Bookkeeping is an essential part of a business. Unfortunately, many business owners tend to overlook it either due to carelessness or over-delegation of financial responsibilities. When the latter is the case, the individual(s) are in total control of the finances. Unfortunately, this can lead to financial fraud.
This is why it is vital to check up on your bookkeeper. There are a lot of honest bookkeepers out there. But you can put measures in place to protect your business!
Having gotten that out of the way, let’s now examine 10 ways you can put a check on your bookkeeper.
Regular Checking of Accounting Application
As a business owner, you must log in to your accounting application regularly. Ensure that you do a review on the financial activities happening in your company. You could do this on a daily or weekly basis, whichever one works best for you.
It is best to do these checks after your bookkeeper has done the necessary updates. It makes it very easy to identify issues, if there are any.
Consider Getting a Certified Public Accountant (CPA)
Hiring a controller is always a good idea when it comes to tracking your records. But a CPA may be ideal for this. As a tax expert, a CPA goes beyond checking your bookkeeper’s work; they also handle your tax matters.
A CPA will review your financial records thoroughly to ensure that everything matches up with your tax returns. Also, they help pinpoint deductions you may have overlooked.
Ensure There Is Good Documentation
Receipts for purchases made by the company must be kept. A bookkeeper may ask for them, but won’t likely keep these documents. Reconciliation and balancing of books most times require these documents.
If they are not available, there could be expenses that are not accounted for. Some apps can fetch receipts automatically. You can use them for this purpose.
Set up Security Protocols
An excellent example of this is countersigning. Ensure that all checks require two signatures. Don’t sign blank checks in advance and leave them under the care of the bookkeeper. It is also essential that you examine every check before you sign them. Don’t sign in a hurry; you could be signing away your company without knowing it!
Monthly Review of the Financial Statements
Your financial statements help you to track your business performance. How is your business faring as compared to the last month or year? What modifications do you need to make? It is challenging to make changes when you don’t have a good knowledge of your company’s numbers.
You’ll most likely be making guesses and thereby hurting your business. The bookkeeper should be able to give you a detailed report of everything on the statement. When everything checks out, you can “close” the books and don’t make any changes after that.
Attach Scanned Images to Each Transaction.
They help to give a clear and transparent representation of every transaction. It eliminates the issue of check tampering. A tampered check may mean that a bookkeeper has diverted funds without the company’s knowledge or approval.
Have Access to Your Bookkeeper’s References
Your bookkeeper has access to your finances and bank accounts. You need to have a way of getting to them in case of trouble. Requesting your bookkeeper’s references during the hiring process shouldn’t be a mere formality.
You need to have reputable people vouching for them before you hire them. Also, make sure you have ready access to these references. It’ll go a long way to keep your bookkeeper in check.
Have Regular Meetings with Your Bookkeeper and Ask for Reports
You should have a regular discussion with your bookkeeper. They should bring you up to speed as it concerns the company’s finances. Also, ensure that what they tell you matches what is on the books.
To this end, ask them to send daily or weekly reports. These reports will serve as a guide when you’re checking the books. If there are discrepancies, ask for an immediate explanation.
Make Sure Their Office and Computer Are Secure
Bookkeepers handle very vital and delicate information, which mostly involves your finances. It is essential that they have a secure office or computer where they do their work.
Your company’s records could fall into the wrong hands by so doing. These could include information about your bids, estimates, as well as profit and loss. You already know the implication of this.
Outsource Your Bookkeeping
There are professional firms that have excellent protocols in place – protocols that can eliminate dishonesty. It’s worth it to outsource your bookkeeping to any of such firms. It saves you the stress of having to check your bookkeeper.
You also have access to all your records 24/7. All you need to do is access your QuickBooks online database and get the information you need.
We hope that you find these 10 tips helpful. Bookkeeping is something you should never take for granted. Keep a close eye on your finances. The success or failure of your business depends on it.
If you want more information on outsourcing your bookkeeping, please contact us today!
