Hiring a Bookkeeper: What Every Business Owner Should Know

Helping business owners gain financial clarity, improve cash flow, and increase profitability.

What’s Covered on This Page

• What a Bookkeeper Does for Your Business
• What Qualifications Should I Look for in a Bookkeeper?
• Questions to Ask Before You Hire a Bookkeeper
• How is hiring a bookkeeper in Teaneck different from hiring one anywhere else?
• What is the difference between a bookkeeper and an accountant?
• What is job costing, and why does it matter for contractors in Teaneck?
• How do I know if a bookkeeper truly understands my industry?
• Is a QuickBooks ProAdvisor certification a sign of a good bookkeeper?
• What is a common mistake Teaneck business owners make when hiring a bookkeeper?

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What a Bookkeeper Does for Your Business

Many business owners think a bookkeeper simply "does the books." Think of a pilot just sitting in a chair, that is not a bookkeeper's job. There's a lot going on under the surface, but to know what to look for in a bookkeeper, you have to understand the bigger picture.

A bookkeeper ensures your financial records are accurate and current. It's not just about logging in every transaction, it's also about categorizing and reconciling those transactions. A bookkeeper reconciles all your bank and credit card transactions and all other accounts with your accounting software. Your books should be clean, with zero uncategorized transactions hiding away.

What Does a Bookkeeper Do?

Here's what a bookkeeper should handle day in and day out:

• Categorize all sales and expenses in real time
• Perform monthly bank and credit card reconciliations
• Keep accounts payable/receivable up to date
• Create timely profit and loss reports
• sales tax liability is tracked and filed

This list may look, but each item involves real work. A miscategorized or uncategorized transaction might result in an incorrect tax return or miss an important cash flow problem that would have shown up in a financial report.

I see this with home service contractors all the time in Teaneck and across Bergen County. A business owner will come to us with a bag or box full of receipts and a QuickBooks software subscription, but no one has logged anything into their QuickBooks software in months. They're too busy trying to keep up with all the home service jobs in the area, and so books are the lowest priority for them. When business slows down, they look at their QuickBooks, and their bookkeeper isn't telling them whether they are profitable or not.

Why Bookkeeping is More Than Keeping Your Books

A bookkeeper can do much more than simply "do the books" and give you clean financials. With clean bookkeeping, you can get answers to key questions. Am I profitable on this type of job? Do I have enough profit to hire another service person? Can I afford to buy a new van or other asset? You have to have clean books to know these things.

This is where job costing is so important. Job costing for contractors is everything, because a QuickBooks contractor bookkeeper needs to know how to set up a client's books so that all transactions are tied to a specific job. Material, labor, and subcontractor expenses. This is where it matters. If a bookkeeper doesn't know how to do job costing, your books may be clean, but not telling you what you really need to know to run your business. And that is where the problem with bookkeepers comes in. I have over 20 years in corporate accounting and small business ownership. Business owners were saddled with bookkeepers who could book the transaction, but who couldn't explain what it means to you your business performance.

A bookkeeper is there to make sure you are tax-ready. Clean books mean that a CPA has less time fixing things and more time finding deductions. Your monthly bookkeeping services should lead to seamless tax prep, not create problems for your next tax filing.

So when you are thinking about hiring a bookkeeper, instead of asking "can you enter my receipts" ask do you know my industry? Can you set up job costing? Can you help me make sense of the financial reports?

This difference between a bookkeeper who records numbers and one that knows how to help you to understand your business is significant. It is like the difference between driving a car with a dashboard, and not having one at all.

What Qualifications Should I Look for in a Bookkeeper?

Not all bookkeepers are right for all situations. The one that works great for a retail store owner would be completely lost when setting up job costing for plumbing contractors. So what do you look for? Check out our blog insights for more bookkeeping advice. blog insights for more bookkeeping advice.

Go back to the basics:

A good bookkeeper should understand the principles of accounting. They do not need to be a CPA, they do need to understand debits, credits and cash flow. Most bookkeepers (according to the Bureau of Labor Statistics) have at least an associate degree or equivalent work experience in accounting, this is a reasonable starting point.

Skills That Matter in Your Business Day to Day

Now that we are starting with the base of education, what skills and knowledge should they know that will be beneficial for you in the immediate future? Here is what to look for:

• Software knowledge: They should be comfortable working in Quickbooks Online or any accounting platform that you are using. Time wasted menus is your time.
• Industry experience: It is a huge benefit to hire someone who is already experienced with construction bookkeeping, or job costing bookkeeping, over someone who hasn't worked in your industry.
• Detail oriented: A single misplaced number on a sales tax report could create some big problems for you. Make sure you are hiring someone who will make sure you catch those problems before they become an issue.
• Communication skills: Can they explain the numbers to you in plain English? Otherwise, how can you feel comfortable that you are understanding your own finances?

This is a mistake that we see happen far too often. Business owners will hire someone who "understands bookkeeping" but has no knowledge of their industry. A few months later, books are in disarray, job costing data is wrong, and everyone is left wondering which projects were actually profitable.

