Hey folks!

This is Josh with Lappin Bookkeeping Services located in Greenville, NC. Today I just want to talk to you a little bit about how you can tell if your bookkeeper is doing a good job in 10 minutes or less. Just so you know a little bit about me. I am a graduate of Barton College with a degree in accounting. Since then I've worked in various financial roles that include accounting and my family has started a variety of businesses including daycare, a real estate investing company, and a counseling service before I moved into full-time bookkeeping and accounting services a couple of years ago. I am a QuickBooks Proadvisor and I have consulted for QuickBooks over the last two years so I have direct interaction with Quickbooks on a weekly basis. Here are a few of our credentials. Again QuickBooks Pro advisor, a member of the Digital Bookkeeping Association and I am a Certified Bookkeeping Professional from Intuit.

How can you tell if your bookkeeper is doing a good job? So these are the 10 things that I would check for.

1. Bank Transactions

2. Reconciliation screens

3. Balance Sheet

4. P&L

5. A/R and A/P reports

6. Bank Deposits

7. Rules

8. Receipts

9. Speed of communication

10. Monthly meetings/Review of financial statements

We are going to go over these individually and I'm going to show you exactly what to look for in your QuickBooks account. So what we're going to do is we're going to transition over to a QuickBooks account so we can see the examples that we're going to look at here. We are in the QuickBook sample company. This is Craig's design and landscaping services. If you're a service-based business your QuickBooks account may look very similar to this. Just a quick plug for QuickBooks, if you're new to QuickBooks, I'm getting into the sample company, which is a good place to be able to play around and experiment with how QuickBooks works without damaging your own books.

The first thing that you should check to see if your bookkeeper is doing a good job is the bank transactions. So if we go here and we click on the transactions, it's going to show all of our connected accounts. This particular business has a checking, a savings, and a MasterCard, which is a good setup for a small business. If you flip through each of these accounts by clicking on them and scroll down here, you're going to see all these transactions. The transactions themselves are not concerning. What's concerning is the fact that as of the filming of this video, it is March the 5th 2024, and if you flip through here you can see that you've got transactions going all the way back to early 2023 into January. That's a sign, number one that the bookkeeper is not putting priority on getting your transactions categorized quickly, preferably on a weekly basis.

So right from this screen, the easiest way to go to the next sign is right from here. We want to check the reconciliation screen. If we go to the bank register and then we go to reconcile, what we're looking for is this. There are two or three different things you can check. One is this. We want to see something in this area that says the last date that this account was reconciled. If you go to the history, you can also check as well. Normally if they're reconciling there would be dates in here, but this could also be a concerning signal is that nothing is showing as being reconciled and if something had been reconciled, it would show the last date. If your account has not been reconciled in the last 30 days, that's definitely a red flag.

Sign number three. Let's go to the reports. This is going to bring the most used reports, which we're going to check into all three of these here. The first one, the balance sheet. If we look at our balance sheet, we're going to set it to our current year which this is correct and you want to scroll through your balance sheet and look for a couple of things. First you want to make sure that all your account balances are positive. If you have negatives out beside any of these numbers, you know that something is not going well. 99% of the time everything on the balance sheet should show positive numbers. This one here could also be concerning the opening balance equity. There's a negative number in there. That is something I would be concerned about. So just reviewing your balance sheet to see that nothing has negatives and nothing says deleted beside it. That's a good step in the positive direction.

If we continue back to our reports, the next item which is number four, if you were following along is the profit and loss. We're doing something very similar. We want to check and make sure all of our account balances are showing as positive. This one is showing as negative, but that is technically correct because this is a discount field. Something would concern me is this one here. The pest control services are showing a negative number. That's something you would want to check into. This is also a red flag, a miscellaneous expense and it's a very high expense. According to professional accounting standards and tax rules, it requires items to be classified into clearly identifiable accounts like these are here you can clearly tell what the expenditure was. Under miscellaneous are going to bring up red flags and could also lead to an audit situation so you want to avoid those. So those are just really quick tips on your financial statements for things you'd want to look for.

We could go much deeper into that but that'll have to be for another day. Another item you can check for is if you go to your plus new button here and you go to your bank deposits. You're going to want to make sure that this section is current . So this is actually a little bit behind. These deposits are almost a month old so they need to be cleared out and reconciled. So that's another red flag. If you do a lot of bank deposits, physical deposits in the bank, this section needs to be cleared out probably on a weekly basis, but definitely at least on a monthly basis, so I would definitely want to know what was going on with that.

Item number seven if you're following along is the rules. We go to transactions and we go to rules. If your bookkeeper is doing a good job, they should have rules set up here and this one doesn't have any. What that means is that if you think back to our bank transactions, section that means that they are manually processing every single one of these transactions. What that means to you is they're spending more time on your account which leads to higher fees. Accountants who are familiar with QuickBooks and are trained in QuickBooks and know how to do this well. We'll set up rules in this section here and what these rules do is just pick a very basic example. Anytime it sees a specific expense for a specific vendor is going to create a rule and that rule is going to automatically process itself which means as long as the expenses are within the parameters you set, it's going to go ahead and categorize it for you which long story short, is going to save you time which saves money. So that is another area I would check as well that can be another whole topic in itself.

I did skip over one in our chronological list here. If we go back to our reports to our Accounts Receivable summary. This is going to show us what our accounts receivable is looking like up to the current date that you set. So this would be today. So this is something that your bookkeeper should be reviewing with you each month to make sure that you are keeping current on the invoices and if there's any corrections that need to be made, that they are making this correction. If you run invoicing, your bookkeeper should be presenting you with this account report each month. You can also do this with the accounts payable as well. There's a report for that as well in here. That's another one if you process a lot of bills through QuickBooks.

Number eight. Getting back in chronic chronological order here. Another thing I would check is receipts. So either the business owner or the bookkeeper needs to be responsible for processing the receipts. This area will show you any receipts that have not been processed. This one is blank, so I would think that's a good thing but that is something you want to check with your bookkeeper as well as making sure that someone is keeping up with the receipts. All right, we're back to the slideshow here. Number nine is your speed of communication. How fast is your bookkeeper getting back to you? Are they responding to your calls, your texts and your emails in at least 24 hours time frame?

Then number 10. Are you having regular financial meetings with your bookkeeper? Preferably, it should happen at least once a month and during this meeting they should be reviewing your financials with you and discussing anything that is concerning or anything that could be done to improve your books. Or anything that they're seeing that could be out of the ordinary. So here are your 10 things to check to see if your bookkeeper is doing a good job. If you have additional questions or concerns or perhaps you discover that your bookkeeper may not be providing you the highest quality of service available, feel free to reach out to us. We are happy to give you a free 30 minute consultation and analysis of your account and what it would look like to have really good high quality bookkeeping and accounting services provided to you. Again this is Josh with Lappin Bookkeeping Services located in Greenville, NC. Thank you so much for your time. I look forward to hearing from you soon!