How To Hire A Bookkeeper: A Guide

The abundance of cloud-based software that ultimately propelled the usage of cloud-hosted bookkeeping has made basic accounting and bookkeeping accessible to even the smallest businesses. Online bookkeeping services such as Quickbooks Online allow for many ways to high-tech accounting such as organizing all assets in one place, and also through various consoles such as computer, mobile phone or tablet.

Managing cash flow through different financial tools and well-balanced budget programs is crucial to the success of every business. Recording transactions and keeping an accurate ledger can mean the difference between having a profitable fiscal year or a year of waste and unnecessary tax audits.

The abundance of cloud-based software that ultimately propelled the usage of cloud-hosted bookkeeping has made basic accounting and bookkeeping accessible to even the smallest businesses. Online bookkeeping services such as Quickbooks Online allow for many ways to high-tech accounting such as organizing all assets in one place, and also through various consoles such as computer, mobile phone or tablet. Technology made sure that there are many ways to accurately, safely and efficiently track every item that goes in and out of a business enterprise.

A bookkeeper working

Nevertheless, outsourcing some of these important tasks to a professional bookkeeper helps businesses maintain accuracy and compliance standards. However, hiring or investing on a professional bookkeeper always spend more time innovating the core business model, as well as the whole system itself.

If you’re a starting businessman, or a rising medium-scale proprietor looking for a bookkeeping service for the first time, you have to understand the basics of hiring a third party for your bookkeeping. You have to first understand the definition of the types of bookkeeping services available, the criteria for comparing bookkeepers, and many more about finding the best bookkeeping service vendor.

The Fine Line Between Accounting and Bookkeeping

Before moving on to the specifics of bookkeeping services, it’s important to note the clear distinction between bookkeeping and accounting services. A good number of businessmen has made the rookie mistake of not defining the difference between the two.

Accounting vs. bookkeeping.

Accounting serves in a consultative capacity, using financial data as a baseline. According to TechnologyAdvice.com, accounting typically involves advanced reporting and business analysis, in addition to the rigors of corporate tax management. “Many accountants also provide advisory services for debt and finance, mergers and acquisitions, and trust planning,” they added.

In other words, an accountant uses bookkeeping data to support higher-level accounting requirements such as preparing sales tax, reducing product costs, and setting financial benchmarks.

On the other hand, bookkeeping is similar, yet different. A bookkeeper is responsible for recording the data that accountants use to generate reports and make decisions. In that sense, the two disciplines have a symbiotic relationship. It’s often defined in a way that bookkeeping is designed to generate data about the activities of an organization, whereas accounting designed to turn data into understandable and identifiable information.

The Market Overview of Bookkeeping Services

The standard practice for businesses of every size is to hire an outside accountant. The thing about outsourced bookkeeping is that it tends to be most prevalent among small and medium-sized businesses (SMBs), because SMBs have the same data entry and budgeting needs, but with less employees and/or resources to support it financially.

When it comes to financial reporting, being stretched far too thin can mean costly errors and a budget that never lines up with actuals. This is again one of the beginner mistakes that businessmen make (or simply take for granted), along with not keeping their records up-to-date, and not understanding their tax obligations. Also, failing to reconcile ledgers with bank statements, not recording reimbursable expenses, and running an inaccurate payroll are simple mistakes that SMB proprietors usually commit.

Woman bookkeeper.

Arguably, these sort of mistakes can slow down a business. Then again, it could easily be solved by outsourcing the bookkeeping requirements and putting their accounts in the hands of a trained professional. Business owners can focus more of their attention on bottom-line strategies like customer retention, product development, supply chain optimization, and expanding to new markets, at the cost of a little bit more capital.

Analyzing Bookkeeping Services

You may already have a specific bookkeeper or bookkeeping firm in mind, based on a referral or someone you’ve worked with in the past. Then again, the best way is to invest a little bit more time and effort to make the perfect business match.