Certifications Worth Looking For

Certifications do not mean everything, but it does show that someone is willing to invest their time learning the platform inside out. If they are certified to be Quickbooks ProAdvisor, they have spent time and effort learning the ins and outs of this platform.

This is when you want your QuickBooks setup and configuration done right the first time. Other credentials you should consider are a Certified Bookkeeper credential from the American Institute of Bookkeepers. This credential tells you that they have passed written exams on payroll, adjustments, and error correction. This is not required, but it is a good signal. Another consideration that most people never think to ask is how the bookkeeper handles deadlines. Tax due dates, 1099 preparation dates, and sales tax reporting are all dates you cannot afford to miss. A bookkeeper that cannot stay on top of deadlines is costing you money in penalties.

Is there an industry fit?

Let's say you are a landscaper in Teaneck. You call a bookkeeper and she is happy to work with you. The issue is, she has never worked with anyone but e-commerce companies. She knows nothing of seasonal fluctuation, has never had to track the profitability of individual jobs, and never had to enter equipment depreciation schedules for 25 zero-turn mowers. After a few weeks, you find out that your bookkeeper is weeks behind in generating reports.

It is all about industry fit.

Let's take a more specific example. When you have a home services business, you want a bookkeeper that can immediately tell that you are a home services business. It means she knows that you probably bill in stages, that you need help to track the cost of materials and labor. It also means she should know how to set up your chart of accounts so you can easily track profit by job.

After twenty years doing corporate accounting plus owning and operating my own small businesses, I can tell you from first-hand experience that the best bookkeepers don't just track your money, they help show you exactly how much your money is doing and where it is going in your business.

But credentials only take you so far. You also have to know the questions that need to be asked before you make a decision. If you want help finding your own way through what your business requires, then check out our bookkeeping insights here on our blog to.

Questions to Ask Before You Hire a Bookkeeper

Most people don't ask the right questions first. They find someone who "sounds decent" and just hand them a username and password. It happens to business owners around Teaneck all the time, it happens to business owners around all of Bergen County, and we deal with it every day.

Asking the right questions up front will save you months of headaches in the future.

Before you make a final decision on who you hire, ask all of these questions to each bookkeeper you are considering. Write down the answers. Then, put those answers side by side, and make your decision.

Ask About Their Experience First

You want to get a feel for whether the bookkeeper has worked with businesses similar to yours. A bookkeeper that is great at working with retail businesses will struggle when working on job costing with a plumber or an HVAC company, since the work is simply different for each.

Ask the following first:

• Have you ever worked with home services businesses?
• How many clients are you currently working with on a monthly basis?
• What experience do you have with QuickBooks Online bookkeeping?
• Are you proficient in filing NJ state sales tax?

You'll get some real insights from their answers. If they stumble or seem unsure, that's a warning sign. A good bookkeeper knows their limitations and is clear about them.

Ask about the How

This is and people don't always think of it. You want to understand the actual process of how your bookkeeping will be handled, not just know that it will get done.

1. When are your books updated? Monthly? Weekly? A schedule is important so you know what's going on.
2. How do you communicate with clients? Email? Phone? Zoom once a month? All three?
3. What reports will I see and how frequently? At a minimum, you should receive Profit & Loss statements, Balance Sheets and Cash Flow statements.
4. What happens if you find errors in my current books? Will you help me do a bookkeeping clean up, or do you just refer people?
5. Who will be working on my account? Some companies make a sale with an experienced sales person, and then pass it along to a new employee to do the work.

I've been in small businesses before myself. The bookkeepers that were crystal clear about their process up front were the ones that always delivered. No surprises, no missing deadlines.

Ask about Industry Knowledge

This is where you find out what they can do. Are they able to set up job cost tracking by project? Do they understand that the cash flow of a home services business like a landscaping company looks very different in January than in July? These things don't come out of books, they come from experience.

A bookkeeper that knows construction bookkeeping or job costing bookkeeping, is going to ask you some good questions right back. They want to know who's working your crew, what's your cost for materials, how do you pay subcontractors, etc. That's a good sign.

If they look at you funny when you mention that you want to track your job profitability though, keep looking.

The Most Frequently Forgotten Question: "What do you need from me?"

This one question is going to tell you a lot about how they run themselves. If they're organized and, they'll be able to give you a short, to-do list of exactly what they need and when. Bank statements, receipts, invoices, and so on. If they can't answer this question for you, chances are they don't really know how they need the information from you, or haven't thought it through yet.

We've always told people that we're interested in working with that exact process upfront before we on any month of bookkeeping with them, so everyone's clear on the right expectations for both sides.

If you'd like to see exactly what an organized bookkeeping process looks like for a bookkeeper, you can go here to see our services for our bookkeeping services where we give a breakdown of how we work for home services businesses.

The bottom line is: Ask questions before committing. If you've found the right bookkeeper, they won't be bothered by these questions and will likely appreciate that you're asking.

Frequently Asked Questions

Common questions about what to look for when hiring a bookkeeper: a business owner’s guide services in Teaneck

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