7 Questions to Ask Before You Hire a Bookkeeper
So you've made the decision that you want to hire a bookkeeper. That's a wise move for your private practice. Hiring a bookkeeper is a crucial decision for therapists and dentists who want to ensure their financial records are accurate and up-to-date. At Therapeutic Tax Solutions, we specialize in bookkeeping, tax preparation, and tax planning for therapists and dentists.
To help you make an informed decision, here are seven essential questions to ask a bookkeeper before making this important decision.
Hiring a Bookkeeping Professional: Questions to Ask a Bookkeeper Before You Hire Them
1. Bookkeeping Experience: Have You Worked with Therapists and Dentists?
This is probably THE most important question to ask when hiring a bookkeeper. Understanding the specific financial needs of therapists and dentists is essential for accurate and effective bookkeeping. Therapists and dentists have unique requirements that differ significantly from other industries. You'll likely want to start the process by asking about industry expertise.
Specialized Knowledge in Therapy and Dentistry Bookkeeping and Accounting
Most bookkeepers and accounting firms are generalists. However, you're going to want someone who can provide more than just simple data entry. Look for a firm that is experienced in your field and familiar with the unique income and expense patterns typical of therapists and dentists. This ensures accurate financial tracking and reporting. The best bookkeeper for therapists and/or dentists will have specific knowledge of your industry and practice.
Handling Client Fees and Insurance Payments
For therapists, managing client fees, session tracking, and insurance payments is crucial. For dental accounting, understanding equipment depreciation, supply costs, and patient billing is essential.
Tailored Financial Advice for Therapists and Dentists
An experienced bookkeeper for dentists or therapists can provide tailored financial advice to help manage cash flow, maximize tax deductions, and improve overall financial health. This specialized insight can be invaluable for your practice.
Compliance with Healthcare Regulations
A bookkeeper knowledgeable about industry-specific regulations will help ensure compliance with all relevant laws and guidelines.
Industry Specific Benchmarking
When hiring a bookkeeper, ensure they can provide industry-specific benchmarking. This involves comparing your business’s performance metrics to similar companies within the same industry. A skilled bookkeeper uses this data to identify strengths and opportunities for improvement, helping you make informed decisions to enhance efficiency and optimize performance. Proficiency in industry-specific benchmarking means you get insights tailored to your field's unique challenges and standards.
Industry Specific Forecasting
It's also crucial that your bookkeeper has expertise in industry-specific forecasting. This skill involves projecting future financial trends based on historical data and market conditions relevant to your industry. Accurate forecasting helps you anticipate revenue changes, plan for growth, and manage cash flow effectively. By ensuring your bookkeeper is adept at industry-specific forecasting, you gain a financial partner who can help you set realistic goals and navigate uncertainties in your business environment.
2. What Services Do You Offer in addition to Bookkeeping?
Different bookkeepers offer varying levels of service. Understanding the scope of services provided will help you determine if they meet your needs.
Income and Expense Analysis
Income and Expense Analysis helps you understand your financial health by breaking down your earnings and expenditures. A detailed analysis allows you to identify patterns, control costs, and maximize profits. By examining your income sources and spending habits, a bookkeeper can offer insights to improve your financial management and overall business performance.
Comprehensive Financial Reporting
Comprehensive Financial Reporting provides detailed insights into your financial status, ensuring you have a clear picture of your business’s performance. This service includes preparing balance sheets, income statements, and cash flow statements. With accurate and up-to-date financial reports, you can make informed decisions, track progress, and meet regulatory requirements with confidence.
Budgeting
Budgeting services assist in planning and managing your financial resources effectively. A well-prepared budget helps you allocate funds appropriately, set financial goals, and monitor your spending. By working with a bookkeeper to create and maintain a budget, you can ensure financial stability and avoid unnecessary expenses.
Forecasting
Forecasting predicts future financial trends, aiding in strategic planning. This service involves analyzing historical data and market conditions to project revenues, expenses, and cash flow. Accurate forecasting enables you to anticipate challenges, seize opportunities, and make proactive decisions to guide your business towards sustainable growth.
Benchmarking
Benchmarking compares your business metrics to industry standards, highlighting areas for improvement and ensuring competitive performance. A bookkeeper proficient in benchmarking can identify where your business stands relative to peers, suggest best practices, and help you set realistic performance targets. This service ensures you stay competitive and continuously strive for excellence.
