Most bookkeepers do not have the necessary education in accounting to produce reliable financial statements. Additionally, few have little concept of good internal controls, nor do they understand the necessity of it. Yet, many business owners blindly place confidence and trust in them.
It is easy to understand why this happens; most people are intimidated by bookkeeping and accounting. When a bookkeeper exudes confidence, it is natural for a business owner to eventually give them their trust. Why? Because giving this trust, however misplaced, gives them peace of mind.
But trust in a confident, yet unqualified bookkeeper is a big mistake. I’ve seen many instances where such bookkeepers have caused business owners to make decisions that have cost them dearly. This includes decisions made on faulty financial information, incurring excessive payroll costs, excessive year-end CPA costs, and even theft.
Before putting your trust in a bookkeeper, be sure to carefully vet their resume and background. Simply having QuickBooks or other low level certification is not enough. Even if you think your bookkeeper does great work, they should be supervised and reviewed by a qualified accountant or CPA.
For most businesses, the best option is Business Process Outsourcing (BPO). With proper BPO, all accounting functions are outsourced, performed, and supervised by qualified accounting professionals. Additionally, the cost is substantially lower than that of traditional in-house accounting departments.