Accounting and Bookkeeping, what type of person should I be hiring for my accounting-bookkeeping needs?
There are several parts to an accounting and bookkeeping system and one of the best ways to determine what type of accountants or bookeepers you need is to do a flow chart of how the paperwork flows through the office or business. Sit down and draw boxes and lines to show who needs to handle each part of the work.
For instance, say you have a home repair business and the accounting-bookkeeping is just now working out. Flow chart the entire system. First, probably a customer calls in with a job request. A clerical person may take an order, this could create a paper or electronic record (which is best?). A job number may be attached to this accounting and bookeeping record. The tech is then dispatched to the job and when finished, an invoice may be hand or electronically written and given to the customer. This may have the job number attached to it.
Usually, the tech will pick up a check or process a credit card (on his phone) to record the payment and give a receipt to the customer. Then he is off to the next job.
From an accounting-bookkeeping point of view, this transaction has so far involved two people, the order taker and the producer. Now some additional parts need to be added to the system. The job has to be recorded as a sale in the books. The payment has to be recorded as an increase to the cash account. If the payment was by check, someone has to take it to the bank. If parts were purchased to do the work, those have to be recorded as a purchase and then they have to be paid for.
Many transactions like this eventually must be recorded in a set of books, and financial statements and tax returns are produced.
Accounting and bookkeeping are involved in all of these steps and they may be done by one person or each job may have a separate person, depending on the size of the business. It is important to discuss the accounting and bookkeeping flow with your outside, independent CPA to set out your flow chart of tasks so that it includes a system of checks and balances. Maybe the person who took the order should log that order and another person should record the payment. This “segregates” the duties so that there is less chance that one person could pocket the money and delete the transaction all together.
Most people are honest, but setting up your system to encourage honesty and keep those tasks separate is easier if you use that flow chart to show each step in the process.
Once the system is flow charted, you will be able to determine what the skills and background need to be for each task. Often a person calls themselves a “full charge bookkeeper” when they really are a good clerk. A clerk generally takes charge of one area, like paying the bills, whereas an accountant will probably be the one to do the financial statements. Again, your CPA should be able to help you set up the skills needed for each position.