Are you interested in hiring a virtual assistant to handle the bookkeeping for your small business? While working with an outsourced bookkeeper gives you the freedom to focus your attention on other aspects of your business, there are some common pitfalls you need to avoid in order to stay informed about your current financial status. In episode #79, Elizabeth Larkin and Gene Marks discuss the most effective strategies for working with a bookkeeper.

Executive Summary

0:40—Question: What should I not do when I’m hiring a virtual assistant to act as a bookkeeper?

1:20—Don’t disengage; maintain frequent and open communication with your bookkeeper.

4:35—Your bookkeeper should be sending you weekly flash reports that outline the payables, revenues and backlog of your finances.

6:07—Don’t be afraid of expanding your bookkeeper’s duties to include other responsibilities, such as gathering sales and social media statistics for your flash report.

8:08— The biggest mistake you can make as a small business owner is not supervising or checking up on your bookkeeper.

10:21—Gene explains the benefits of the Okushin system, which allows business owners to monitor the mental well-being of their employees.


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Elizabeth: Welcome back to the Small Biz Ahead Podcast. I’m Elizabeth Larkin-

Gene: I’m Gene Marks. Hello, Elizabeth.

Elizabeth: Thanks for jumping in there. I was going to introduce you, but-

Gene: No, no, no. We have to change it up a little bit-

Elizabeth: Yeah, we do.

Gene: You have to be like, I’m Elizabeth. I’m Gene. Welcome to-

Elizabeth: Woo-hoo. Yes. And a little theme music. Okay, today we’re going to get right into our first question, and this one was sent in specifically for Gene, and it’s about one of your favorite topics.

Gene: It is?

Elizabeth: It was sent in anonymously, and here’s the question.

“Hi Gene. I’m a new business owner.”

Like I said, it was sent to you personally. And we love that.

Gene: I do like that.


“I’m a new business owner and I’m hoping you can help me troubleshoot. I am considering hiring a virtual assistant to help me handle my bookkeeping. What should I not do?”

I like that question.

Gene: What should I not do when I’m hiring a virtual assistant.

Elizabeth: To handle bookkeeping.

Gene: For starters, I can tell you this, Elizabeth. You don’t want to not pay attention to what the personal assistant is doing. Does that make sense? A lot of double negatives there.

Elizabeth: Yeah.

Gene: What that means is is that a lot of my clients, when they hire a bookkeeper, they basically just outsource everything to them. They wipe their hands and they just walk away. Oh well, my bookkeeper’s taking care of all that. My bookkeeper’s whatever. When you’re working with an outside person, whether it’s a bookkeeper or anybody else, it’s outsourced. But in this case, bookkeepers, you want to make sure that you are speaking frequently to this bookkeeper. You’re getting certain information from the bookkeeper.

Elizabeth: What is frequently?

Gene: Oh, if this is a bookkeeper from your business, I speak an email to my accounting manager, who essentially does most of my bookkeeping, once, twice, three times a week. That much. It depends on your volume. I get reports from her once a week, both on chargeability of hours and what we call a flash report that has certain metrics, such as cash and revenues to date, and I’m looking at that stuff, and then once a month, she sends me a detailed general ledger, which is all the transactions flowing through my books and I literally print it out. We’re a small company, so it’s 25, 30 pages, and I sit there and I read through it. I page through it and I look at all the transactions that went through my books during the month, and I circle anything that was sort of raising questions to me or whatnot, and then talk about it or email with those questions.

I guess my point is, though, is that if you’re going to outsource your bookkeeping to a personal assistant, whoever that is, you want to make sure that you are staying on top of your books. You’re not wiping your hands clean. Don’t disengage from your accounting.

Elizabeth: You have said before in podcasts you’re crazy to do your own payroll. You’re crazy to do your own taxes. Would you put bookkeeping in that category-

Gene: Yes. Yeah. You’re crazy to do your own bookkeeping. I think you’re crazy to do your own landscaping, personally. I notice people they’re out the mowing their lawns all day and whatever. First of all, you’re going to get hurt. Your mower is going to run over your foot. You have better things to do with your time. Now different people have different opinions. A lot of people are more DIY-type people, and some people really enjoy doing certain stuff, so that’s fine. But I don’t know anybody who enjoys doing bookkeeping or payroll. Some people actually like to mow their lawn. It’s therapeutic. They’re into it or whatever. It’s time away from the family. They can zone out and whatever.

Elizabeth: Get a little sun.

Gene: Get a little sun, whatever. But bookkeeping, that’s pretty much unarguably everybody hates that.

Elizabeth: Also, I just want to pause you for a second. Gene lives in an apartment.

Gene: Yeah, that’s true. But I lived in a house for 30 years, 25 years before that.

Elizabeth: And you never mowed the lawn yourself?

Gene: No, we had a landscaping company that just came and did it and it was because I’d rather … I had better things to do with my time.

Elizabeth: Spend time making money.

