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5 Guidelines For Hiring The Right Bookkeeper
No matter how assured you feel about doing your record-keeping DIY-style, it’s still worth the money to hire a bookkeeper to systemize your accounts.
Or maybe you are someone who have the know-how to record transactions and the meticulous nature to formalize your books. But just like many other business owners, you simply hate the job of bookkeeping.
What’s worse. It can be such a time-consuming tasks that you are forced to neglect other essential aspects of being a landlord.
In most cases, unless you are a part time property investor or yet to get serious in real estate, hiring someone to keep your internal accounts in proper order will be a bargain that will pay off ten-fold in future.
Here are some guidelines to follow when searching for the right bookkeeper that will help alleviate your stress instead of adding onto your burden.
1) Experience in real estate
When it comes to accounting, different business handle different items differently.
A good example is that a vehicle can be an expense incurred for delivery of goods and products. But to a car rental company, they are considered as assets.
Real estate is a unique type of business that is different to most common types of businesses we are familiar with.
They are still fundamentally the same income-generating entities as most companies. But the methodology of record keeping can be very different.
This is why, unless you are ready to spend time babysitting the new hire, it is best to hire a bookkeeper who has experience in real estate.
For example, an experienced real estate bookkeeper would already know how to compute and allocate expenses like depreciation and insurance for different properties.
2) Confide in your tax advisor
It is important to distinguish the difference between a tax advisor and bookkeeper.
A tax advisor is a professional who provides advice on tax filing issues and often times also offer the service of filing your accounts to the IRS in the required format.
A bookkeeper is someone who keeps records of all your transactions so that you have a clear picture of how the company is doing financially.
While bookkeeper can tabulate the records and present all information in a formal structure, this set of account is often referred to as the management accounts. It is often meant for internal use only.
And usually, if you get a tax advisor or CPA to file your taxes, what they would require are the set of records kept by the bookkeeper.
This shows that the tax advisor and bookkeeper have crucial roles that are dependent on each other’s ability.
Therefore, asking your tax advisor for recommendations could actually make the recruitment process so much easier.
3) Reference checks
If there’s one job position that you must absolutely make reference checks, it is the bookkeeper. Or anyone who handles accounting in any form as the main jobscope.
This is because a staff handling record-keeping must be trustworthy, reliable, and competent. There’s no two ways around this.
You don’t want a bookkeeper who is creative. That can present a whole new set of problems.
Because we cannot know for sure the personal traits of a new hire from a simple interview, calling up a previous employers might give you acute insight into the dependability of the potential new employee.
4) Part-time or full-time employee?
There are pros and cons of hiring both part-time and full-time employees.
Part-timers will obviously be cheaper. But you compromise control and dependability.
They can simply refuse to show up the following week and throw your operations into chaos.
Full-timers are of course the preferred option. But are you ready to offer a full-time income with benefits and employment perks.
And what if you end up hiring an incompetent bookkeeper?
In both cases, do check the employment laws in your local area to avoid running afoul of the law.
5) Check with the management company
Among the many diverse roles a property management company takes on, bookkeeping is one that is less talked about in the real estate industry.
Property management companies are essentially real estate service hubs that offer everything from brokering to plumbing.
They basically provide every service you can think of to serve a landlord.
In fact, if you have a house for rent, they would like no more than to take everything off your plate and just send you rental balances at the end of each month.
The problem is that landlords, especially newer ones will find their services expensive and unable to see the value they bring onto the table.
Also. They might not be experts at bookkeeping.
Anyway, it doesn’t hurt to request for a quote for their bookkeeping services if you are on the market for a bookkeeper.
Finally, it is also important to get a person you are comfortable with.
This is because you can expect yourself to hit your bookkeeper with a barrage of questions about numbers and specificity.
People can sometimes feel threatened by this behavior and fail to respond in the manner you had hoped for.
That is the last thing you need from a bookkeeper.