Answers to Common Entrepreneur Bookkeeping Questions Stacy Kessler, Small Business Strategist

Debits and credits are the basis of double-entry bookkeeping, but they can be difficult to grasp, let alone memorize. Our handy chart should help clear up any remaining confusion around debits and credits. Some business structures are more complicated to manage than others. Depending on how you structure your company, you may have significant filing and reporting requirements. One of the first decisions you’ll make when starting up is your business structure.

Essentially, you are looking for an answer that explains the distinction between the two methods, one using a single account, and one using multiple accounts. In single-entry bookkeeping, the single account will only show one sum total, whereas double-entry bookkeeping distinguishes between credits and debits, and is a more transparent system. Bookkeeping requires a good grasp of technology, because bookkeepers often need to use various software tools. Even if you’re hiring for an entry-level role, and therefore don’t ask for extensive expertise of a specific bookkeeping software, a potential employee must have good computer skills. Ideally, reconciling bank accounts and credit card statements should take place on a monthly basis, but never less than quarterly. Most accounting systems make this step fairly easy, so encourage your bookkeeper to ramp up the frequency if they’re not reconciling your accounts as often as they should.

It also opens up your business to common accounting errors, such as miscalculating or failing to balance accounts, which can be costly. Here are some small business accounting questions about setting up your books. Not all businesses are required to open a separate business bank account. Deferred revenue represents cash received from customers for services or goods not yet provided. Accounts receivable represents cash due from customers for goods/services already provided.

Elaborate on your previous bookkeeping and budgeting experience.

If you’re one of these kinds of small business owners, the good news is that you’re not alone. Most business owners won’t have particular preferences about these categories, as I’ve found that much of the time they just don’t want to deal with their bookkeeping at all. Sometimes they’ll ask you what you recommend, which is perfectly fine too. If they have any particularities, those are what you’ll want to note, and it’s helpful to know them from the beginning because it will save you quite a bit of effort in the long run.

This site contains free bookkeeping and accounting courses and is ideal for anyone looking to learn finance, bookkeeping or accounting. This site contains information on double-entry bookkeeping, basic accounting, credit control, business planning, etc. With accurate and organized books, along with the proper guidance and knowledge, you can handle your small business’s taxes. Check out these questions about accounting and answers related to taxes. With cash-basis accounting, you only record transactions when you physically make or receive a payment. This is a single-entry accounting system, meaning you record each transaction once.

KPMG Career Catalyst: Tax

With accrual accounting, you record money whenever a transaction takes place, even if you don’t physically give or receive money (like when you are billed or write an invoice). This is a double-entry accounting system, which means that you must record two entries for each transaction. Recording transactions by hand is the most inexpensive and time-consuming method.

For mileage, track what you drive for business (keep records via spreadsheets or use an app like MileIQ) and multiply that by the annual mileage rate (usually changes each year). So if you drive 100 miles for business, you could reimburse yourself $58 (or take the exact same deduction at the end of the year). Remember, if you have more than one submission and want them dated differently in your books, APPROVE EACH SEPARATELY. When you’re done you can save it and add another receipt if you have more things that need to get reimbursed.

bookkeeping basic interview questions to find the best candidate

Having a list of questions ready ensures you achieve each of these goals. This way, you are always aware of the needs of your bookkeeping Bookkeeping questions clients before undertaking the onboarding process. These insights will also help you structure the handling of their bookkeeping needs.

If you work with Quickbooks you will want to work with a QuickBooks Certified ProAdvisor, ideally one who is Top 10 in at least one region. Learn how CapitalT reduced hiring bias with online skills assessments. Although this is a somewhat generic interview question, it can be useful for assessing the extent and reach of your advertising. Generally, the more enthusiastic a person is about their job, the more pertinent skills they possess.

Questions to Ask a Bookkeeper Before You Hire (Part I)

A bookkeeper will also review and reconcile all accounts to ensure they are accurate. It’s more than likely your potential client faces some regulatory challenges at the city, county, or state level. Your firm could have resources or contacts that can aid in solving these issues and including this question in your checklist can help determine your client’s needs. This accounting client question is necessary when building an understanding of their business landscape. Also, it allows you to offer suggestions (e.g. workforce development programs, low-cost training) for challenges they are facing with their workforce.

On the other hand, a business tax credit is a dollar-for-dollar tax liability reduction. When transactions take place, you must make sure that your books properly reflect the transaction. Think of debits and credits as two sides of a scale that must balance equally—if a debit increases an account, a credit must decrease the opposite account. You can use cash-basis, accrual, or modified cash-basis accounting to manage your books. When a company buys another business for more than the fair value of its net assets (its equity), goodwill is created. Therefore, if goodwill increased, it’s because the company acquired another company.

How profitable was my company last month?

These provide online form building services where you can get pre-built templates. Your clients can also choose answers from pre-filled options, reducing the time and energy needed to give you the necessary information without such a digital platform. A relatively new business will have different bookkeeping needs, like setting up the bookkeeping software, payroll software, and inventory management system.

Those with more experience should focus on an instance when they changed or created a process that directly impacted the company. For example, you could talk about a time you noticed one specific report that was consistently taking more time than expected. But, you discovered a way to make the process more efficient, saving the company time (and money). On paper, there’s a few things that may give some Bookkeeper candidates an edge over the others. Being a member of a professional bookkeeping association is also a strong indicator of a candidate’s commitment to their career.

Interview Questions To “Break The Ice” With Bookkeeper Candidates

But if you don’t stay on top of your accounting responsibilities, other entities (like the IRS or creditors) may step in and hit you with penalties. Anyone with access to sensitive employee and financial data must guard it aggressively. Find out what  measures a prospective bookkeeper takes to ensure digital security and personal privacy. Follow up by exploring what happens if security is breached for any reason. This resource will help you develop an onboarding checklist for new hires.

• Debiting the asset account will increase the amount in the asset account.
• For example, you’re a florist who purchases $500 worth of flowers from your supplier Fiona’s Flower Supply.
• You can use this question to see if a candidate has researched your company, and also determine whether they would be a good fit for the business.
• Most business owners won’t have particular preferences about these categories, as I’ve found that much of the time they just don’t want to deal with their bookkeeping at all.

Use these 21 questions as an accounting bookkeeping checklist template to start productive conversations and get more clients. If you’re an accounting firm looking to enhance your client acquisition, Titan Web Agency offers specialized marketing for accounting firms to help you stand out from the competition. These last few additions to your new accounting client questionnaire are questions a bookkeeper should ask a client, too.