How do I know if my current bookkeeper is doing a good enough job with my financials?
Start with the basics. Are your bank accounts and credit cards reconciled every month? Reconciliation means the balances in your accounting software match your actual bank statements down to the penny. If your bookkeeper can’t confirm that reconciliations are current, that’s a fundamental problem. Unreconciled accounts mean your financial reports are unreliable, and every decision you make based on those numbers is built on guesses.
Ask for your Profit and Loss statement and your Balance Sheet. You should be receiving these monthly without having to chase anyone down. If your bookkeeper only produces reports at tax time or when you specifically request them, you’re flying blind for most of the year. Good bookkeeping gives you a clear picture of revenue, expenses, and profitability on a consistent schedule.
Look at how expenses are categorized. Open your chart of accounts or your P&L and check for oversized “Miscellaneous” or “Uncategorized” balances. A few small items landing there is normal. Thousands of dollars sitting in those categories means transactions aren’t being properly classified, which affects your tax deductions and makes it impossible to understand where your money is actually going.
Can your bookkeeper explain your numbers to you? If you ask “why was last month’s profit lower than the month before?” they should be able to walk you through it. A bookkeeper who just enters data without understanding what the numbers mean isn’t giving you much beyond data entry. You need someone who can help you actually read your financials and spot trends before they become problems.
Watch for surprises at tax time. If your CPA consistently finds errors, reclassifies large amounts, or your tax bill is drastically different from what you expected, your books probably aren’t as clean as they should be. Your tax preparer shouldn’t be doing heavy cleanup work on top of preparing your return. That means the bookkeeping wasn’t done right during the year.
Think about whether compliance items are handled. Sales tax filings, 1099s for contractors, payroll tax deadlines. If you’re the one remembering due dates and reminding your bookkeeper, the relationship isn’t working the way it should. A competent bookkeeper either handles those deadlines or clearly communicates that they’re outside the scope of work so you know to manage them yourself.
Finally, consider how proactive your bookkeeper is. Do they reach out when something looks unusual, like a big spike in expenses or a payment that doesn’t match an invoice? Or do they just process whatever comes through without questioning it? The difference between full-service bookkeeping and basic data entry is that someone is actually paying attention to your business, not just logging transactions.
If you’re reading this and realizing several of these areas feel off, you’re not alone. Many business owners don’t know what to expect from a bookkeeper because they’ve never seen what clean, well-maintained books look like. Whether you need inventory accounting in Orlando or just solid monthly reports you can trust, the standard should be the same. You should feel confident in your numbers, not uncertain about whether they’re right.
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More Questions
What bookkeeping does a medical practice need that other small businesses don't?
The biggest difference is how revenue works. Medical practices don't get paid at the point of service. They bill insurance, wait for reimbursement, track contractual adjustments, and manage patient balances, all of which require specialized accounts receivable tracking that most small businesses never deal with.
Read answerHow do I account for damaged, expired, or obsolete inventory in my books?
You remove the value from your books through a write-down or write-off. This means debiting an expense account and crediting your inventory asset account, with documentation to support the adjustment.
Read answerCan a bookkeeper fix a QuickBooks file that was set up wrong from the start?
Yes. A qualified bookkeeper can fix a QuickBooks file that was set up incorrectly. This is one of the most common issues bookkeepers deal with, and most files can be corrected without starting over from scratch.
Read answerHow do I set up a chart of accounts in QuickBooks that actually matches my business?
Start by understanding your revenue streams, major expense categories, and what financial questions you need your books to answer. Then build the chart of accounts around that reality instead of accepting the default template QuickBooks gives you.
Read answerWhat financial reports does my franchisor require and how do I set QuickBooks up to produce them?
Most franchisors require monthly or quarterly P&L statements in their specific format, weekly gross sales reports for royalty calculations, and annual financials. The key to producing these without headaches is setting up your QuickBooks chart of accounts to match the franchisor's categories from the start.
Read answerHow do I track project-based revenue and expenses as a consultant or creative agency?
Set up each project as a separate tracking category in your accounting software, then assign every invoice and direct expense to the right project. Pair that with consistent time tracking and you'll know exactly which projects and clients are actually profitable.
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