10 Expectations for Your Bookkeeper

(that will save your business)!

We like to think that anyone can learn to do books. That’s like saying that anyone can learn to be a builder. Which is true. However, some learn the skills easily and others can work at developing the skills for years and still only be “average”! As a contractor, you are very familiar with the job aspects and bookkeeping tends to not be a strong point for you. That’s why you’ve hired a bookkeeper! But you need to make sure that they know what to do! Don’t just take them at face value! You need to set expectations.

I could fill a book on the horror stories I’ve seen in my years of working with contractors. Part of it is that they are not familiar enough with the various concepts to set expectations for their bookkeepers. It’s not about picking on anyone…it’s just about making good business decisions.

Here are 10 Expectations that you need to set for your bookkeeper to ensure that they are providing the output your business needs for success:

1. Detail oriented. You need someone who is going to be able to focus on the little things; which will enable the big things to take care of themselves. You don’t have time to babysit them, they need to be able to take charge and take care of all the little things that need attention for the basic financial operations.
2. Basic understanding of bookkeeping/accounting terms. They should have a basic understanding of the difference between the five basic types of accounts (Assets, Liabilities, Equity, Income, and Expenses).
3. Understanding of the big picture. When you build a spec home, do they understand the concept between setting up the asset and liability accounts and then transferring the costs to cost of goods sold at the time of the sale? Do they know how this differs from the build job projects?
4. Willingness to follow through. You want someone who will ensure that projects and questions are followed through to completion. They need to be responsible for the follow through as you’ll be too busy to be the one in charge of project completion. You are there to assist with questions, but the financial projects have to be something they are in charge of.
5. Monthly financial statements should be available by the 10^th of the following month. The three basic financial statements include Balance Sheet, Profit/Loss Statement, and Cash Flow Statement.
6. Continuing Education. They should be committed to continuing education to enhance their skills to ensure that they are staying up to date with the skills that your business demands.
7. Proper job costing. It’s important that they are tracking all the costs by item and job detail. Job costing is key to the success of knowing how much your homes are truly costing to build…you have to be able to depend on their information to be reliable.
8. Good communication skills. If your bookkeeper is also the first point of contact when potential homebuyers call, it is critical that they are skilled in their phone communication skills. This also carries over to their interactions with vendors and yourself. Communication is key so that you’ll have a good understanding of what is taking place in the office without you having to be the one doing the day-to-day functions.
9. Computer literate. The days of doing it by hand are long gone. You must have a computerized bookkeeping system to be able to get quality reports. They should not only know the basics of Word, Excel, E-mail, Internet, and your bookkeeping software. QuickBooks® is a popular software and it’s easy to find group and individual training to help them with their learning curve.
10. Understanding of the basic industry. While this is something that can be learned, you’ll be miles ahead on the learning curve if they have a general understanding of the construction industry. Bookkeeping for a retail store, hair salon, Internet service business and many others are going to have the same basic bookkeeping fundamentals; however, it won’t be the same. Each industry has different terms and insider aspects that can only be learned on the job.
11. Commitment to the business. Don’t let your bookkeeper “squeeze” these responsibilities into their personal life. This is one of the biggest issues I see with many small construction companies. They allow their bookkeepers to do it whenever they have time…you are enabling them to put your business at the bottom of their “priority” list. You need someone focused on ensuring things get done.

If you want your construction company to truly function in a profitable way, it is critical that you set the expectations for your bookkeeper. Good financial records are fundamental to the success of your business. If you can’t rely on your books, then how do you know where your business is headed?

No contractor is too big or too small…everyone has to have good financial fundamentals for ongoing success. 9 out of 10 businesses go out of business because of poor financial management. Don’t let your business be a statistic. Set the expectations for your bookkeeper so that they’ll be a successful part of your team. You’ll be setting your business up for success!

Contact: Pam Newman is a Certified Management Accountant, Author, and Certified QuickBooks® ProAdvisor for Financial and Point-of-Sale software. For more information, visit her website at www.rppc.net or call 816.304.4398. QuickBooks® is a registered trademark of Intuit. RPPC, Inc. is a third party provider of training for QuickBooks®, and is not part of Intuit.