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You can get an idea of an accountant's level of skill by looking at their experience and qualifications. But how can you tell if they can be trusted with your sensitive financial information?
You can always ask business colleagues and acquaintances if they know a good bookkeeper and hope you get a personal recommendation. But what other options do you have? Below are the factors you should consider when making this crucial business decision.
A qualification is not a necessity for someone to be a dependable bookkeeper. However, a minimum 1 year bookkeeping diploma or equivalent is a good starting point when differentiating between candidates. Having some sort of qualification (e.g. BComm.) is beneficial in that the bookkeeper will more likely be able to handle non-routine accounting issues.
If you are looking for someone to run your entire financial department and take control of all financial issues, you should be looking to hire someone with a CA (Chartered Accountant) qualification.
Any experience is a plus, but the bookkeeper you hire must have experience of your type of business. Experience in only one type of business (e.g. services) will cause difficulty when adjusting to a different type of business (e.g. manufacturing).
Knowledge of your accounting-software system (e.g. Pastel or Quickbooks) is beneficial, since business owners often do not have the time or knowledge to train a bookkeeper about accounting systems.
If hiring a Chartered Accountant (CA), they will have at least 3 years of experience through doing their articles at an auditing firm and therefore should have gained some valuable knowledge of different accounting systems.
3. Reputation and reference
Their reputation can be a good gauge of whether they are reliable. However, the difficulty is that many bookkeepers operate solely, and can move from business to business with no brand and ethical code of conduct to adhere to.
Don’t be afraid to ask for testimonials. Your bookkeeper should be very open to you requesting a reference. This way you are able to see what level of service you will be receiving directly from their clients, instead of only having to take their word.
Many bookkeepers may leave you in the lurch when they go away on holiday or unexpectedly fall ill. For this reason, it is advisable to investigate the reliability of the bookkeeper from their previous clients or employers.
If your bookkeeper is regulated by a governing industry body, it will go a long way to ensure that they adhere to a code of ethics. For a bookkeeper, look out for membership of a body such as the Institute of Certified Bookkeepers (ICB).
For accountants - to legally sign-off financial statements for Pty’s - they need to be a member of SAICA (South African Institute of Chartered Accountants) and a member of the PAAB (Public Accountants and Auditors Board). When hiring a bookkeeper or accountant, ask them for their membership numbers to these professional associations. You can then do your own follow up to ensure that these memberships are valid.
You should expect to pay R10,000 per month for a relatively young, inexperienced full-time bookkeeper and between R12,000 to R15,000 for one with more experience and a good reputation. Hiring a full-time Chartered Accountant (CA) to work in your business should cost approximately R30,000 per month for a newly qualified CA, while experienced CAs ask at least R55,000 per month.
7. Other options
Many business owners with small or medium-sized businesses outsource their bookkeeping and accounting requirements to expert bookkeepers and Chartered Accountants. Such outsourced-accounting service providers often charge an affordable rate, and take more care in upholding their reputation for reliability.
This might be the best option for a business owner with an early-stage business - your monthly accounts are up to date and in order, and experts are on hand for financial accounting guidance when you require it. What is for certain is that the difficulty in selecting the right people to look after your financials is taken care of.
The content in this article was provided by Aurik Business Accelerator.
About Aurik Business Accelerator:
Founded by Pavlo and Carien, a team of more than 50 people are passionately committed to building growing businesses – one entrepreneur at a time. Aurik was born in 2000 from a genesis of starting, investing and building business into Assets of Value. We started, built and sold 12 businesses over 8 years. The last handful of businesses only required 35% of the money and 45% of the time to get to the same value as the first handful of businesses. This led to our insight of how to rapidly start, build and grow a business. Most importantly, this led to the methodology that we use today to build any business into an Asset of Value.
Aurik means a trivalent gold compound. Trivalency is the combination of three things to create gold, the symbol of value. We create value by combining three things: people, ideas and action. This is the stuff that builds entrepreneurial businesses, drives innovation and creates Assets of Value.
Every day we work with the hardest working, most committed, most creative, passionate, innovative people. They are called entrepreneurs. We believe entrepreneurship is an attitude that sees opportunity in problems, abundance over scarcity and action as the agent of change building wealth and economy for all. This ethos underpins our value system and obsession.
For more information, contact:
Tel: 011 447 5575
Contact form: http://www.aurik.co.za/contact