The best way to invest it is through a personal interview with the bookkeeper. It’s important to compare and interview a few different candidates before you make the final decision. Here are some criteria to consider when screening your bookkeeping candidates.

Bookkeeper keyboard.

Define the Scope of the Owner-Bookkeeper Relationship

First, define how involved you need or want your bookkeeper to be, and what the relationship will look like.

Many businesses start by hiring a contractor to come in a few hours a week, or even as infrequent as once a month. Some businesses offer a bookkeeping services price list for standard arrangements, too. Also, it is best if you ask for it ahead of time so you can perform a cost and benefit analysis for hiring a bookkeeper.

Ask about their Accounting Software Specialization

Whoever is not keeping up with the race of accounting software or cloud-computing provision is not worthy of being hired at all; the efficiency and flexibility of the technology on bookkeeping should be used as much as possible.

Bookkeepers now have a particular accounting software system they specialize in. Some are even certified with popular vendors like QuickBooks  and Sage. This is very important to consider, especially when you’re already using a particular system to manage finances. Ideally, the bookkeeper you choose will know their way around the software and be able to get started right away.

Proven Track Record

In evaluating a bookkeeping candidate, always move past the resume and look for actual proof of success. Better yet, ask for some of their case studies from previous positions where the bookkeeping firm served a business similar to yours.

Furthermore, you can follow up for references, or ask other colleagues that have worked with the bookkeeper for their opinion. In this case, “success” might be defined as saving the business money through accurate record-keeping, increasing tax compliance, or streamlining financial reporting.

Some Examples of Bookkeeping Services

Although most bookkeepers share the same core competencies, they don’t all have the same experience or offer the same services. Here’s a breakdown of the four most common bookkepper categories:

Certified Bookkeeper: Aside from getting NACPB and AIPB certifications, bookkeepers may also get certifications for particular accounting software, certified to manage payroll, or certified in tax management. Generally, the more certifications a bookkeeper has, the more services and discretion they’ll be able to provide.

General Bookkeeper: A general bookkeeper offers basic services like data entry and account reconciliation. Think of it as a general physician in the field of medicine. As such, general bookkeepers tend to have lower rates and work lesser hours. They are usually uncertified, which meant that they have less on-the-job experience. A general bookkeeper can be a good choice if you have a limited personnel budget and do your own financial reporting and payroll.

Full-Charge Bookkeeper: A full-charge bookkeeper title denotes more advanced financial management and a closer relationship with company executives than that of a general bookkeeper. Full-charge bookkeepers usually manage payroll, fixed assets, invoices, and other financial statements, and some may even serve an accounting/advisory role. They could be certified bookkeepers, but usually full-charge bookkeepers have a one-size-fits-all approach to tend to most bookkeeping needs.

Virtual Bookkeeper: Virtual bookkeepers are the most uncommon of the four types. Virtual bookkeeping services are an attractive solution for smaller businesses and startups looking to outsource their financial records, but not ready to work with (or pay for) a dedicated contractor. Bookkeeping virtual assistants accept financial documents electronically, update your ledgers, accounts, payroll, etc., and send back copies of reports for your records. Since they are not as stable as the others, the risks you have when hiring these are indirectly proportional to the price you are paying them: Higher risk with lower salary and vice versa. Virtual services are convenient and cost-effective, but they can add to the challenge of maintaining a clear audit trail.

3 Habits of Money-Smart People

Money management is the ultimate tool in ensuring a particular business to withstand the test of time. In this regard, an individual who wants to effectively handle a business well should be mindful of the money coming in and going out of the business. Similarly, businesses should take into consideration a proper accounting method to promote efficiency and high level security. MYOB Accounting Software and other online accountancy tool can be the first stone that leads to leaps and bounds for the company.

In these economically harsh times, people are now required to become more aware of how they spend money. For those who are just starting their career, such as new college grads, it is especially significant that they take steps that can help them endure their independent, brand new life that they will have to face.

