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When You Shouldn't Feel Bad About Firing Your Bookkeeper

Posted by Rocky Pedden to Accounting, Business Advice

Getting the axe

While hiring a bookkeeper has traditionally been a right of passage for growing companies, businesses expect more than someone who just pays the bills and reconciles transactions at the end of the month. After all, financial insights are essential for making smart business decisions.

But firing someone is rarely easy and it’s never fun, unless you’re a sociopath.

Even when an employee isn’t performing to expectation, firing that person is awkward and uncomfortable. Which is exactly how I’ve felt when business owners have asked me how to go about delivering that bad news to their bookkeeper.

To be clear, we’re not in the businesses of taking people’s jobs; after all, we’re constantly hiring bookkeepers internally to meet demand. Many business owners come to us because they are not getting what they need from their current bookkeepers. 

4 scenarios when business owners should follow their gut and fire their bookkeepers

1. Your part-time or month-end bookkeeper doesn’t really understand your business:
This may have seemed like a smart choice at first, at least economically, but most business owners find themselves wanting more. Part-time bookkeepers usually don’t get a chance to understand a company enough to contribute new ideas to better your business’s financial practices or anticipate future needs based on financial patterns or indicators—not a scalable solution.

2. Your full-time bookkeeper isn’t adding value:
Today’s small businesses are data-driven and want insights as well as compliance from their finances. Entrepreneurs want a solution that goes the extra mile to include meaningful figures, industry insights, and even tax preparation. A bookkeeper who just checks boxes and administers transactional history is not going to cut it against the competitive edge modern solutions can provide.

In addition to the missing advantages business owners have come to see as necessities, the even bigger frustrations they tend to have with a full-time bookkeeper are inefficiency and mistakes. Keep in mind: It’s important to provide this feedback BEFORE you make the decision to cut the chord. Make your expectations clear and give people a chance to improve.

If this has been a continuous problem that you haven’t been able to resolve by providing proper feedback it’s time to find an alternative.

3. Your bookkeeper is your spouse…or family member:
This may seem like the hardest decision ever, which makes sense–this is the bridge you want to avoid burning the most. At first the pros of having a family member handle your books are obvious. You trust them and they’re deeply invested in your success. But can they really be 100 percent objective? (Remaining unbiased is pretty important when dealing with a company’s books.)

Firing a family member adds extra emotion to an already difficult situation. Luckily, you can be much more transparent with someone you’re this close to. Good communication is key. Explain your business goals, what you need to achieve them, and how the business’ success is in the family’s best interest. Besides, separating your business and personal life means you can treasure the relationship more from home.

… F.Y.I. According to Forbes the earlier you rip this band-aid, the better.

4. YOU are your own bookkeeper:
This is going to be more of an existential battle than handing someone else a pink slip.

There’s a really big upside to being a financially-savvy and number-obsessed business owner, just ask our CEO. But think deeply about what your goals are for your company and where you’ll have the biggest impact. Admit it, your time would be better spent not managing the books, commonly known to be the least favorite part of running a business.

The first step in firing yourself is accepting that you don’t need to be the best at everything. Typically, business owners and startup CEOs aren’t fully equipped to justify the extra time they spend each week/month/year on their business bookkeeping and accounting. They’re just teaching themselves enough to get by without getting slapped by the IRS.

Generally speaking, even if you’re running a company, you shouldn’t spend too much time handling anything you wouldn’t hire yourself to do. There are so many affordable options for outsourcing that can save you more time and money in the long run than doing it yourself ever could.

Before making the decision to fire your current bookkeeper or bookkeeping solution, be sure you know what you are going to use instead. The great news is that we’ve made it super easy to weigh the options that make sense for you and your business all in one place:

Entrepreneur's Guide to Accounting & Tax Filing

About the author
“Rocky

Rocky Pedden

Rocky Pedden works with startups and small businesses to identify what could be holding them back from success and advises them on the best approach for their back-office strategy. An avid outdoorsman, Rocky enjoys hiking, camping, fishing, and backpacking while also brewing his own beer and spending time with his fiance and their dog, Butter. He encourages new businesses to start good accounting practices from day one and is available at rocky.pedden@indinero.com or 503-594-4331.


Disclaimer: The inDinero blog provides general information about tax, accounting, and business-related topics. It is not intended to provide professional advice. Read more in our Terms of Use.

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