How do I know my financials are SECURE with a Remote Bookkeeper

How do I know I’m not losing DATA INTEGRITY with a Remote Bookkeeper

How do I trust a Remote Bookkeeper when they have no OVERSIGHT, and I don’t know accounting

If I don’t have the ability to VERIFY the Remote Bookkeeper’s work, how do I know if they are doing it right

Is the Remote Bookkeeper OUTSOURCING the work to India, the Philippines, Africa, the Middle East……..

When you’re hiring a Remote Bookkeeper these are important questions to ask, so here it goes.

The annoying thing about ANY bookkeeper is that you have no fool-proof way to confirm your financials are SECURE. Whether it’s an on-site bookkeeper, a Remote Bookkeeper, or even a CPA, there are risks you take when you hire. They might not have integrity themselves. They may not understand what information is sensitive and should be protected. They might not see the value in even thinking about it because they don’t think anything could ever happen to them. Here’s where we can give you a little advice. ASK. Ask if they have a Browser Guard to protect your data, logins, etc. Since 99% of accounting systems are now cloud-based, this is important. Some people, even IT professionals, think that just because they have security on their computer that they are protected. That is NOT the case. The computer might be protected from breach, but your information isn’t. You need to make sure their internet activity is specifically protected. You don’t want to know what can happen if it’s not.

Another amazing (not so much) thing about ANY bookkeeper, especially those that take shortcuts, is that you can’t be sure they are recording everything with enough detail or with accuracy. This must happen if you want to capture complete data and maintain the DATA INTEGRITY of your financial records. If you are missing things, seeing entries that don’t have notes, seeing bulk entries to record things that should be itemized out, this is a red flag. Unfortunately, a lot of professionals in this industry are quick to take shortcuts to ensure their own profit margins are as high as possible. Here’s the thing, let’s say you have been in business for years. Whether you are still in the business or continuing in the business, you have an audit risk. In an audit you will be asked to provide details on specific transactions. If you cannot provide details on any transaction, they will ask for 5 more for every 1 you can’t validate. For an audit to be less risky and as quick as possible, you need as much of your data as possible in one spot. This would be your accounting system. Your master record keeping center. You likely have multiple systems processing different things. Tracking inventory, purchasing, selling, processing payments, invoicing, and a ton of other examples. Can you imagine how long it would take to find all of the information they are asking for on one transaction when that transaction has hit multiple software accounts? Even if it’s easy to just grab it really quick, audits are high-volume. You might have to go into 5 systems for one audit request. On top of all of that, what if you lost access to a system and/or they no longer retained your information? Now you just don’t have what you need. Ask them what kind of information they need to pull into the accounting system to make sure you have all of the details you need. If they aren’t sure, or if they say it’s whatever YOU want, that’s a red flag. You need to make sure they know what details are pertinent. What apps will need to be connected to pull in all of the data without having to do them one-by-one. They need to know how and when to do one-by-one entries if there are no apps available to pull them in. Ask them what they need from you AND what they are going to be doing FOR you. If they are just doing your bank reconciliations or adding expenses when you send them, that’s not a great setup unless that’s all you want. And honestly, that shouldn’t be all you want. You want a thorough capturing of your business. That’s your data integrity.

Alright, so no. They likely won’t have any OVERSIGHT but that doesn’t mean you can’t tell when they might be doing something shady. All you really have to do is make sure you are paying attention to the money and the reports. There are two reports you need to be concerned with. The Income Statement (Profit & Loss) and the Balance Sheet. Look out for an increase in expenses that you’re not familiar with. Extra office supplies that you haven’t seen come into the office. Expense reimbursements for ANYONE should be reviewed and approved by you or by a higher-up member of the organization that reports to you and explains everything. An increase in payroll or contractor expenses that should never have changed. On the Balance Sheet you might see new liabilities that shouldn’t be there. Maybe a loan that doesn’t exist, a new misc. payable account, etc. An extra layer is to pull an Accounts Payable Aging Summary and see if there are new vendors you are unfamiliar with. Between AP and your Bank or Credit Card accounts, make sure you review them each month to make sure the charges are familiar and acceptable. Look at checks that come through your bank account and make sure the check numbers don’t skip. If there is a skip in check numbers, make sure it’s not just a delay in a vendor cashing it. Pay attention to people that are saying they never received a payment when you show it clearly coming out of your account. There are so many things that can happen in this area but again, as long as you are paying attention and asking questions, you should be okay.