Counting money

Everyone has to go through the phase of having to be independent. However, independence does not only encompass living alone without the parents. Independence also means having to know the fundamental skills required in enduring daily life such as cooking, cleaning, and other chores at home. Similarly and most importantly, independence requires a person to be financially-stable and able to live within his or her means.

This begs the question – How can someone become financially stable?

The road to being financially successful is a tediously long one. Who better to emulate than those who have survived that stage in life. The ones who have flourished amidst the hard times?

So what does it take to take the first step towards financial freedom? Here are three of most important habits of a financially-stable individual that could help anyone financially win in life:

They Spend Wisely

An important facet for a person in becoming financially stable is having the awareness of how money works for them. Being ‘money-smart’ is a prerequisite for those who want to become truly financially free.

But how does one become money-smart?

locked wallet

It all begins with a mind-set of proper allocation. It is pertinent to practice buying only what is needed, as well as spending on things that are only necessary. Nowadays, it is so easy to give in to the “finer things in life.”

Luxuries like the latest gadgets, the finest clothing, and the coolest shoes can actually make a person dead-beat with regard to finances. Similarly, availing luxury services such as a thousand dollar spa or a ten-dollar coffee can haunt a person financially in the end. This is why a person should start to set his or her mind to only spend on things that are truly important.

This is not to say that luxuries in life are bad. The point is that for a person aiming to be financially independent, one has to inculcate a sense of awareness as to how their money is spent.

On another note, financially-stable people are aware of the fact that a person should not spend the money that he or she doesn’t have. Basically, it means that a person should not opt to be extremely indebted to a third party like a bank or a financier.

Credit cards are thought to provide a huge plus in one’s financial self-worth. This is actually a misguided notion because credit cards promote spending, and relentless spending opens more doors to financial roadblocks. Successful people always make it a point to eliminate any debt that may accrue interest. In turn, these accumulated interests can cause huge headaches financially in the long run.

They Save Wisely

The result of spending wisely is having a surplus of money – this is where saving wisely comes in. As any financial coach or expert would declare, saving money is an integral aspect in having a good financial life in the future. Nonetheless, there are some more exciting ways money can be saved, and can even provide profits at the same time.

Banking is the most commonly opted approach in saving money. Over time, money saved in a bank account can accumulate interest. The amount of interest can be noteworthy for people who put a lot of money in their account. However, for people who are at the beginning of their careers, it is difficult to reach that point where the interest gained is of significant value.

It is rare for banks to give out interest greater than 5% on a certain savings account. Naturally for smaller accounts, lower interest is accrued. In this light, an alternative method is opted by those who save wisely; they create more when they use their money for trading in the stock market.

Mutual fund.

Various firms and companies cater to those who want to earn more money. Money managers use the amassed amount in this way through two distinct means. They can use the money as principal to participate in stocks exchange. On the other hand, mutual funds promise an interest at the end of the year that is much higher than that of the banks. Either way, both are better alternatives to save up and get more from their money.

There is also the option to play in the stock market personally. He or she can buy or sell his own stocks online, giving him an idea of the current money he has. Ultimately, the money gained through this vehicle saved can be used for further ventures such reinvestment or setting up an entirely new business.

They Set-Up Their Own Business

Being able to get a salary after a month’s hard work proves to be quite an experience. However, being able to earn passively takes earning to a whole new level.

Rich guys are not necessarily geniuses or experts in the services their companies offer. They are just really good entrepreneurs, and most of them started as a dissatisfied and restless employee who wanted more for themselves. With the surreal amount of work and the time it takes to finish a certain job, not to mention the relatively lower salary, it is hard to get home and put in the extra effort to make a bigger change.

Open your own business.

In more ways than one, people should consider setting up their own businesses to reach the financial freedom everyone clamors for. Though, this isn’t naturally for everyone.

