5 Signs You Have a Bad Bookkeeper
Having a competent bookkeeper could be the difference between steering your business to new growth and letting it spiral out of control, like a Messchersmit crashing into the German hillside. The bottom line is that you as the business owner must have confidence that your bookkeeper is doing their job well and has your company’s interests in mind. Their daily work could be the difference between losing a client or missing a growth opportunity, its that important so read on.
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If you want to know just how bad things can get read my other articles and blogs about the ugly stories business owners have told about bookkeepers & accountants who have ruined businesses by providing incorrect information, falsifying records, stealing, embezzling, and many others. Take my advice its better to read about it than have it happen to you.
How do you know if you are quietly being taken advantage of? For a busy business owner it can be hard to tell. When you have what feels like a million things you have to take care of, you have to have a high level of trust in your bookkeeper that he or she operates with a high level of ethics and responsibility to you the owner. You simply do not have the time to be worried about the accuracy & quality of your numbers and whether your bookkeeper is skimming your profits.
Maybe you might not know what good bookkeeping actually looks like let alone the warning signs that your bookkeeper is bad at their job. To help, I've put together my list of telltale signs to help you determine if you’ve hired a bad bookkeeper or one worth keeping.
1. THEY’RE ALWAYS LATE IN RESPONDING TO YOU.
This is number one for a reason and the reason is simply this: If you bookkeeper is always behind in responding to you then they are behind in reconciling your books, there is a problem or they are hiding something. How many times have you texted, e-mailed or called your bookkeeper with a simple request or update only to have them respond days or a week later or in some cases not at all? When they do contact you they tell you that the reason they didn't get back to you sooner is because they were really busy. STOP! RED FLAG! There is nothing positive about not responding to you in a timely manner. Think about if you operated your business that way, not responding to clients or taking a week to respond. Its bad business practice. Sometimes there may be a legitimate reason for a delay in reports or a family emergency but recurring delays and ambiguities are a sure sign of problems.
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Solution: Ask your bookkeeper to provide a Service Level Agreement (SLA) that specifies what services you pay for and the timing of deliverables. If your bookkeeper is not willing to stand behind their work then that's a pretty good sign they are not the person for you. Having a SLA helps to define the working relationship and remove ambiguities about performance. It also provides you with leverage if things do get bad and you need to end the relationship its always advisable to have some weight behind you in the form of a signed agreement.
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2. THEY DON’T LET YOU SEE THE BOOKS.
Sometimes bookkeepers get so protective of their work that they’re unwilling to give anyone else a view of the books. This is a HUGE sign that they’re hiding something, like mismanagement of your books, or worse—they could be stealing from you. A bad bookkeeper will want to keep you out of the know, and they’ll likely become defensive or overly protective when you ask to see the books. I have seen multiple cases where the incumbent bookkeeper thinks they can hold your books and records hostage in order to buy themselves more time before having to expose their shoddy work. I know it sounds weird but believe me people will do some weird things to try and prolong having to answer for themselves.
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Solutions: 1) Retain ownership of account login credentials. 2) Make sure that you have an agreement that states that all books & records and work product are the property of your company or you as Proprietor. If your bookkeeper puts up a fight or denies you access, terminate your relationship and seek an alternative bookkeeping solution.
3. THEY DON’T ASK QUESTIONS.
A good bookkeeper should be helping you identify problems and opportunity areas, driving forward your overall goals for the business while cutting costs. If your bookkeeper never asks questions, then they probably don’t care about your books or your business. That’s a bad bookkeeper. You need a bookkeeper who’s not afraid to ask questions and dig deep in order to get answers.
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Solutions: Ask them questions, and challenge them to think independently. Request their suggestions on how to cut costs.
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4. THEY FIND EXCUSES OR PASS THE BLAME.
“Well whoever did your books before me didn’t know what they were doing.”
“I thought that was intentional, so I just left it.”
“No one told me to run the P&L statement every month.”
These are all signs that you have a bad bookkeeper because it shows a clear lack of independent thinking, and that might mean they’re not reviewing your books as thoroughly as you need.
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Solution: Don’t accept excuses. Find a bookkeeper who will leave no stone unturned when it comes to your company’s finances.
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5. YOU QUESTION THEIR WORK.
Trust your instincts. If you have a feeling that your bookkeeper is doing it wrong, or you’ve seen the same mistakes over and over again, it’s time to end the relationship and find a new solution. Back to my point number one; If you don’t know what your bookkeeper is up to because you don’t hear from them often enough or they’re guilty of any combination of warning signs on this list, you need to act right away.
Solution: Find a new bookkeeper.
Its your business and at the end of the day the bottom line comes down to your bottom line.
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Save time, save money, and feel good about your business.