10 Key Interview Questions
Introduction
Over my 30 years in public practice as a Chartered Accountant I have been asked, numerous times by my clients, “how do I find a bookkeeper”. So over the years I have developed a checklist of questions to ask a prospective bookkeeper.
What Bookkeeping/Accounting Certifications Do They Have?
There are three types of certifications that you should look for in a bookkeeper in Canada:
Each of the following organizations provides technical bookkeeping certification:
- The Institute of Professional Bookkeepers of Canada
(CPB – Certified Professional Bookkeeper) - The Canadian Institute of Bookkeeping
(CB -Certified Bookkeeper) - The Canadian Bookkeepers Association
(RPB – Registered Professional Bookkeeper)
Alternatively, bookkeepers may have taken an accounting or bookkeeping certificate program through a private or public college. It is probably worth a phone call to any organization that they say they have been certified by to confirm their certification status.
Certification on Accounting/Bookkeeping Software:
There are two main accounting/bookkeeping programs in Canada: QuickBooks by Intuit and Simply Accounting by Sage. Each company has their own certification program:
- For QuickBooks, you can be a Certified QuickBooks Pro Advisor
- For Simply Accounting, you can be a Simply Accounting Certified Consultant
Any bookkeeper who has been certified on accounting software is likely to be much more efficient than those who have not.
Payroll Certification:
If you want your bookkeeper to have payroll responsibilities, you will want a bookkeeper who has at least a minimum certification level with the Canadian Payroll Association. They have two levels of certification:
- PCP – Payroll Compliance Practitioner
- CPM – Certified Payroll Manager
For most small businesses, PCP is all they need. CPM is primarily focused on payroll for larger companies.
What Kind of Bookkeeping Experience Do They Have?
You should be looking for a minimum of three years of full-time experience providing full-cycle bookkeeping to small businesses. The issues that come up for small business are different than those that a bookkeeper would encounter doing bookkeeping for larger companies.
You should also make sure that they have relevant bookkeeping experience with small businesses in your industry. The most relevant experience will be in businesses just like yours. Ask how many clients they have in your industry. Make sure to obtain references.
Will They Provide References from Professional Accountants?
Many small business owners may not understand enough about technical bookkeeping in order to be able to judge how good their bookkeeper is with respect to bookkeeping, accounting, GST, PST and payroll. They may be able to vouch for a bookkeeper’s timeliness, their client service skills and their personality. However, if you really want to know whether or not they are technically proficient, you should ask one or more professional accountants that they have worked with in the past. The accountants will know how much or how little time they had to spend cleaning up the bookkeepers work at year end. It always pays to check these references.
Which Accounting/Bookkeeping Programs Do You Support And Recommend?
There are two main accounting/bookkeeping programs in Canada:
- QuickBooks by Intuit
- Simply Accounting by Sage
You want to make sure that they use one of these two programs for three reasons:
- Both of these programs are significantly more efficient than trying to do bookkeeping manually or using a spreadsheet program like Microsoft Excel.
- Most professional accountants support both of these programs and can import the bookkeeping data from either directly into the program they use to prepare your financial statements and income tax returns. If you do not use one of the programs, the year end processes will take your accountant longer and he or she will have to charge you more.
- In case you have to move to another bookkeeper some day you will want to be using software that most bookkeepers support.
If you do not yet use one of these two programs you should note the following:
The program versions available in Canada are different from the program versions available in the US. In the US, QuickBooks has over 85% of the US market. In Canada, it is difficult to confirm numbers. QuickBooks appears likely to still be ahead, but both organizations claim to sell more copies of their software in Canada than any other program.
It used to be that Simply Accounting was the favourite for accountants because of its built-in audit trail and robust inventory module. Today, it seems that QuickBooks offers the same functionality and is significantly more user-friendly and intuitive.
How Do Bookkeepers Charge For Their Services?
With bookkeeping, as with most other services, you generally get what you pay for. Inexpensive hourly rates can turn out to be more expensive if the bookkeeper takes more hours than someone at higher hourly rates.
Bookkeepers usually charge by the hour. In Canada, rates range anywhere from $15 per hour to $125 per hour depending on skill level and experience. Most people who know what they are doing would not charge less than $40 per hour. Most very experienced bookkeepers charge more than $50 per hour. Note that people who charge more per hour are generally more efficient than those who charge less, with the result that some of the most experienced bookkeepers who charge the most per hour turn out to be the least expensive because of their efficiency.
