Conduct due diligence on references.

References can provide valuable insight into the integrity, competence, work habits, and even communication style of potential bookkeepers, so business owners should be sure to avail themselves of these resources. But in their zeal to collect positive input about promising job candidates, business owners shouldn't forget to do due diligence on the references themselves.

In one instance, a CFO was fired for embezzlement from one firm, only to be hired by another thanks to a job reference from someone who had left the company before the embezzlement and the discharge, and didn't know about either of them. To avoid such a situation, business owners should ascertain whether the person giving the reference still works at the firm the candidate listed, whether they are or were the candidate's direct supervisor, and how closely they oversaw the candidate's work.

5. Finally, be prepared to invest, but know what your money won’t buy.

There’s the adage that you get what you pay for.  With an outsourced bookkeeper that’s ... well ... mostly true, at least when it comes to technology, staffing, offices, resources, etc.  Here’s the thing:  price doesn’t guarantee honesty.   Just as there are cheap scoundrels, there are also high-priced thieves.

On the other hand, price can be an indication of professionalism and an attitude that the bookkeeper takes his or her own business seriously—in contrast to, say, someone who wings it part-time in their pajamas with their clients’ books spread over the breakfast table.   Bookkeepers who don’t take their own businesses seriously will not take their clients’ businesses seriously.

Small business owners should look for a professional outsourced bookkeeper who has a track record with other clients who are willing to give candid opinions of the bookkeeper’s integrity and competence.

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