On to the next. As a business owner you may not be able to VERIFY their work. That’s when you do a couple things. The first thing is something you can do yourself, even without knowing accounting. Look at the reports just like you would do when you are focusing on OVERSIGHT. Make sure it makes sense. Here are a few tips on what things SHOULD look like. If you are on Accrual Basis, it may be confusing when you look at your P&L because your sales showing in your POS will not match the revenue on the P&L unless they are paid and fulfilled immediately. As an example, if your customer pays on 7/25 and also receives a product or one-time service immediately, then you should see it immediately reflected on your P&L. If they pay on 7/25 and don’t receive a product or service until 8/4, that should not show up in Revenue. If you provide a month-long service, the revenue will show up in July or August. Don’t question it unless it doesn’t hit revenue at all. If you are on Cash Basis, everything should show up as soon as the cash transaction happens. Then, if there is anything new on the Balance Sheet or P&L that you don’t recognize, just ask. If it’s legitimate it won’t be difficult to get an answer. Keep in mind, mistakes happen all the time in accounting. It’s a field that’s high volume and sometimes things can slip through the cracks even in low-volume accounts. The last thing to VERIFY their work, is simply have a third-party, unrelated, accounting professional take a look. This could be a CPA or an Auditor but also keep in mind that these professionals are also competitive and can blow things out of proportion just to steal you as a client. Whatever they bring up, look into it. Ask them for details on why it would be inaccurate, then ask your bookkeeper questions in these areas without indication anyone else told you they were wrong. When you ask, they may actually realize they made a mistake and fix it. As long as the mistakes aren’t ongoing, consistent, and they can explain the logic, you have a non-issue. Just to be safe though, make sure they have E&O Insurance. This is insurance for Errors and Omissions and is standard in accounting. This covers at least some of the financial impact you may have as a result of an error or a misunderstanding of an accounting process resulting in error(s).

And now we come to the last but one of the most important factors. Are they OUTSOURCING the work to another company or country. There are many firms or bookkeepers, including CPAs, that outsource the bookkeeping work to another entity or country. These outsourced services are a huge risk to your company. We’ve checked it out and it’s not good. Most of them promise the moon only to butcher the books. They say they know U.S. Accounting when they actually don’t. They will do things that they think are accurate but shouldn’t ever happen under U.S. GAAP (United States Generally Accepted Accounting Principles). Some firm owners don’t even know how to DO accounting, let alone confirm the accuracy of these outsourcing companies. Make sure you ask and this stipulation is in the service contract. Something that states the service provider will not outsource services to a company or country that hasn’t been approved by you, the owner. They will likely have internal help. Contractors or employees working under them, that’s normal.

One thing is imperative for all contractors that work for you. LIABILITY INSURANCE. For accounting contractors specifically this is E&O Insurance. It’s also a plus for them to have cyber coverage. For accounting professionals this typically covers any errors or items they forget to include in your financial system that impact financial reporting and data, in the event you are impacted by them in those areas. This also covers if there is ever a breach on their side related to internet browsing or working. Most policies also cover subcontractors for their business or firm. It’s not standard to ask a bookkeeper or firm for information on their contractors or employees so please don’t be surprised if that’s not something they will do. Now, as far as we are concerned, all of these concerns are covered.

What about us? Well, thank you for asking! 😉

You can trust your financials are SECURE because everyone working in, or with, Avid Financial Firm has coverage for errors and omissions, cyber-attacks, and are all required to have active browser guards for extra security. We LOVE Malwarebytes for our Browser Guard. We don’t get any commissions for promoting this company.

We take steps to ensure careful and thought-out processes are in place to ensure your DATA INTEGRITY is intact and complete in the most comprehensive manner possible. We don’t do blanket/bulk entries unless there is no alternative and if there is no alternative, we attach backup on the entries and amazing notes to accurately reflect their purpose.

You might not have the ability to provide OVERSIGHT but we do. We only ask for pertinent details, access, and logins. We don’t even WANT access to move your money, and we would prefer you didn’t want to give us access to that ability either. We don’t want to print your checks. [We don’t actually want you to use checks at all.] We don’t want to have wiring or payment processing abilities. We don’t want to have direct access to pay your vendors. We want to assist you and/or your team in making sure you have everything you need so that you can push that final button. This isn’t because we don’t trust ourselves, it’s because we need to know that you are comfortable with every transaction that moves YOUR money. And let’s be frank. This is all online and is technically at risk even if it’s covered. No one wants to have to deal with a breach, it’s incredibly stressful and a long process for everyone. This is an extremely sensitive industry, and we know that it’s easy for something to go awry. That’s not going to be because of us.

You can hire anyone you want to VERIFY our work. We have a ton of experience in providing detail, reports, and other important information for validation of your financials. But if you don’t want to, or can’t, we have layers of internal verification and review processes in place to make sure you are taken care of at all times. Don’t believe us? We are always available to answer your questions. Fire away. In addition, Kay has created the Bookkeeping Mastery Course for Freelance Bookkeepers everywhere in the U.S. She created this resource from a compilation of experience and education over her 18 years of corporate work in various industries. The bookkeepers working with her have all completed her course and still have it, and her, as resources on-hand to ensure accuracy. You wouldn’t be getting the average bookkeepers, you would be getting the cream of the crop.

We have looked into OUTSOURCING, of course we have. And NO, we absolutely will not outsource this work. All work is done in-house and no one else has access to your data. We don’t trust OUTSOURCING and for good reason. We don’t need to get into the details, but I am sure you can deduce some of the logic here.

And as an honorable mention, ARITIFICIAL INTELLIGENCE is useful, but we don’t trust it yet. I know it’s a huge deal right now and everyone thinks they can have AI do everything, but every time we have seen AI at work in accounting, it’s been a disaster. If we use anything, we use programmable systems that do ONLY what we need them to do and nothing else. They don’t think for us, we don’t let them.

Avid Financial Firm has several trustworthy bookkeepers taking care of our carefully selected clients. Kay Diouf is the owner and leave Accounting Consultant behind the madness. If you want to work with someone that knows how to put your best interest first, BOOK A FREE CONSULTATION HERE.