Getting Off the Truck, Part V
Trust is the underlying currency of all commerce. It ranks right up there with time, which are both ahead of money. Without trust there is no business. So, it’s no wonder that many small business owners struggle with getting off the truck of doing their own books and trusting someone else to do them.
In many cases, our experience has shown that an owner attempts to bypass this important step by hiring their spouse, a relative, or a trusted friend to be their bookkeeper. While this strategy can be successful in many cases, it also comes with its own set of challenges—which is a topic for a different series!
A good starting point for an owner working toward getting off the accounting truck is to explore some of the hazards associated with not doing so.
They try to do the accounting themselves … at night or in their free time.
Many small business owners don’t have degrees in accounting, many more didn’t enjoy math while they were in school, and still more yet don’t have the level of detail required to accurately do their own bookkeeping. We have found that even those owners who do have accounting degrees prefer running their business to doing their own books.
Small business owners are much better off hiring a part-time bookkeeper or an outside bookkeeping service to handle their books until they can afford someone full-time.
They hire someone they like but who isn’t qualified.
Small business owners are usually nice people who like to do nice things for others. This includes employing them. So a niece, nephew, or friendly barista says they’re looking for a job? They’d be nice to work with, so let’s hire them! But since they usually have no understanding of bookkeeping, and the owner probably has little experience themselves, there’s no one to train them correctly. This is a scenario that rarely ends well for anyone.
They hire someone they trust (and sometimes love) but who doesn’t want the job.
Yep, here we’re talking about an owner’s spouse, another family member, or a trusted friend. While their desire to work with family members is noble and can be rewarding, it can also place strains on otherwise healthy and happy relationships. Plus, as the company continues to grow and its needs exceed the accounting skills of the loved one doing the books, this can lead to a very uncomfortable conversation for both sides.
They hire someone who knows less than they do about organizing financial reports and creating accuracy in the books.
As mentioned above, business is all about trust, but trust in the correct, skilled person. There are options for a business owner to verify that their bookkeeping is done correctly, like hiring a CPA to oversee the monthly accounting functions. Hiring a low-skilled person creates more problems than trusting a person of high skill and verifying their work. In a healthy business there are financial controls in place to ensure that all income and expenses are accounted for.
Once the size of the company has grown to where its needs dictate hiring an experienced accountant or bookkeeper, an owner often makes the mistake of hiring one of the above employees or someone else who is not qualified to handle the volume and responsibility that bookkeeping in the trades requires. Many owners also find that they are uncomfortable making this hire.
The place to start is likely the same place they started with their other hires—by asking people they know for recommendations. If they already went the route of starting with an outside accounting firm, the firm may know someone they could recommend. If this effort is unsuccessful, they could then network with other community business owners with similar companies, asking if they have a recommendation and how they navigated this hire for their business.
The key will be to find someone the owner can trust. Do they trust that the person is competent to manage the finances of a company their size and in a similar industry? Do they trust that the person has the personal integrity to always act ethically and legally? Do they trust that the person will always place the company’s interests ahead of their own? And can the candidate convey a message in plain English (or in the native tongue of the owner), rather than losing or intimidating them with accountant-speak?
Naturally, building trust is rarely accomplished in one quick interview. Instead, multiple opportunities to spend time with candidates during the hiring process should be planned before the decision is made. And while the importance of the qualities mentioned above are critical, an owner shouldn’t overlook the importance of actually enjoying spending time with the person they hire.
While this truck can be a little harder to get off than some of the others, it’s one that pays huge dividends. The right hire can keep a small business owner and their company on track for continued growth and success.
