9 Questions To Ask Before Engaging An Outsourced Bookkeeping Service


Your Business Is Growing, It’s Time To Hire A Bookkeeper.


It’s an exciting time in business when you have grown to the point that you cannot keep up with the bookkeeping.  Though it may feel more stressful than exciting right now.  When you find yourself bogged down in the processing of accounts and reconciliations in order to get your quarterly BAS lodged, you know it’s time to find an outsourced bookkeeping service.

Seeking an outsourced bookkeeping service can be confusing and we noticed that a lot of business owners do not know what questions to ask when qualifying a bookkeeping service.  Therefore, we have put together a list of questions you should ask when speaking with a bookkeeper to establish if they are the right fit for you and your business.  You should also note that the bookkeeper should be asking you lots of questions about the business, the current structure and systems, and the business history and how the bookkeeping has been handled to date.

Here are 9 questions that will help you to decide if the outsourced bookkeeping service is right for you.

1.      What is the scope of the bookkeeping service?

This may sound like an obvious question but there is a lot of difference in the scope that some bookkeeping services offer.  Your requirements also vary depending on how much of the work you wish to do internally and how much your accountant does for you.

Some bookkeepers will only have data entry knowledge.  Others can act as a management accountant who can help you to use your data to make important business decision and growth decisions.  It may also depend on what software requirements you have within your business.

Consider who will be doing the following tasks:

  • Bank reconciliations – how often are they done, how may bank accounts and credit cards are there?
  • Accounts payable processing – entering of supplier bills and making payments
  • Raising sales invoices, processing receipts and chasing up overdue accounts.
  • Checking of account coding of transactions and GST coding
  • Calculation and lodgment of BAS, IAS and TPAR
  • Compilation and interpreting of reports such as Profit & Loss and Balance Sheet so you understand what is happening in your business.
  • Preparation of budgets to monitor performance.
  • Calculation of cashflow forecasts to help plan cash inflows and cash outflows in the future

Not all bookkeepers are created equal, so get clear on what you want them to do.

2.      Is the bookkeeper a registered BAS Agents, and do they hold the appropriate qualifications?

Working with a bookkeeper requires you to hand over a lot of personal information that must be prepared correctly for compliance purposes.  Having somebody who is qualified is really important.

You should choose a bookkeeper who is also a registered BAS Agent with the Tax Practitioners Board.

If not a registered tax agent, and you will therefore need to lodge your BAS (if that is a requirement for your business) through your accountant, then ensure you bookkeeper hold a minimum of a Certificate 4 in Accounting and Bookkeeping.  This will make sure they have an understanding of GST law so they code everything correctly.   Otherwise you may have a very hefty accounting fee.

3.      What is their level of expertise?

Experience really does count.  Qualifications are all good, but you need the bookkeeper to be able to apply knowledge and offer advice on systems and processes to ensure your business is set up for success.  Plus, you don’t want to have to pay somebody else to clean up their mess if they are not as experienced as they claimed.

Ask what experience they have with the accounting software you use.  They should be certified (Advanced Certification if there is one) in your software.  Majority of bookkeeping firms recognise that having these certifications ensures their staff are efficient when doing client work, which means less cost for you, and they are a great support if you have questions on the system yourself.

Ask what systems they have in place to ensure timeliness and to monitor the standard of the work they are doing for you.  If they have staff this is highly important.

4.      Have they had experience in your industry?

Industry experience is highly recommended.  Every industry has its differences in accounts processes, and requirements.  Ask the bookkeeper if they have or have had in the past clients who are in your industry or a similar industry.

If they haven’t, that is ok if you both understand that there may be a learning curve involved.  Ask what they will do in their own time, prior to commencing to find out the in’s and out’s of your industry so you are not paying for their learning time.  Of course, you will also have your own way of doing things, so don’t expect them to know ‘your way’.

5.      What are their communication processes with their clients?

When you commence working with a bookkeeper there is a lot to communicate.  So ensuring the communication systems are effective is important so as to not waste your time as a busy business owner.  Your time is valuable, and the bookkeeper should understand this.

So ask what their communication processes are, sometimes bookkeepers cannot answer this question, this is a sure sign that they are inefficient.  They should also ask you want your preferred communication method is.  If they don’t, ensure you set this standard from day one.

Here at Perth Bookkeeping Professionals one of our focuses has been to implement systems that allow us to speed up our response times.  We have implemented a lot of new software and programs, and work a lot on our communication methods to provide you with a faster more efficient service, while still proving the best quality service.

6.      What can you expect around turnaround times, and response to your questions?

A common complaint about bookkeepers is they are very busy and often hard to get hold of.  This is especially true for bookkeeper who work on their own as contractors.  It’s important to have a clear understanding on what you can expect when you have queries and deadlines.  Or if you have ad hoc work to be performed.  You don’t want to be wasting time having to follow up bookkeepers for BAS’s to be signed or responses to queries you have emailed to them.

7.      Are the bookkeeping services being performed locally or off-shore?

Sending client work off-shore is being used more and more by accountants and bookkeeping services.  If you are looking to engage with a bookkeeping (or accounting) firm, ask if they do the work locally or send it overseas.  In the case that they do send it overseas, ask a lot of questions about the online security they have in place.

If you are not comfortable with off-shoring firms, then find one who does all the work locally.  We do!  Perth Bookkeeping Professionals find that outsourced bookkeeping, should still be performed by local staff.  Staff that our clients enjoy communicating with, and trust.  It is important to us to build a relationship with you as this is when the magic happens  This is when we can help you to grow your business and your profits.

8.      What forms of cyber security and internal procedures do they have in place to protect their clients?

When you share financial information about your business, you need to be able to trust that it will not be compromised.  There is a lot of cyber crime out there, and you need to be sure that your bookkeeper is taking extra steps to protect against this.  At Perth Bookkeeping Professions we use the portals of the accounting software as well as Karbon and Practice Protect to ensure the security of logins and email correspondence.

You should also ask about internal controls and segregation of duties.  When one person is doing all the work from A-Z it is much easier for mistakes to be made and overlooked, and in much worse cases, fraud and theft.  Rest assured it hasn’t happened to us.  When you work with a bookkeeping firm that has a team of bookkeepers working with you, internal security and audit procedures are far superior.

9.      How do they price their bookkeeping service?

A lot of bookkeepers are moving towards a fixed monthly price.  Some still charge by the hour. So be clear about how you will be charged by the bookkeeping service you are looking at.

If they use a fixed pricing system, then ensure you are clear on what service is and isn’t included.  Also ask what happens as your business grows.

If the bookkeeper charges an hourly rate, ask how long each task will take.  Otherwise you could be up for hundreds of dollars you didn’t expect.  This also ties back to the experience and efficiency, don’t pay too high a rate if the bookkeeper is inexperienced.  If they are doing basic data entry, and haven’t done a lot of it before, it could potentially take them twice as long as a bookkeeper who has loads of experience in your industry and with the software you use.

Perth Bookkeeping Professionals use both.  We recommend an hourly rate in block time at the start, so you know how much it will be.  We will communicate with you and reassess at the end of that time period on how much longer we will need.  Once we are sure of what work needs to be done and how regularly, we can work out a fixed price package so you know what the costs are each month.  With no nasty surprises.

Good luck with sourcing a bookkeeper who you can trust and develop a great relationship with.  When you do, you will see so many benefits.

We have put all these questions into a FREE DOWNLOAD as an easy reference checklist. Grab yours here.  Download Button (To mail chimp landing page)