Accounting tends to be one of the first areas where people realize they’re in over their head. When you’re looking at bringing accounting capabilities or competency onto your staff, you aren’t necessarily talking about hiring a full-time accountant, or even a full-time bookkeeper. Sometimes, you just need someone to help you manage your books for a more effective result. In any case, it’s important for you as a leader to recognize where you need help, and then recruit someone who can help you. Hiring a part-time bookkeeper to perform the entries into your booking software, book your revenue, and book your expenses can be a reasonable solution. From there, a CPA can look over the bookkeeper’s work and handle larger needs: financial statements, balance sheets, statements of cash flow, etc.
Over the years, I’ve seen a lot of people who fail to bring in accounting help. Some will keep a legal pad to record their expenses (if they write them down at all), and then by the end of the year, they don’t have any record-keeping and their accounting is a mess. They spend weeks trying to sort through everything! My advice to you is to be honest in your assessment of your business. If you discover that you need help, pursue it!
Delegating Accounting Duties: A Personal Example
Accounting is definitely not my personal strength, so I realized pretty early on that we needed some accounting help. When I first brought a bookkeeper in, we sat down to discuss her job description. Some of the expectations we outlined were the following:
- Work part-time (3 days a week)
- Receive rental income and make deposits
- Update our booking system and make entries
- Make sure our bills are paid
- Get checks ready for me to sign, and then mail them
Between all these duties, our first bookkeeper probably worked about 10 hours a week, and she did a great job offloading our accounting stress.
Understandably, people can feel anxious when giving someone else access to their checkbook. There are definitely some inherent risks to this. The way you can mitigate these risks is by having some checks and balances in place to limit (and hopefully prevent) abuse.
The first level of security that I would recommend is to hire a CPA to review your finances on a regular basis. By having the CPA reconcile your checking accounts each month, there’s a good chance that you’ll be able to catch any inappropriate transactions within your business.
Some other checks and balances that can help limit your liability are (1) prohibiting or capping the amount of any potential wire transfers, (2) not authorizing the bookkeeper to sign checks, (3) preventing electronic bill payments or transfers, (4) setting up a two-signature system for cashing checks.
After putting in place some checks and balances, you should feel confident in your ability to delegate your business’s accounting duties. Next, let’s look at the benefits of accounting delegation.
The Benefits of Delegating Accounting Duties:
Delegating accounting duties can have such a huge impact on the overall health of your company and hiring some accounting help is nota time or place to skimp. No matter what you’re doing or how much money you’re making, you will get absolutely hosed if you don’t have good accounting processes in place. With that being said, let’s look at a couple general benefits of delegation.
- Someone can focus and do a better job than you. Unless you’re naturally talented at bookkeeping, delegating those duties adds value to your company because someone can ensure your accounting is accurate and up to date, which is critically important. I know some property managers who try to double as bookkeepers, and what usually happens is that bookkeeping gets pushed to the end of the month, quarter, or year, by which point it’s near impossible to do a credible job. By hiring someone to help you along the way, you can maximize your business’ effectiveness.
- You gain intentional redundancy. Simply put, you don’t have to be everywhere at once if you hire some accounting help. You never know when you’ll need an extra set of hands, and a good sign of credible leadership is asking others for help.
When you bring someone on board, it can be as an independent contractor (1099 Labor) or as an employee of your company (W-2 Labor). I think there could be good reasons to consider either strategy. Oftentimes, you will find local bookkeeping services that will charge you a fee for maintaining your company’s books. This can be more efficient than having a W-2 employee that works for you. However, if your business is growing and you desire to have more control over when and where the bookkeeping is done, it may be in your best interest to hire a part-time person to work for your company. Either way can lead to the same result of effectively delegating these responsibilities.
In Summary:
- Be honest with yourself when it comes to your accounting needs. Accounting is too important to not give it the attention and care it deserves.
- If you decide to bring in some accounting help, make sure to outline clear expectations with that person and establish some checks and balances to prohibit financial abuse.
- By delegating your accounting duties, you can rest assured that a critical element of your company is taken care of and focus on other areas of your business.