Gene: Yeah, and my business is an outsourced business. We provide technology services so we do stuff that … a lot of our clients could be doing this stuff on their own when they hire us, but they choose to have us do it because we just do a better job and they have other things to do with their time. Same thing with bookkeeping. If you’re looking for that personal assistant to do your bookkeeping … first of all, you absolutely should be. You shouldn’t be doing it yourself, but you do have to still stay engaged.

Elizabeth: Okay. Let’s say you’re just starting out, like this new business owner is, anonymous, what is the first report that you ask for from your bookkeeper?

Gene: First of all, I’m not a big fan of monthly financial statements. I am a fan in the sense that I think they’re important to look at, monthly or quarterly, but by the time you see something on a financial statement, it’s history. You asked about the first report that I want to get. It’s a flash report.

Elizabeth: What is that? What does that mean to you?

Gene: The flash report is, for some of my clients is daily, depending on their volume. Other people, it’s weekly. For me it’s weekly. And it should have some key numbers on it that you’re using to just run the business, to put your thumb on the pulse of what your business is doing.

Every business is different. It depends on the type of business that you’re in, but there are some numbers that are consistent among them all. You want to know what your cash is. If it’s once a week, I want to know what my cash balance is at the end of each week. You want to know what your receivables are. You want to know what your payables are. I think you should be knowing what your revenues are month-to-date and year-to-date. That’s very, very important. A lot of people check their payroll dollars month-to-date and year-to-date, as well. Then some people like to go into more of what’s my backlog. Some people like to have social media statistics, because that’s important to them, or how many leads they got in this week. Now we’re getting into other things.

Elizabeth: Wait. How much they’re spending on-

Gene: No. Social media, it’s like I’d like to know how many Twitter followers or Facebook likes I have on every Friday, how that’s going.

Elizabeth: And your bookkeeper would do that?

Gene: And that’s a great question that you just asked. Because remember, you brought this up saying I was thinking of hiring a personal assistant to do my bookkeeping and whatever. Don’t be afraid to ask your bookkeeper to gather non-bookkeeping information-

Elizabeth: Because they’re good at Excel?

Gene: Yeah. They’re good at Excel, and is it that hard for them to look up your Facebook. Is it that hard? If you want to know what the backlog is and your sales manager is the one that’s sort of tracking that on a separate spreadsheet. Okay, so when you bookkeeper calls up or emails the sales manager, hey, what’s our backlog so I can put it on-

Elizabeth: And the bookkeeper, what other vendors are they … they’re touching. They’re touching your payroll service.

Gene: It depends. They may not be touching payroll because, well, your payroll is … your payroll, they might be calling it in for you. You might have an HR person or an office manager that does the payroll. Your bookkeeper may be doing your invoicing or maybe not be doing your invoicing. It depends. Maybe your sales people are doing the invoicing, which I don’t recommend, by the way. Your bookkeeper is checking all of your cash that’s going through your accounts and it’s supervising the reconciliations.

Elizabeth: They’re in a position … they’re working with a lot of different people, so they’re in a position to gather all of these stats.

Gene: 100%. 100%. Ultimately your bookkeeper’s responsibility is to make sure that your books are complete and accurate. Whatever transactions are affecting your financial statements, that’s your bookkeeper’s job to make they get in there. Might be coming from different resources. When you then ask that bookkeeper to provide you that flash report once a week, that will certainly involve some numbers off your books, your accounting system. But then some operational numbers that might not … like a sales backlog has not been recorded in your accounting system yet, but it’s a number and it’s an important number. You say to the bookkeeper get that number and put it on my flash reports. And that’s what we do. That’s the role that bookkeeper should be playing.

I think the original question by anonymous who … it’s creepy. Isn’t that right, because now I’m going to be hacked because that’s the anonymous that it is.

Elizabeth: That’s okay.

Gene: The original question was what should I be looking for. What is the biggest mistake that could be made. The biggest mistake is not supervising your bookkeeper and not checking up on them.

Elizabeth: Also, I think you talked in a previous podcast how you got caught off-guard with numbers once. They’re doing the report for you. They might not say to you, “Hey, Gene. Check your bank bill.”

Gene: You know, it’s funny that you would say that, as well. You don’t want to have over expectations, but yeah, my bookkeeper … I was not paying attention to my numbers the way I should, and apparently it was she at the time, because then one day I was like, “Oh my goodness. We’re really down in cash.” I told you that story. This was years ago. I was like, “Why didn’t she tell me that.” You can’t expect miracles from a bookkeeper. It’s a bookkeeper. Like I said, their job is to just make sure the numbers are complete and accurate. If you want an analysis and recommendations and reviews, then you want an accounting manager or control-

Elizabeth: Yeah.

Gene: Because it’s a little bit different.

Elizabeth: Which most small businesses really can’t afford.

Gene: Yeah. It depends on the size of the company. So generally, if your business is usually more than 10 to 20 employees, then you’re usually hiring somebody in-house to be your accounting manager. Then when you hit more than 50, 60 employees, that’s usually controller time.

Elizabeth: Alright. Anonymous, I hope that helps.

Gene: Yeah, anonymous. Let us know your feedback, anonymous, and don’t hack me, please.