3. Can you Assist With Tax Preparation and Strategic Tax Planning?
Bookkeepers are not usually tax preparers or tax planners - but that’s where Therapeutic Tax Solutions separates from the pack. Unlike many bookkeepers who solely manage financial records, we are also highly qualified tax professionals with extensive experience in tax preparation. This dual expertise allows us to offer seamless integration between your bookkeeping and tax processes, ensuring that all financial aspects of your business are meticulously aligned.
By choosing our services, you benefit from having a single point of contact for both bookkeeping and tax preparation, which significantly reduces the risk of errors and enhances the efficiency of your financial management. Our in-depth understanding of tax laws and regulations enables us to provide accurate and timely tax filings, ensuring compliance and peace of mind.
Furthermore, we offer strategic tax planning advice tailored to your unique financial situation. We work proactively to identify potential deductions and credits, helping you to minimize your tax liability and maximize your savings. Our goal is to not only prepare your taxes but also to provide valuable insights and strategies that can positively impact your financial health throughout the year.
With our expertise in both bookkeeping and tax preparation, you can rest assured that your financial records are in expert hands. We are committed to supporting your business's financial success by delivering comprehensive and integrated services that address all your financial needs. By working with us, you gain a trusted partner dedicated to helping you navigate the complexities of both bookkeeping and tax preparation, ensuring that your business needs are fully met.
4. How Do You Ensure Accuracy In Bookkeeping?
Accuracy and confidentiality are paramount when handling financial records. It's essential to understand the measures a bookkeeper takes to ensure both.
Ensuring Accuracy in Financial Records
A reliable bookkeeper will have systems and processes in place to ensure the accuracy of your financial records. This means they should not only have someone doing the bookkeeping, but also a quality control process where another team member is reviewing the data for accuracy.
Certified in the Accounting Software they Use
Bookkeeping completed by a bookkeeping professional should always be done using one of the top accounting, modern softwares available to us. Not only should they use the software, but they should have certifications they’ve earned by passing exams and tests for that software. This ensures they are proficient in using the software, meaning less chances for errors in the accounting system and on your financial records.
Regular Reconciliations of the Accounting Records
Reconciliations are the only way to truly determine whether or not the records are accurate. Reconciliations need to be completed on a regular basis (monthly or quarterly) to ensure there are no errors in the accounting records. Reconciliations help pinpoint any discrepancies in the accounting records in order for steps to be taken to remedy them.
5. How Do You Maintain Confidentiality and Security?
Confidentiality is crucial when dealing with sensitive financial information. A trustworthy bookkeeper will prioritize the security of your data.
Secure Data Storage Solutions
When working with a bookkeeping firm or bookkeeper, you will have to share sensitive login access and data with them. Ensuring that your financial data and login information is stored securely, whether digitally or physically, is essential. A reputable bookkeeper will use encrypted systems to protect your information from unauthorized access.
Signing Confidentiality Agreements
A bookkeeper should already have an attorney prepared Services Contract you’ll need to sign before services commence. The contract should include a confidentiality clause in it to formally commit to protecting your financial information. This legal commitment provides peace of mind that your data will be handled with the utmost care.
Secure Communication Methods
When working with a bookkeeping professional it’s likely that you will discuss and share sensitive financial information. Email is not a secure method for sharing logins and passwords, financial reports or financial data as it can easily become compromised. So knowing how your bookkeeper plans on communicating with you is essential in determining whether or not they’ll take the extra steps needed for securing your information.
6. How Do You Charge for Your Bookkeeping and Accounting Services?
Understanding the fee structure is crucial when hiring a bookkeeper. It helps you budget for their services and ensures there are no surprises down the line. There's nothing worse than receiving an invoice and not fully understanding the services and billing structure in place.
Transparent Fee Structures
A thorough bookkeeper must provide a clear and transparent fee structure, detailing what services are included and any additional costs.
Comparing Hourly Rates and Flat Fees
Bookkeepers may charge hourly rates or flat fees for their services. Understanding the pros and cons of each can help you decide which is the best fit for your business.
Being Aware of Additional Costs
Inquire about any potential additional costs and how those fees are handled. This could be fees for additional services outside the agreed scope of services. This could be fees for software subscriptions, meetings, phone conversations, training, etc.Being aware of additional costs for services helps avoid unwanted surprises later on in the relationship.
Assessing Value for Money
Assessing the value provided by the bookkeeper is as important as understanding their fees. Better quality of life, paying less on taxes due to accurate accounting ensuring the most tax deductions, a great business tax deduction on the money you pay for bookkeeping, more time spent on marketing or seeing clients, more time doing personal things instead of bookkeeping, peace of mind that your bookkeeping is done right, and tax time will be so much easier with accurate, up to date, bookkeeping records!
