Fear of Finance

I’ve been following a lot of business coaches lately, trying (like most business owners) to come up with ways to grow my business. What’s been particularly interesting to me as a bookkeeper is that these coaches all advise business owners to outsource certain tasks, particularly administrative tasks and bookkeeping. In spite of this advice, many business owners are reluctant to find help in this area, and I’m trying to figure out why this is.

Some of the reasons I have been given by new clients who are finally looking for help are:

• They tried it and had a bad experience—the person they hired never did the work, or their work was substandard or impossible to understand
• They fear the cost is going to be prohibitive
• They don’t see the value.
• They have no idea how to find a bookkeeper.
• If they do find a bookkeeper, they have no idea how to describe what they want—or they really don’t even know what they want.
• They think they are doing a great job on their own, even though their CPA (or worse yet, the IRS) has indicated otherwise.
• They don’t really want to know what their finances look like.

The fact is—bookkeepers are like everyone else. Some are good, some are bad. There is no licensing requirement, so anybody can call themselves a bookkeeper.  So a little due diligence is in order when finding a bookkeeper. 

You need to find somebody who is both competent and able to work with you comfortably. As a business owner, you have certain  areas of competency that don’t necessarily extend to the finances. You should be able to find a bookkeeper who can perform that function and relate the information to you in a timely, competent and understandable manner.

Some ways to find a reliable bookkeeper include:

• Check with your CPA. They may be able to recommend someone.
• Check with other local business owners. They may be working with somebody they are happy with.
• Check for services that are certified by the leading bookkeeping software companies, like QuickBooks, Peachtree, Accountedge and Xero, or professional organizations such as the Institute of American Institute of Professional Bookkeepers. These companies maintain databases of bookkeepers who have completed competency programs.
• Find out if the service you are interested in has Errors and Omissions Insurance (E&O Insurance).  This is not a requirement, but if the service has this, it at least means that a) they have taken the time and trouble to obtain professional liability insurance and b) their insurance company is willing to insure them against claims against their competency.

Once you have found someone to work with, be upfront with them. Describe your business and tell them why you have approached them.  Chances are, even if you don’t know exactly what you need, they have enough experience working with small business owners to suggest a plan of action. Set up a written agreement with them (usually a Letter of Engagement) that spells out exactly what they will do for you, when they will do it, and the fee agreement. They will need enough access to your financial information to do their job but you should never grant the ability to spend your money (except to pay payroll taxes and sales taxes using the taxing agencies’ electronic payment service).

Turning your bookkeeping over to a professional can not only free up valuable time for you, but you will get better information to help you manage your business, and you will probably save money in tax preparation fees.

I’d love to hear your feedback about what holds you back in seeking help in this field!