How do I know if my bookkeeper is doing a good job?
Most business owners can’t evaluate bookkeeping quality because they don’t know what to look for. You’re not expected to understand debits and credits. But there are practical signs that tell you whether your books are being handled well.
Start with bank reconciliations. Every bank account and credit card should reconcile to the penny each month. Ask your bookkeeper to show you the reconciliation report. If the ending balance matches your bank statement exactly, that’s the baseline of competent bookkeeping. If accounts haven’t been reconciled in months or there are unexplained differences, something is wrong.
Look at your accounts receivable and accounts payable reports. Does the AR aging show customers who actually owe you money, or does it include invoices that were paid months ago? Does AP reflect bills you actually need to pay? Stale or inaccurate data in these reports means the bookkeeper isn’t staying on top of things.
Financial statements should arrive on time and make sense. If you’re getting a profit and loss statement that shows numbers you can’t connect to reality, the categories might be wrong or transactions are being miscoded. You should recognize the expenses listed. A category called “Ask My Accountant” filled with hundreds of dollars is a sign the bookkeeper didn’t know where to put things and gave up.
Tax time reveals bookkeeping quality more than anything else. If your accountant or tax preparer comes back with a list of questions, missing information, or errors they found, your books weren’t as clean as they should have been. Monthly bookkeeping done properly means your tax preparer can work from the reports without a cleanup project first.
Pay attention to how your bookkeeper handles questions. Good bookkeepers explain things clearly and welcome questions. If you ask why an expense seems high or what a particular account represents, you should get a real answer. Defensive responses, vague explanations, or an inability to walk you through the numbers are warning signs.
Consider whether you can actually use the information. The point of bookkeeping isn’t just compliance. It’s giving you visibility into your business. Can you tell whether you’re profitable? Do you know how much you spent on materials last month versus the month before? If the books exist but don’t help you make decisions, something is missing.
Red flags to watch for include consistently late reports, the same errors appearing repeatedly, accounts that don’t reconcile, and reluctance to answer questions. Also watch for journal entries you don’t understand. These aren’t always bad, but a pattern of large adjusting entries can indicate someone is covering up errors rather than fixing the underlying issues.
A quality check you can run yourself is comparing your bank statement deposits to your recorded revenue. They should be close, with any differences explainable by timing or payment types. If they don’t match and your bookkeeper can’t tell you why, that’s a problem worth investigating.
Working with small business bookkeepers in New Mexico who build quality assurance into their process helps avoid these issues. Books reviewed with an auditor’s eye before delivery catch problems before they reach you. But even with a good bookkeeper, staying engaged with your numbers and asking questions keeps everyone accountable.
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