Having a business takes time and effort, too. Entrepreneurship provides control over an individual’s time for professional activities. He or she is his or her own boss, and this alone creates a huge disparity as compared to being an employee.

A person who has his own business can take himself to brand new landscapes, given that he or she is willing to take the risk in business. In this way, what can actually help is integrating a sense of of becoming money-smart in the business.

Money management is the ultimate tool in ensuring a particular business to withstand the test of time. In this regard, an individual who wants to effectively handle a business well should be mindful of the money coming in and going out of the business. Similarly, businesses should take into consideration a proper accounting method to promote efficiency and high level security. MYOB Accounting Software and other online accountancy tools can be the first stone that leads to leaps and bounds for the company.

The world has evolved into an unforgiving place to people who are not financially-stable. This is why it is essential for young professionals to open themselves to success habits of those who have flourished financially. There are obvious schemes which these successful people made in order to go where they are now. Besides, if a person wants to be the best, there is no mistake in imitating the best.

Money problems

 

All in all, people should always look forward to being financially independent, while taking small important steps towards a life of true financial freedom.

Being money-smart is a fundamental step towards a great life.

Forensic Accounting: The Action-packed Side of Accounting

Also, in the advent of technology, many types of accounting fraud have come from the rising cloud-based computing Although a great number of online accounting service providers such as Xero Software and Quickbooks Online are already on high alert in terms of digital security, delinquents can still think of ways on how to commit financial crimes.

For some farfetched reason, accounting has been deemed as an uninspiring profession. There is a big chance that those who see this career as a dreary job imagine bookkeeping as mainly crunching the numbers and making sure that column A should match column B at the end of the day. Of course, this is not true at all.

Financial report.

Nonetheless, there is a colorful part of accounting that is very interesting as it mixes all the aspects of accounting with Criminal Law, Technology and a lot of Psychology. You may not have heard it before, but there exists an enthralling and grueling part of accounting called Forensic Accounting.

What is Forensic Accounting?

The integration of the academics of accounting, auditing, and investigative skills yields the specialty known as Forensic Accounting.

It provides the stakeholders (businessman; accountant; lawyer) an accounting analysis that is suitable to the court which will form the basis for discussion, debate, and ultimately a dispute resolution. Forensic Accounting encompasses both Litigation Support and Investigative Accounting.

Forensic accounting

If you are new to the term, you might picture private investigators in a crime scene holding calculators instead of cameras or magnifying lenses. Perhaps you might imagine a bookkeeper wearing gloves while studying a ledger. Well, that’s all but the figurative idea behind Forensic Accounting. While it’s not about studying a crime scene or a corpse in detective clothes and all that jazz, it’s all about interpreting and supplying the proper data to study a criminal case in finance and accounting.

The term “forensic” means “relating to courts of justice or public disputes” or “suitable for use in a court of law”. Forensic accounting involves the use of accounting expertise in court and litigation cases, fraud investigation, claims and dispute resolution, and other areas that involve legal matters. Unlike the popularly dramatic forensic setting that focuses on extraction of DNA and bullet trajectory calculation, forensic accounting deals with financial and corporate crimes such as fraud.

What Do Forensic Accountants Actually Do?

The recent cases of fraud and finance-related crimes, a need for the deterrence and detection of these fraud cases has become widespread and highly intensified. This is the reason forensic accounting continues to gain a rapidly increasing popularity in the world of business and finance.

Also, in the advent of technology, many types of accounting fraud have come from the rising cloud-based computing. Although a great number of online accounting service providers such as Xero Software and Quickbooks Online are already on high alert in terms of digital security, delinquents can still think of ways on how to commit financial crimes.

Basically, forensic accountants have two major types of responsibilities: Investigation and Litigation Support.

accounting graph

Investigation involves the examination of potential and actual evidences that could suggest the existence of fraudulent activities and the pertinent information associated with them. This includes witness statements, documents and data (bookkeeping ledgers, receipts, etc.), “real” evidence (such as sample construction materials from a road site), and demonstrative evidence such as photos, charts and graphs.

