The “set it and forget it” problem

• You found a bookkeeper. You agreed on a monthly fee. The books get maintained. The reports arrive. The payments continue.
• And six months—or three years—later, you’re still paying for essentially the same arrangement.
• But has your business remained the same?

A bookkeeping engagement shouldn’t necessarily be permanent simply because the relationship is.

Business volume, complexity, technology, payroll, sales tax obligations, employees, locations, financing, and the owner’s own involvement can all change.

The question isn’t necessarily whether the bookkeeper is good or bad.

The question is whether the arrangement still fits the business.

Your Business May Have Changed

Examples:

• • Revenue increased substantially.
  • Transaction volume changed.
  • You added employees.
  • Payroll became more complicated.
  • You started accepting credit-card/POS payments.
  • You added another bank or credit-card account.
  • You began collecting sales tax in additional jurisdictions.
  • You added a rental property or another business activity.
  • You started using a third-party platform such as Square.
  • You obtained financing.
  • You began needing regular financial reports.
  • You simply became less involved in the day-to-day bookkeeping.

Point: A business can outgrow an accounting arrangement without anything being “wrong” with the original arrangement.

What Are You Actually Paying For?

• • Transaction entry
  • Bank and credit-card reconciliations
  • Accounts payable
  • Accounts receivable
  • Payroll
  • Sales/excise tax
  • Financial statements
  • Review and interpretation
  • Cleanup/catch-up
  • Communication and support
  • Year-end preparation
  • 1099 responsibilities
  • Accounting-system administration

Two businesses can pay similar monthly fees while receiving very different services. Conversely, two businesses with similar activity can reasonably have different fees because the responsibilities within their engagements are different.

Who Is Responsible for What?

What responsibility does your bookkeeper actually own—and what remains your responsibility?

For example:

• • Who reconciles the accounts?
  • Who investigates discrepancies?
  • Who reviews the financial statements?
  • Who handles sales-tax filings?
  • Who manages payroll?
  • Who monitors accounts receivable?
  • Who deals with bookkeeping problems when something doesn’t make sense?
  • Who is responsible for keeping the accounting system properly configured?

An engagement is about responsibility, not merely activity.

Has Your Bookkeeping Become More Complicated?

A business may still have roughly the same number of transactions while its accounting requirements become substantially more involved.

Conversely, a business might have thousands of transactions flowing through a POS platform but relatively little transaction-level bookkeeping activity if those transactions are properly summarized into the accounting system.

The activity happening inside your business isn’t necessarily the same thing as the accounting work required to record that activity.

Has Your Business Outgrown the Level of Oversight?

Questions:

• • Are financial statements reviewed?
  • Do you understand why revenue or expenses changed?
  • Are unusual balances being investigated?
  • Are receivables growing?
  • Are expenses drifting?
  • Is cash flow becoming an issue?
  • Can you ask your accounting professional what the numbers mean?

Has the Relationship Changed?

Sometimes the problem isn’t technical.

The business owner may find that:

• • Communication has become slower,
  • The original contact retired or changed roles,
  • The firm changed ownership,
  • Staff changed,
  • Business has grown beyond the original relationship,
  • The owner no longer knows who is actually handling the books,
  • Or the service simply doesn’t feel as accessible as it once did.

Changes in the relationship can be just as important as changes in the numbers.

The Five-Minute Bookkeeping Checkup

Ask yourself:

• • Do I know exactly what my monthly fee includes?
  • Do I know which accounting responsibilities remain mine?
  • Has my business changed since this arrangement was established?
  • Am I receiving the level of reporting and oversight I currently need?
  • If I asked why my bookkeeping costs what it does, could my accounting professional clearly explain it?
  • If my business changed tomorrow, would my current arrangement adapt with it?
  • If I needed help understanding my financial statements, who would I call?

You May Not Need to Change Bookkeepers

An evaluation doesn’t automatically mean changing providers.

Sometimes the answer is simply to modify the existing engagement.

Perhaps responsibilities need to be clarified. Perhaps services need to be added—or removed. Perhaps the current arrangement still fits perfectly well.

The important thing is knowing where you stand.

What a Free Evaluation Can Tell You

At Brickhouse Ledger & Loop, our Free Evaluation is designed to begin with understanding—not selling.

We look at the business, the accounting environment, current responsibilities, and the type of support the business actually needs.

The objective isn’t to assume that you need a different bookkeeping arrangement.

It’s to determine whether the arrangement you have—or the arrangement you may be considering—makes sense for your business.

Not sure whether your current bookkeeping arrangement still fits?