Before you hand over the books: questions to ask an outsourced bookkeeper

Ask about the person, the process and the paper trail

Before you hire an outsourced bookkeeper, ask who exactly will do your books, what they deliver each month and by when, how they reconcile your accounts, what credentials the team holds, how the fee is set, and who owns the file if you leave. Clear, specific answers to those six questions predict good service better than any sales pitch. Vague answers, especially about who does the work and what the price includes, are the warning sign.

I am happy for owners to put these questions to us, and I would rather they did. A bookkeeper will see every dollar that moves through your business, so the hire deserves the same care you would give a key employee. The difference is that you cannot watch an outside firm work, which is why the questions have to do the watching for you.

Below are the questions grouped by what they reveal, with the kind of answer I would want to hear.

Who will actually touch my books?

Some firms sell under one name and pass the work to whoever is free that week, or to an overseas team you never meet. That is not automatically bad, but you should know it. Ask for the name of your bookkeeper, whether that person stays on your account month to month, and who covers when they are out. It also helps to ask how many clients each bookkeeper carries, because a person juggling too many accounts closes everyone's month late.

Then ask how you reach them. A good answer names a person, a phone number and a typical response time. Our firm publishes a typical response time of 24 hours, and clients reach a bookkeeper or tax preparer rather than a call center. Whatever the firm, you want someone who already knows your business when you call, not a ticket number.

• What is the name of the bookkeeper assigned to my account?
• Will the same person handle my books every month?
• Who covers when that person is on vacation or leaves?
• How do I reach them, and how fast do they usually reply?

What credentials does the team hold, and do they matter?

Anyone can call themselves a bookkeeper; in Texas, as in most states, bookkeeping is not a licensed profession the way public accounting is. That makes the credentials a firm chooses to earn more telling. For QuickBooks work, ask whether the team includes a Certified QuickBooks ProAdvisor, which shows training in the software most small businesses use. Ask which versions they support. We work in both QuickBooks Online and QuickBooks Desktop, and that matters if you are not ready to switch.

For anything involving the IRS, the credential that matters is the right to represent you. The IRS describes an Enrolled Agent as a person who has earned the privilege of representing taxpayers before the agency, with unlimited practice rights. CPAs and attorneys can also represent you. A bookkeeper without one of those credentials can organize your records but cannot speak to the IRS for you. If a notice arrives later, you want to know whether the firm can handle it or will send you elsewhere. My guide on setting up an IRS payment plan explains where that line falls.

What do I receive, and by what date?

This is the question that separates bookkeeping from data entry. Ask which reports you will get each month, and by what day of the following month. At a minimum you should receive a profit and loss statement and a balance sheet built from reconciled accounts. Many owners also benefit from a cash flow report, an accounts receivable aging report or a simple KPI dashboard.

Ask to see a sample report package with the client details removed. If the firm cannot show you what a finished month looks like, it may not have a finished month. And ask what happens when they find something they cannot categorize. A good process batches questions to you once or twice a month rather than either guessing or interrupting you daily. Finally, ask whether the report comes with a short explanation. Numbers you cannot interpret are not much better than no numbers, and a good bookkeeper will tell you in two sentences what changed from last month and why.

• Which reports arrive each month, and by what date?
• Can I see a sample month with the client details removed?
• How do you handle transactions you cannot identify?
• Do you reconcile every account, including credit cards and loans?

How is the price set, and what is outside it?

Ask whether the fee is flat or hourly, what it covers, and what triggers a change. A written proposal should list the accounts reconciled, the reports delivered and the services included, such as accounts payable, accounts receivable or sales tax filing. It should also state how payroll, tax returns and any cleanup of past months are priced. I break down the drivers in detail in what monthly bookkeeping costs and what a flat fee covers.

Listen for the word estimate. An hourly estimate is a guess you pay for if it is wrong. A flat fee set after the firm has looked at your actual statements is a commitment. Either way, get it in writing before work starts.

Will the same books be used for my tax return?

Many of the problems I see at tax time come from a handoff. One person keeps the books all year, a different firm prepares the return, and nobody reconciles the two. The tax preparer makes adjustments the bookkeeper never sees, so next year starts from numbers that do not match the filed return. I see this regularly with Dallas small businesses that switch firms mid-year.

Ask whether the firm prepares tax returns from the books it keeps, or how it coordinates with your CPA or Enrolled Agent if not. At our firm the bookkeepers and tax preparers work together, so the year-end return comes from the same books you saw all year. If you prefer to keep your current tax preparer, that is fine; just ask how the year-end handoff works and who makes the adjusting entries.

What happens to my data, and can I leave?

Ask whose name the QuickBooks subscription is in. If the firm owns the file, leaving can mean losing your history or paying to get it back. You want the file in your company's name, with the firm invited as a user, so you can change bookkeepers without starting over.

Also ask how documents are exchanged. Emailing bank statements and tax forms back and forth is common and risky. A secure client portal is the better standard, and the firm should be able to tell you who on its team can see your file. Finally, ask what notice either side must give to end the engagement and what you receive when you go.

• Is the accounting file in my company's name?
• How do we exchange statements and documents securely?
• Who at your firm can see my financial information?
• What notice is needed to end the service, and what do I get back?

How would you start with books in my condition?

Describe your books honestly, including the uncomfortable parts, and ask how the firm would begin. If you are behind, a good firm explains how it will catch you up, how long that takes and what it costs, separately from the monthly fee. Our onboarding typically takes one to two weeks and covers QuickBooks setup, connecting bank feeds and cleaning up historical issues. If you are further behind, the approach in my guide to catching up books that are months behind applies.

If the books are current, ask how the firm checks that the opening balances it inherits are correct. Starting monthly service on top of a balance sheet that does not reconcile just moves the old problem forward. A careful firm tests the starting point before it builds on it. If you are not sure whether yours is sound, these signs your books are off are a quick way to check.

Answers that should make you walk away

Some answers end the conversation for me. A firm that cannot name who will do the work. A price quoted before anyone has looked at your statements. Reports delivered quarterly when you asked for monthly. A promise that they can cut your taxes before they have seen your books. A refusal to put the file in your name. Any of these suggests the firm is selling something other than careful bookkeeping.

Softer warning signs deserve a follow-up question rather than an exit: very low prices, a vague list of inclusions, or no clear plan for questions and year-end. Sometimes there is a good explanation. Often there is not.

• No named person responsible for your books
• A firm price before anyone has seen your statements
• Reports less often than monthly, or no fixed delivery date
• Tax savings promised before the books are reviewed
• The accounting file kept in the firm's name

A first meeting that answers all of this

Our first conversation is a free 30-minute consultation, by phone or at one of our offices in Plano, Garland or Flower Mound, and the questions above are fair game. We will ask about your accounts, volume, payroll, sales tax and how current things are, then send a written flat-fee proposal that spells out what is included and what is not.

If you are interviewing several firms across Dallas–Fort Worth, bring the same list to each one and write the answers down. The comparison usually makes the choice obvious, and the firm that answers most plainly is often the one that will keep your books most plainly too.

Questions people ask me