You Don't Need A Background In Accounting and Finance To Evaluate Whether Your Bookkeeper Is Meeting Your Expectations And Needs
Childcare centre Owners and Directors we work with are passionate about children and early childhood education. They are NOT passionate about accounting...and we can't blame them! Their jobs are much more inspiring than ours.
Owners and Directors need to be confident that the centre's financials are prepared accurately, recieved on time, and their records are in compliance with all regulations. In the same way that centre staff are regularly assessed and evaluated, it's important to evaluate your bookkeeper to ensure they are meeting your needs. The question is: how can you evaluate your bookkeeper's performance if you don't have a background in accounting and finance?
In this guide, we'll go through the role of a bookkeeper and some evaluation criteria you can use to assess their performance, without needing a background in accounting.
Understanding the Role of Your Bookkeeper
Bookkeeping and Financial Reporting. Fundamental task of recording daily transactions accurately, categorizing them correctly, and compiling these records into comprehensive financial reports. These reports are crucial for tracking your centre's financial health, understanding cash flows, and making informed planning decisions.
Payroll Management. Beyond processing payroll, this involves ensuring all aspects of payroll are handled correctly, including tax withholdings, benefit deductions, compliance with employment laws and CWELCC regulations.
Advisory Services. Providing valuable insights and advice on financial matters, helping you navigate financial challenges, optimize profitability and plan for the future.
For childcare centres, there's also the added critical responsibilities of CWELCC compliance and Audit preparedness:
CWELCC compliance. Ensure all government funding and reporting forms, reconciliations and reports are completed correctly, and on time. Non-compliance with reporting requirements can result in loss of funding.
Audit preparedness. Accurately preparing your financial reports, maintaining supporting documentation, and ensuring accounting guidelines are being met so that auditors can efficiently complete their audits. [It helps if you're bookkeeper is also a CPA!]
A big part of evaluating your bookkeeper is understanding their role and having appropriate expectations of what services they should be delivering for you.
In the same way that the role of childcare centre Directors has changed over the last 4 years, the role of childcare centre bookkeepers should also be expected to change.
Now that we have discussed the role of a bookkeeper and what Directors should expect, let's review some criteria you can use to assess if your bookkeeper is meeting your needs.
Key Evaluation Criteria
Timeliness. Are financial reports up-to-date and prepared in a reasonable timeframe every month to allow you (and, if applicable, the Board of Directors), to review results and ensure performance is on track? Does your bookkeeper respond to questions or requests in a timely manner (within 1-2 days)?
Communication Skills. Your bookkeeper should communicate clearly and explain financial results so you can understand how you're performing and what's behind the numbers. If there are items you don't understand, they should be happy to explain to you in plain English until you're confident with the numbers.
Use of Latest Technology. Every year, there are new tools and technologies that make accounting tasks more convenient, efficient, and paperless. Your bookkeeper should be knowledgable of the different tools available and should be able to leverage these tools to make life more efficient for you and your team, as well as easier for your Board and auditors. It all starts with having the right accounting software in place.
Knowledge of Childcare Industry. The more unique the industry, the more important it is for your bookkeeper to be an expert in your field. If you need to explain how funding works and each type of grant, it is less likely your bookkeeper will be able to accurately maintain the books. Or help you stay in compliance with government reporting requirements. Does your bookkeeper stay current with the (constantly) changing developments in childcare? Are they aware of the various reporting deadlines or do you need to remind them?
Saving You Time. If you are printing monthly bank statements and credit card statements, attaching receipts, and categorizing expenses, you are doing much of your bookkeepers job for them. They should be finding ways to save you time, not add accounting chores to your schedule.
Accuracy and Attention to Detail. Are financial reports free from errors? A good bookkeeper must maintain accurate records and should have a process for quality review. Otherwise, your auditors will need to spend more time testing accounts and identifying corrections, leading to longer and more expensive audits.
Proactiveness. Does your bookkeeper anticipate challenges or opportunities and suggest strategies for you to improve performance? Do they help prepare analysis and benchmark your performance against other similar centres to provide insights?
Sometimes it's easy to forget that your bookkeepers work for you. And you deserve a bookkeeper that meets your needs and delivers value to your centre.
Evaluating your bookkeeper is not just about ensuring the numbers add up, it's about ensuring that your needs are being met:
Are the financial reports delivered on time?
Are they communicating with you regularly and responding quickly?
Are they using the latest technology?
Do they have a deep understanding of the childcare industry?
Have they found ways to save you time?
Are the books accurate?
And do they look for ways to improve your performance?
If you have any thoughts or would like to discuss how we can help deliver value for you and your centre, please reach out! You can email us at hello@childcarecpa.ca.