Hiring the Right Bookkeeper

Why It's Damn Hard, and How to Do It

Anjali Oberoi and Mariam Furmanau | Bookkeepers are a bit like babysitters. No really, hear us out. As frequent travelers and parents to infants, we have cumulatively hired over a dozen babysitters in almost as many countries over the past two years, and we have noticed two universal constants. Firstly, taking good care of infants is hard. It demands experience, but more importantly rare skills, including creativity and imponderable patience (a big shout out to all career-babysitters!). Secondly, there is no shortage of people who want to take care of babies.

The reason for the latter is simple: There are no formal prerequisites to becoming a babysitter. No academic training is needed (although some certifications could help), and something as common as having taken care of a younger cousin is generally viewed as relevant experience. Put in economic lingo, there are few “barriers to entry” into the babysitting profession. So few in fact that babysitter ranks as the top first pre-career job in America.

Bookkeeping may be a more corporate profession, but it is also one with few barriers to entry and plenty of members. While you will rarely find a finance advisor without a college degree and a CFA or an accountant without a CPA, a bookkeeper needs neither of these things. The core principles of bookkeeping are generally self-taught and honed on the job. In fact, many people start in the profession fortuitously because someone had to do the bookkeeping at a company where they worked.

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At the same time, being good at bookkeeping is tough. It demands laserlike attention to detail, diligence, speed, tech savvy, and exceptional investigative abilities. Much of a bookkeeper’s time is spent painstakingly collecting data from colleagues whose concern for matters of accounting is often secondary. How many people do you know who have the skills and stamina for the job? Truly, before going any further, we owe a second shout out, this time to the talented bookkeepers of the world. Also, if you recognize yourself as one them and would be interested in working with Bernoulli Finance’s clients, we would love to hear from you!

In the process of advising our clients on their strategies, we at Bernoulli Finance generally begin with a diagnostic of their financial systems. More often than not, we find that their bookkeeping has been neglected or not properly done. When this happens, we help clients recruit a bookkeeper, which - you must have guessed by now - is damn hard. However, along the way, we have collected wisdom on how to approach this challenge, and decided to share it in this piece. Thus, without further ado, here’s Bernoulli Finance's advice for finding the right bookkeeper:

1. Go into recruitment with a clear plan and description of the bookkeeper’s role. Before you hire a bookkeeper it is important to have at least a blueprint of the financial infrastructure you have or wish to set up. This means selecting the systems that you will use and defining how your team will interact with those systems. Will you use Xero, Quickbooks, or another accounting software? Will you sell through an e-commerce platform? Will you operate an inventory tool? Will your staff use an app to record expenses? And most importantly, how will these systems talk to each other? Go into recruitment once you have a specific list of your bookkeeper’s responsibilities. This is not only for the sake of accurate budgeting and effective onboarding. You should also use this list to assess job applicants. Ask about their proficiency with the software systems you will use. Ask if they have experience integrating those systems with each other and how they went about it. Finally, ask applicants about their availability and see how it checks against the process cycles you have put in place. Remember - a good bookkeeper is not necessarily the right bookkeeper for you.

2. Look for a penchant for orderliness. There is no set personality type for great bookkeepers. But if they have one common trait, it is that they love order. Like, really love it. They may not keep their own life tidy but they thrive on organization at work. How do you test for this with job applicants? Ask them about something they have organized in a past job. As they delve into the details, get a sense of the level of creativity and complexity of their accomplishment. Look also for clues that they are enjoying telling the story, as this is likely a good indicator of how much they enjoyed the task and more generally, how much they enjoy organizing stuff.

3. Ask open-ended questions. What you want to avoid is textbook questions that lead to textbook answers that tell you nothing really about applicants, apart from the fact that they have experience with interviews. Ask open-ended questions instead and expect thoughtful, in-depth answers. Something that comes with a story or an anecdote perhaps. This will tell you much more about an applicant’s understanding of the topics relevant to the job. Here are some open-ended questions that we have found very effective:

  • What would you say are top 3 challenges that a bookkeeper faces?

  • What does full-cycle bookkeeping mean to you? Describe one cycle you encountered in your career that you found most challenging and why.

  • How do you self-organize? Any tricks you would share? (Note - This question is particularly important if you are recruiting a remote bookkeeper.

  • If you had to distill your entire professional experience into one short description of your profile, what would it be?

  • What is the last thing, anything really, not just at work, that you had to master and how did you go about it?

4. Don’t discard remote bookkeepers! You might be tempted to limit your bookkeeper position to applicants who can work on-site at your company, especially if you have just launched a major reorganization of your financial systems. From our experience, there are in fact very few instances when having a bookkeeper on-site is truly necessary. Go back to the details of your financial processes, and ask yourself if any of the bookkeeper’s responsibilities require in-person interactions. Nowadays, you will find plenty of online bookkeepers who have nailed down ways to communicate with their clients just as efficiently, sometimes even more so, than on-site help. And, because they operate remotely, their fees are often lower. Remember, finding a good bookkeeper is damn hard. From a pure statistical perspective, it is counter-productive to limit your pool of applicants through requirements that have no reason to be.

5. Hire a bookkeeping company? Meh. Look at that! They have a website, a pretty logo, and a even a fax number. With that kind of stuff, they’ll definitely do a better job than a freelance bookkeeper, right? Not quite. If you are a small to medium company, you probably do not need more than one person to work your books. In fact, what you need is probably exactly one person. For bookkeeping companies to operate efficiently and maximize profit, they tend to set up rigid structures and standardize their processes. As a result, they are (generally) less capable of adapting to the processes and little tricks specific to your company than a freelancer. Besides, hiring a company might add overhead costs and an undesirable layer in the communication between your bookkeeper and you.

6. Don’t skimp on compensation. Good bookkeepers are not cheap but they save you money - and if you’re lucky, make you some - in the short and long-run. It is not uncommon that a bookkeeper will more than compensate for her own salary in the first year, for example, by identifying instances of payment mistiming, following up on late accounts receivable, catching duplicate transactions, or continuing payments for unused systems/softwares - so many things that you probably have little time for.

* Illustration by Dannae Alvarez