Bookkeeping: Avoiding Sticker Shock

By Patrick Bonnaure, founder of ProLedge Bookkeeping Services

When you hire a new bookkeeper, wouldn’t it be nice if you could start very slowly, dip a toe in the water, see if you like the work that your bookkeeper does and then progressively accelerate the pace of the work? Unfortunately, this is seldom practical as there usually is a backlog of work that needs to be caught up in short order. So, how do you protect yourself from sticker shock?

Finding a bookkeeper or a bookkeeping firm that you like is not an easy task. It seldom happens in a matter of days. Typically, by the time you selected and engaged the bookkeeper of your choice, the books have fallen behind and there is a lot of catch up work to do. Also, in many cases, one of the reasons you were looking for a new bookkeeper might be that the person in charge of the books before might not have done a very good job. So, not only there is a backlog of work, but there might also be some cleanup required.

All this conspires to flip your relationship with your bookkeeper on its head. Ideally, the first few weeks/months of work should be about your bookkeeper getting familiar with your business and you gaining confidence in your bookkeeper. You’d like to go on a slow jog to warm up before you start running all out. Unfortunately, most bookkeeping relationships start with a sprint: a heavy workload upfront under tight time constraints. If this is not done carefully, costs can creep up and the first invoice you will get from your bookkeeper will take you by surprise. How can you minimize this risk of sticker shock?

Ask for estimates

The task of a bookkeeper at the beginning of a relationship is a lot like peeling an onion. The bookkeeper won’t know what she doesn’t know until she dives into the details. Estimates are difficult to develop, but  they are a necessary part of the process. The best approach is to allow the bookkeeper to refine the estimate as the work progresses. If you call a bookkeeper and ask for an estimate on the first call, without giving a chance for the bookkeeper to look at your QuickBooks files, your bank and credit card statements, your invoices and your bills, assume that this estimate will be very unreliable. As the bookkeeper gets more concrete information in hand, the estimates can become more accurate.

Break the work into discrete phases and review the work at each milestone

If you have a big backlog of work, don’t tell your bookkeeper: “Go ahead. Catch me up. Call me when it’s done”. This is a recipe for surprises, sticker shocks and inaccurate books. A better approach is to agree with the bookkeeper to catch you up with a month’s worth of data and stop. At that point, the bookkeeper will have a list of questions that you can help clarify. It’s also the right time for you to pass the books by your CPA and ask to check if the work is done to his/her expectations. You don’t want your bookkeeper to go in the wrong direction for a long time, because the later you find out about the disconnect, the more expensive the adjustments will be after the fact. Your bookkeeper may have the best intentions in the world, but if she was assuming  that you wanted the train to go on Track A whereas you or your CPA wanted her to go on Track B, let’s not wait until the train arrived in the wrong town to find out about the disconnect.

Ask for frequent invoices

Receiving invoices from your bookkeeper is not necessarily the most pleasant part of the relationship, but invoices are critical for your to understand what is going on. Since the beginning of your relationship is likely to be the most expensive one because of the backlog and cleanup work, don’t wait a month to request the first  invoice. By then, it might be too late. You might discover that there was a large disconnect between you and your bookkeeper. Until you’ve reached a steady state, it might not be a bad idea to ask for weekly invoices. It gives you more real time visibility into your costs.

Most reasonable bookkeepers would tell you that, given a choice, they would prefer to start a relationship with a new client slowly and to progressively build a trusted relationship. Unfortunately, it is the nature of bookkeeping that the initial phases are often the most rushed and therefore the most prone to tensions and misunderstandings. If both parties are aware of this upfront and actively try to mitigate these risks of misunderstandings, it is already a huge step forward.


  • Bjorn Button says:

    Thanks for the helpful information. When you are using outsourced bookkeeping services, be sure to have a paper trail of everything that is being done for you.Accounting firms just get so busy, they may lose track of the work and bill you for things that may have yet to be done. Its your money, so watch how it is spent.

  • 22-06-12

    What a great article. It articulated so well what I’ve been explaining to new clients. Many times clients will want an estimate before I’ve even had a chance to review their situation. This was very well said. Thank you for sharing.

  • Majeed says:

    Hi Janet,This is good advice. Also searapting income & expense items by month is very helpful, especially if a whole year’s worth of paperwork is submitted at once. Cheque stubs are very helpful and copies of all bank statements and credit card statements. I am just processing a year’s worth of work for a client and the more organized the papaer, the less time spent and the less charged for services. If the client remits their own GST and payroll deductions, remittance copies are vital and also a breakdown of payroll deductions.Keep up the good work!Erika Sabo

  • 22-06-12

    We are a outsourced bookkeeping firm. We give the client a 100% money-back guarantee if they are not 100% satisfied. In addition, if the client feels we are charging for too many hours, we would accept the client’s estimate of what is fair. Then we will work with the client to reduce the processing time. It has worked well for us.

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