The Bookkeeper and Company Relationship
There are many reasons a company would hire a bookkeeper. One is the matter of time, there are only so many things an owner can do with the time they have. If there is someone else capable of getting a certain task done, the owner should pass it along to them and focus their time on growing the business, not the day-to-day operations.
Another reason a company might hire a bookkeeper is their own personal skill level. They may know about their company, their customers, and the product or service they’re providing, but they could potentially know nothing about day-to-day accounting. Things like cost control, cash flow management, balance sheet, payroll, and payroll tax reporting should be left to someone who is knowledgeable about it all.
Who’s Really In Charge of the Finances?
The owner, or possibly a CFO, is always in charge, regardless of if they have a bookkeeper to handle the day-to-day and ongoing accounting activities. When starting out, a business owner might handle the bookkeeping, and then as the business grow, it might get passed on to someone else in the company like an office manager. At some point in the growth of the company, bookkeeping will take more time to get done and done well. This it when a business owner will need to hire a bookkeeper, either in-house or outsourced. While they might take over the business finances, as the owner, you will still need to understand what’s going on.
Whether you are using a virtual bookkeeper like All About Businesses, or have someone in-house, you still have to stay in touch with your financials. You set the guidelines and timelines on how and when things are to be done. For example, the ideal situation for reconciliations (balancing your monthly expenses and income) are for them to be completed one week after the first of the month. If the expectations are set as such, this can be easily accomplished. As the person in charge, you set and agree upon reasonable expectations. When do invoices get paid? Who moves money if needed from accounts for paying these invoices? Paying invoices daily or as they come up in not productive. Doing this once a week or twice a month improves efficiency and organization.
To Help Set Expectations, Consider the Following:
- What needs to be done
- The timelines of each task they have
- When they need to have reconciliations done
- When to have a completed P&L statement available for review
- A scheduled date and time for you to review with them and answer any questions
- Warning signs they should look out for and notify you when they occur
- Cash Flow is running low (set a minimum in the accounts in which you should be notified if it goes below this amount)
- The Payables account is more than $XX.XX past a certain amount
- Any accounts more than 30 days late and who handles the communication between the company and the customer
- Expenses to be approved above a certain amount, to include who is allowed to make purchases and what are they allowed to purchase under their role
When you have clear expectations, you are set up for a greater chance of financial success. The owner is responsible for setting the goals of the company, and this includes the financial goals. Knowing as much as you can about the business and setting expectations with your team is one of the key roles an owner must handle. The old expression “trust, but verify” may have come to light in the early 1980’s and tied to politics, but certainly holds true to running a company. As the owner, the buck stops here, and you are 100% in charge when it comes to the financial health of the company. We should all be able to depend on great people on our team, just like we should feel comfortable having clear expectations to set a healthy financial future.
We can provide clear expectations on what we do when working with our clients, and as your company grows, we can help take on more responsibilities. We can learn more about each other and how we may be able to help you with your accounting needs, today and in the future.