Elizabeth: And also, if you could leave us some comments. Once we post this podcast, you can leave a comment at the bottom. Let us know what do you ask your bookkeeper for, because I think everyone’s different.

Gene: Yeah, I agree. That’s great.

Elizabeth: And I think that would probably help this new business owner in figuring out maybe what he or she should be asking for.

Gene: By the way, just before we leave the topic of bookkeepers, I pay my bookkeeper by the hour, and I pay her 30 bucks an hour.

Elizabeth: That’s great.

Gene: Just as a sort of a benchmark. You get what you pay for. I think 30 … she seems very happy with that.

Elizabeth: Alright. We’ll be right back with Gene’s Word of Brilliance.

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Elizabeth: Alright, we’re back with Gene’s Word of Brilliance.

Gene: The Word of Brilliance that I have today is it’s two words and it’s mentally-challenged. This is serious. Not kidding around here. But I came across a company that … it’s a Japanese company that has developed a really cool software that I think would be of interest to a lot of business owners, both large and small. The name of the company is called Okushin, O-K-U-S-H-I-N. It’s Okushin System. No S on the end. Just Okushin System.

There was an article I saw in Japan Today, and what they’ve developed is a software. It’s called SPIS. I don’t know what that stands for. S-P-I-S. It’s designed for companies that employee people that have mental disabilities or emotional challenges to help them-

Elizabeth: That’s pretty much everyone that has emotional challenges, right?

Gene: Yeah, it’s a real … but these are the sort of people that are diagnosed and are working with these issues, and the software is designed to help them be more productive and be better employees, and for employers to use them as sort of … if you’re listening to this, and you’ve got somebody that might have some emotional anxiety issues, things like that. You’re aware of them. What this software does is it’s installed onto their device, usually their laptop or the PC or their MacBook or whatever.

At regular times during the day, it literally interrupts what they’re doing and asks the person some questions. How are you feeling? Are you feeling tired? On a scale of one to four, do you feel angry right now? Can you determine this letter, this color? I don’t what to ask you …

Elizabeth: What’s your scale of one to four?

Gene: Four. You only got a four? It asks these questions of the employee, in quickly, maybe five or 10 questions, and they answer. The answers are immediately tabulated and then the results are sent to the employee’s supervisor and can also be sent to any outside-

Elizabeth: I’m sorry. That’s creepy.

Gene: Well, you might say that, but the idea there is that if the supervisor is trying to keep an eye … if somebody is feeling anxious or they are feeling angry or they’re … they’re answering questions that would might raise an alarm or whatever. The supervisor can intervene and say, “Hey, you know what? Maybe if you’d like, you could cut out early today,” or “Let’s take a break for an hour or two,” or “Is everything okay?” It gives sort of an alert in advance that there might be a problem.

Elizabeth: Interesting.

Gene: What Okushin is saying, because they’re using it internally, and they’ve employed mentally challenged workers or people with emotional disorders or things they’re dealing with, they said that this had an enormous help for their employees’ productivity and their enjoyment and quality of life at work.

Elizabeth: Well, I would think if … I’m rushing around all day. I’m sitting at my desk. I’m answering emails. I’m editing. I’m thinking up crazy things to do with the podcast. I’m responding to Gene’s emails.

Gene: Which takes up a lot of your time.

Elizabeth: A lot of time.

Gene: That’s way above four on your anger scale.

Elizabeth: If someone interrupted me and asked me how are you feeling, I think I’d be annoyed, but at the end of it, I think I’d be calmer, because I took a second to sit back and think, “Oh, okay. I am feeling a little rushed right now,” or “I am feeling like, maybe I’m feeling really energized and that’s good,” and then you want to-

Gene: It depends on the person, though, doesn’t it? It really does depend.

Elizabeth: But I think it would annoy a lot of people.

Gene: I don’t know. It depends on the person. I think the aim of this company is to say listen, it’s a significant part of the population or workforce. They do have anxieties, they do have stresses. Many people obviously are … they’re in therapy or they’re getting treatment or whatever, and how can we make their jobs a little bit better for them, and also for their employers, as well. How do we get both sides.

Elizabeth: You’re a small business owner. Would you implement this across your company for everyone, or would you do it for just some people?

Gene: No, it’s not designed to be that way. It depends on how you want to do it. I would probably be … only if I had somebody in my company, and I really don’t have anybody in my company, as far as I know, are suffering those kinds of things, but if I was aware of it, became of it, it was a condition, it was a reportable kind of condition, I would certainly, of course, ask for the employee’s permission. Even if they were seeing a therapist or a doctor, ask for their permission, as well. And just say, “Look, this is an application. I think it might help you. Do you want to give it a try?” And if they’re, “No, no, no, absolutely not,” okay, fair enough. I wouldn’t force it on anybody, but it’s a tool and an aid, and I thought it was pretty cool.

Elizabeth: Alright, great. Good Word of Brilliance. We’ll be back in a couple days with our next episode. Thanks, Gene.

Gene: Thanks, Elizabeth.