On the other hand, the Litigation Support part of Forensic Accounting urges forensic accountants to provide legal assistance – the type inclined to the calculation or estimation of economic damages and related issues – in a given case. Forensic accountants can also act as expert witnesses in courtrooms where they can provide valuable points that should be useful in deciding over cases regarding financial fraud.

A Forensic accountant is often hired to analyze, interpret, summarize and present complex financial and business related issues. With their expertise, they can translate raw data to a language that other people can comprehend; all to make it in a manner which is both understandable to a courtroom (for example) and properly supported that a jury can evaluate.

According to ForensicAccounting.com, A Forensic Accountant is often involved in the following:

  • Investigating and analyzing financial evidences
  • Developing computerized applications to assist in the analysis and presentation of financial evidence;
  • Communicating their findings in the form of reports, exhibits and collections of documents; and
  • Assisting in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.

In order to properly perform all of these services, a Forensic Accountant should be familiar with legal concepts and procedures. This means that Forensic Accountants should have a specialization in certain concepts of political science. In addition, a Forensic Accountant must be able to identify the concept of “substance over form” – which is a common technique in financial legal management – when dealing with an issue or  case.

Mockup.

Forensic accountants are also highly skilled in the ins and outs of most fraud schemes. They are usually hired to lead investigative works and provide recommendations to mitigate the likelihood of fraud activities from occurring. Forensic accountants can also work with incidents of negligence, bankruptcy, contracts, and other cases that involve recovery of damages.

How Does Someone Become a Forensic Accountant?

Because of the increasing popularity of this field, many schools now offer degrees and training programs related to forensic accounting. The first thing that you should do, if you wish to become a forensic accountant, is to finish a bachelor’s degree in Accounting. Forensic accounting courses are usually offered as a Master’s degree.

Then, you have to look for Forensic Accounting Certification programs. Accounting certifications in this field can help you establish your value and recognition in the society. Holding a certification proves that you are qualified to perform services in such field. This will help you get hired by firms and kickstart your career as a forensic accountant.

To add flavor to Forensic Accountants, these certifications available for recognition almost globally (although the certification itself is not available in all parts of the world):

Certified in Financial Forensics (CFF). This certification is granted by the American Institute of Certified Public Accountants (AICPA) to Certified Public Accountants (CPAs) who have developed expertise in the forensic accounting field. This is an additional accreditation you may wish to consider in addition to having a CPA license.

Certified Forensic Accountant (Cr.FA). The American College of Forensic Examiners

International (ACFEI) grants the Cr.FA credential also to CPAs who meet their certification requirements.

Certified Fraud Examiner (CFE). The CFE is a globally recognized professional designation for individuals who specialize in fraud prevention, detection and deterrence. It is offered by the Association of Fraud Examiners (ACFE). CFEs exhibit proficiency and professional excellence in performing services to uncover fraud and implement internal controls and systems to prevent them from occurring.

Can People Make a Good Living out of Forensic Accounting?

Yes. Forensic accounting is one of the fastest growing careers today, and may probably be the fastest in the accountancy profession.

More often than not, forensic accountants are hired by public and private employers who have a big business and are in dire need of their valued services. For instance, government agencies hire FAs to assist them in solving financial irregularities within their government accounting system. Sometimes, even the research and academe sector also demand for the FA’s expertise in the investigative field of accounting.

accountant

Having even just a background in the forensic accounting department makes accountants have a wider pool in the accounting horizon in general. It adds a lot of value in the qualification of an accountant that is useful especially to those who are in the management level positions and advisory departments.

According to AccountingVerse.com, the average salary of forensic accountants in the US is around $75,000 with many earning more than $100,000 annually. “Six-digit annual salary is not uncommon in this type of specialization. The starting salary of forensic accountants ranges from $30,000 to $60,000 per annum,” they added.