Guide
Nine ways to tell whether your bookkeeper is doing a good job
You are paying someone monthly. Here is how to tell whether it is worth it.
Reviewed by Darren Lim, US CPALicence CPA.742536028 min read
Most contractors paying for bookkeeping have no way to judge what they are getting. The reports arrive, they look official, and the assumption is that someone who does this professionally is doing it properly.
Sometimes that is true. Often it is not, and the way people find out is a tax return that does not make sense or a bank asking questions nobody can answer.
Here are nine checks you can run yourself. None of them need an accounting background.
1. Do the books agree with your bank?
Open last month's closing bank statement. Find the closing balance. Now open your books and find the bank account balance on the same date.
They should match exactly. Not approximately.
If they do not, the account was not reconciled, and everything built on top of it — your P&L, your tax return, any decision you made — rests on numbers that do not describe reality. This is the single most important check and it takes two minutes.
2. Is there anything sitting in "Uncategorized"?
Almost every accounting package has a holding account for transactions nobody identified — "Uncategorized Expense", "Ask My Accountant", or similar.
A few items mid-month is normal. A balance that has been growing for months means someone is processing the easy transactions and quietly parking everything else.
3. Are the months actually closed?
Ask when the last month was closed, and whether prior periods are locked.
If nothing is locked, anyone can change a transaction in a period you already filed a return on. Books that move after the fact are not a record.
4. Does anyone ask you questions?
Every month there are transactions only you can identify. A cheque to a name that means nothing to the office, a large card payment, a transfer.
A bookkeeper who never asks you anything is not investigating — they are guessing, and the guesses are going somewhere.
The good version is one batch of questions a month. The bad version is silence.
5. Can you see what a job made?
Ask for a report showing profit by job, or by truck, or by route — whatever the unit is in your trade.
If the answer is that the system does not do that, what you are buying is data entry for your tax return. That is a legitimate service, but it is not the same thing as bookkeeping that helps you run the business.
6. Are your loan balances right?
Find a loan on your balance sheet. Compare it to the current statement from the lender.
If the book balance is not falling, the whole payment is being expensed instead of being split between interest and principal. That overstates your costs every month and leaves your balance sheet wrong.
This is one of the most common errors in contractor books and it is invisible unless you look for it.
7. Is your own money separated properly?
Owner draws should sit in equity, not in expenses. Personal spending that ran through the business account should be identified and reclassified, not coded to "office supplies" because it was easier.
If your draws are in expenses, your profit figure is wrong, and so is your tax return.
8. Does anything arrive on time?
Pick a date — say the fifteenth. Do last month's reports reliably arrive before it?
Bookkeeping that shows up six weeks late is history, not information. By the time you learn March had a problem, you are halfway through May and cannot do anything about it.
9. Is anyone credentialed reviewing it?
Ask directly: does a CPA review this work, and does that review cover every month or a sample?
Plenty of bookkeeping is done well without CPA involvement. But if nobody credentialed ever looks at the file, errors compound quietly until year end — and year end is the most expensive time to find them.
What to do with the answers
If most of these come back badly, you do not necessarily need to fire anyone. Often the honest conversation — "can we get the bank reconciled and the uncategorized account cleared" — fixes it.
But if you have asked before and nothing changed, comparing is easy. Have someone else do the same month independently and look at both.
That is exactly what our free first month is: your most recent month, done in full, with a CPA sign-off. If ours is not clearly better, keep what you have — and you will have learned something either way.
Related
How we do this
We build this into your books. Starting with a month that costs you nothing.
Reconciled to the statement, nothing parked in uncategorized, months closed and locked, one batch of questions a month, job-level reporting, and a US CPA signature on every file. Those nine checks are the standard we work to.
- Every transaction categorized, accounts reconciled, the month closed
- Reviewed and signed by Darren Lim, US CPA — licence CPA.74253602
- The Two-Day Guarantee: Your first month back in two days, or the next month is free.
You are already paying someone every month. Having the same period done independently costs you nothing and settles the question in one look. If theirs comes out better, keep them — you will have lost nothing and learned something. That is not a close call.