The return on investment (ROI) that a skilled bookkeeper and bookkeeping firm offers goes well beyond just a monetary return, so definitely consider the value they are bringing to the table when discussing fees.
7. Do You Handle Payroll Services?
Managing payroll is a critical component of your financial operations and it's important to ask whether your bookkeeper offers these services and get their feedback. However, in our experience of working with therapists and dentists, we have found that it is in the best interest of our clients to manage their payroll in-house, rather than outsourcing it to a bookkeeper or accountant.
Here are a few reasons why...
Direct Control Over Payroll Processes
Managing payroll in-house allows business owners to maintain direct control over all payroll processes.
Customization and Flexibility
In-house payroll management offers greater flexibility and customization. Therapists and dentists can tailor payroll processes to meet their specific needs, such as handling unique compensation structures or integrating specific benefits.
Immediate Issue Resolution
With direct control, any payroll issues or discrepancies can be addressed and resolved immediately without waiting for an external service provider to act. This can lead to quicker problem-solving and a more streamlined operation.
Cost Considerations
For some practices, managing payroll in-house might be more cost-effective than outsourcing. Outsourcing payroll involves additional fees for the service provider. By managing payroll in-house, therapists and dentists can save on these costs, potentially making it a more economical option, especially for smaller practices.
Payroll Software Has Become Easier
We recommend Gusto Payroll Service to our clients. It's actually the only payroll company we endorse! After trying numerous payroll providers and facing repeated disappointments, we have found that Gusto stands out above the rest. Payroll can be complex and messy with many moving parts, but Gusto simplifies the process and has you fully covered.
Payroll and payroll liabilities are prime targets for audits, making it crucial to choose a reliable and accurate provider. Gusto's robust and dependable service ensures that your payroll is handled accurately, reducing the risk of audit issues.
An impressive 72% of Gusto’s customers spend five minutes or less on payroll. Gusto offers full-service payroll, including unlimited payroll runs, W-2s and 1099s, and management of federal, state, and local taxes, all included in their fee. Plus, they offer even more features to streamline your payroll process.
Use this link to sign up for Gusto and they'll give you $100 after you run your first payroll. They even offer a 30-day free trial.
You can also learn more about Gusto by reading this previous written blog article on our site: (link to article will go here).
Key Questions You May Have About Outsourcing Your Bookkeeping and Accounting
Is It Better to Outsource Bookkeeping?
Absolutely! We always encounter a lot of mistakes and missing tax deductions when we review DIY bookkeeping. Outsourcing bookkeeping offers so many advantages, from a wonderful tax deductions on the fees, to expert services, and more money in your pocket due to no missed deductions and more time to focus on your business.
Outsourcing can provide access to experienced professionals who specialize in bookkeeping and accounting. This can enhance the accuracy and efficiency of your financial management.
Outsourcing bookkeeping is also more cost-effective than hiring an in-house bookkeeper, as it eliminates the need for additional salaries, benefits, and office space. This can be particularly beneficial for small and medium-sized practices.
What Qualifications Should the Right Bookkeeper Have?
The right bookkeeper for your business will have relevant qualifications, such as certifications from recognized accounting bodies and experience in your industry. Ask about designations and/or licenses during your search.
How Often Should I Communicate with My Bookkeeper?
Regular communication is essential. Schedule monthly or quarterly meetings to review financial reports and address any concerns. This ongoing dialogue helps keep your financial management on track.
What is the Difference Between a Bookkeeper and an Accountant?
While both handle financial records, bookkeepers focus on daily transactions and record-keeping, whereas accountants provide more comprehensive financial analysis and tax services. Understanding this distinction can help you determine which services you need. Therapeutic Tax Solutions offers both bookkeeping and accounting for therapists and dentists.
Can a Bookkeeper Help with Business Strategy?
Yes, if the bookkeeper possesses the skills, knowledge, and expertise to provide valuable insights through financial analysis, helping you make informed business decisions. Their expertise can contribute to strategic planning and long-term success.
What If My Business Grows? Can the Bookkeeper Scale Their Services?
As your practice grows, your bookkeeping needs may change. A good bookkeeping firm and bookkeeper should be able to scale their services to accommodate your growth, ensuring continued financial accuracy and support.
Hiring a bookkeeper is a critical step for therapists and dentists who want to ensure their financial records are accurate and up-to-date. At Therapeutic Tax Solutions, we specialize in providing top-notch bookkeeping, tax preparation, and tax planning services for dentists and therapists. Apply to work with us today and learn more about how we can support your financial needs.