Some bookkeepers charge a fixed amount per transaction. This can work well for very simple businesses.
Bookkeepers usually charge for payroll services either based on their hourly rates, or provide fixed fees per month, per employee. Fixed fees for payroll with 5 employees can run anywhere from $40 per month to $120 per month.
Set-up Fees
Setting up new bookkeeping clients is a very time-consuming process. First, the bookkeeper has to learn enough about the client that they can know how best to set them up in the accounting program. If it is a new business and the client has not used an accounting program before, set up requires setting up a new charge of accounts, and setting up initial preferences including vendors and clients. If the business is established and the client has used an accounting program before, the process can be even more time consuming.
Retainers
Many bookkeepers charge in arrears for their services. They do the work and then send out their bills. Unfortunately, some clients take advantage of this and refuse to pay when the work is complete. As a result, many bookkeepers are now requesting retainers. Retainers work like this:
Prior to accepting you as a client, the bookkeeper will request a payment from you equal to one or more months of your estimated bookkeeping charges. Sometimes, the bookkeeper will just hold this retainer until such time as you cease to be a client of theirs, at which point they return your initial payment to you. In the meantime, they invoice you regularly for work that they do and expect payment. If you refuse to pay their bill, they will use the retainer to cover work that they have already done.
In other circumstances, the bookkeeper may take an up-front retainer, but instead of billing you on a regular basis and waiting for you to send in your payment, they just take the full amount of their invoice out of your initial payment and then request that you top-up your retainer.
Miscellaneous Charges
Many bookkeepers charge extra for photocopying, printing, files, binders, courier, faxes, etc. Be sure to ask about all the additional charges that the bookkeeper may charge you for. They can add up quickly.
Do They Provide A 100% Client Satisfaction Guarantee?
Most bookkeepers want their clients to be satisfied with their work, but few put their money where their mouth is. Make sure any bookkeeper you are thinking of working with will stand behind their work and give you a 100% satisfaction guarantee.
Do They Work On-Site Or Off-Site?
With technology today, there is not much that requires a bookkeeper to actually go to a client’s office. In most circumstances, it is more efficient and less costly for the bookkeeper to work from their own home or office. This also saves you the hassle of having to set up appointments to meet with your bookkeeper and you don’t have to provide them with a desk and computer. It also means you don’t have to purchase and maintain your own copy of accounting/bookkeeping software.
Having said that, there are certain circumstances where you might want to consider having the bookkeeper come to your office:
- You require more than 10 hours per week of bookkeeping
- Your company has a complicated inventory system
- You need extensive job costing
- You want your bookkeeper to take on additional administrative tasks or you want them to make bank deposits
Do They Prepare Tax Returns?
Many bookkeepers and non-licensed accountants prepare income tax returns. They argue that they can do them less expensively than accountants. We do not. At Joseph A. Truscott, Chartered Accountant, A Professional Corporation, we believe that income tax planning and income tax return preparation are complex tasks that are better left to the professionals. Chartered Accountants take many, many hours of courses and write complex exams in order to get their designation. They participate in tax study groups and they take ongoing professional development courses year after year. Many take a two year “In-depth Tax Course” offered by the Canadian Institute of Chartered Accountants.
Some bookkeepers have taken introductory courses on bookkeeping, but few (if any) have the knowledge and experience to ensure that your returns are prepared correctly and that you are getting the benefit of all of the tax savings that you are entitled to. There is a reason that having your bookkeeper prepare your tax returns is cheaper – they do not have the same knowledge and experience as professional accountants and their tax knowledge is not worth as much. We strongly suggest that bookkeepers should leave taxes to the experts – professional accountants.
How Secure is Your Confidential Financial Information?
Many bookkeepers still use e-mail to exchange confidential financial information or store confidential client information on laptops that they travel around with. This is the last thing that you want.
How Can I Get My Monthly Information To Them?
If you are planning to work with an off-site bookkeeper, make sure they have set up an easy way for you to get documents to them. Also, find out whether they charge separately for courier service.
Conclusion
At Joseph A. Truscott, Chartered Accountant, A Professional Corporation, you can provide us with your monthly source documents in any of the four following ways and there is never any extra charge regardless of the method you choose.
- By Courier
- By Fax
- By emailing electronic copies of documents
- Delivery of documents to our office
If you have any questions, just call Joe Truscott, CA at 905 528 0234, Extension 224 or email me at [email protected].
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