3 Essential Qualities of a Good Bookkeeper

The rise of virtual bookkeeping solutions continues to expand the number of options available to small business owners searching for a good bookkeeper beyond just local talent. A Google search for “bookkeepers” yields over 35M results. It’s no wonder that finding a good bookkeeper can seem like a daunting task. 

So, how do you know you’ve found a good one? To sum it up, a good bookkeeper should give you the peace of mind that your books are in order.

A good bookkeeper is someone who can handle the day-to-day transactions of the business.  Having someone who can add new customers and vendors to the system, manage receipts and disbursements, and accurately record these transactions allows for essential access to accurate financial information and frees the owner/management up to run the business.  

Here are three key things to consider when evaluating an existing or hiring a qualified and competent bookkeeper. These are the qualities of a good bookkeeper.

1. Communication Skills

The first of the qualities of a good bookkeeper is communication. A good bookkeeper takes time to understand your business and should be proactive in asking questions and communicating on a regular basis. Bookkeepers generally aren’t forward-thinking in the sense that they predict cash flow or business trends. They should be able to anticipate upcoming cash needs, plan for payroll, and anticipate items that are part of their normal scope of work. 

A good bookkeeper should follow up with the owner or management. It shouldn’t be up to the owner of the company to chase the bookkeeper down for answers. Additionally, a good bookkeeper should be able to explain transactions and tasks in an easy-to-understand way to the business owner. They should not have to demonstrate those in the accounting system.

Too often, accountants can only point to a screen to show what they’re doing in Quickbooks, but have trouble explaining the underlying transaction. This is a weakness that may indicate a less competent bookkeeping resource. You might as well throw in interventions like virtual bookkeeping solutions for good measure. This will ensure that your bookkeeper’s communication skills are supported by other means to get your books in order.

Finally, a good bookkeeper should be able to communicate details on what tasks they’re performing for the business. They should also be able to convey a timeline for when those tasks will be completed. We’re not saying that demanding a checklist is necessary in every situation. However, if a business owner is constantly having to remind someone or ask when XYZ tasks are going to be done, it’s a problem.

2. Efficiency

A good bookkeeper should perform agreed-upon tasks regularly (usually documented in a checklist) that typically include the following: 

• Bank reconciliations
• Review of Balance Sheet and Income Statement
• Credit card reconciliations
• Loan reconciliations
• Review of AR and AP Aging reports

Additionally, he/she should provide updates on when these tasks are completed and ready for review and discussion.

A good bookkeeper should complete tasks timely and accurately. This includes getting things done when they say they will, with minimal guidance and few corrections. If a business owner constantly has to question balances, ask for support, identify discrepancies, or can’t get information on time, it’s a sign the bookkeeper might be weak.

Some things to look for to determine if the books are accurate are:

• Odd or old balances on the Balance Sheet – Are there balances that the bookkeeper can’t explain or haven’t changed in months?
• Duplicate payments to vendors or past due balances – indicates a lack of good processes, organization, or otherwise inaccurate accounting that could be costing the business money.
• Old outstanding checks on the bank reconciliation – A good practice for every business owner is to review and initial the bank reconciliation and the bank statement.

• Customer payments are applied accurately and timely – Similar to inaccurate vendor balances, it’s essential that a bookkeeper be able to accurately illustrate which customers owe what amounts.

Lastly, a good bookkeeper should be able to identify better ways to do things and offer suggestions. If your bookkeeper isn’t coming up with ideas to streamline processes for things like bank/credit card statement activity, vendor payments, and customer receipts, it might be time to look for someone else.

It’s essential for a business owner to have a partner who can help evaluate current processes and procedures. This way, improvements may be able to be implemented.

Efficiency is definitely one of the qualities of a good bookkeeper.

3. Expertise

Another one of the qualities of a good bookkeeper is expertise. It goes without saying that a good bookkeeper should be knowledgeable of various accounting topics related to the business. They should also be able to record entries in line with current accounting guidelines. The bookkeeper should reasonably be able to pull together and provide information to outside groups such as banks, CPAs, and insurance auditors when requested.

Bookkeepers should be able to provide basic financial information. If it’s more advanced, at least, point the business owner in the right direction to get information and answers or assist a more senior person in locating/obtaining that information.

Simply put, a good bookkeeper should be competent in utilizing the accounting software. One of the best ways to test this is ask them to train a staff member on the system. If the bookkeeper doesn’t know the job well enough to teach someone else, it might be a sign that the bookkeeper isn’t as skilled as you might think.

If there’s any pushback on having someone else who knows how to do the basic accounting for the business, always remember that too much power consolidated in the hands of one person is an inherent weakness in the business.

Hopefully, these tips help you to understand what makes a good bookkeeper, an average one, or a downright bad one. 

One of the best tips we give our business owner clients is to simply ask your CPA the following questions:

• How do my books look?
• What do you think of out bookkeeper?
• If our bookkeeper were looking for a job, would you feel comfortable recommending him/her to your clients?

Listen carefully to your CPA’s answer. Any hesitation may tell you that you might not have the superstar you think you have!