Whether you’re a startup or a growing small business, knowing your financial status is key to keeping your business on track. Whether you work with bookkeeping software that offers support, a part-time bookkeeper, or external accountants, it’s crucial to ensure they are doing their job properly, making your life easier, not harder.
Good bookkeepers are your financial peace of mind, keeping things organized and making sure you are compliant. But bad ones can drain your profits and intensify your tax nightmares. Is your bookkeeper the right fit? Read on for 10 troubling signs that it may be time to find a new bookkeeping solution.
10 signs of a Bad Bookkeeper
- Missed Deadlines
In bookkeeping, timing is basically everything. Consistently missed deadlines, whether for payroll, tax filings, or financial reports, can throw your business into chaos, leading to penalties, stress, and cash flow disruptions. It doesn’t just cause chaos; it can lead to late penalties, legal consequences, and stress.
If your bookkeeper frequently delays critical tasks, it could mean they’re disorganized, overwhelmed, or simply not prioritizing your business the way they should. Either way, that’s a major red flag. Only with good bookkeepers can you ensure that deadlines are met, cash flow is properly managed, and all financial obligations are handled without last-minute scrambles. They keep everything running smoothly behind the scenes.
- Frequent Mistakes
Accuracy is essential in bookkeeping. Misreported profits or overstated costs can lead to overpaid taxes and costly penalties. A reliable bookkeeper will review figures before submission and proactively request necessary information. If you’re consistently finding errors, it’s time to reconsider your bookkeeping solution.
- Reliance on Proprietary Software
Beware if your bookkeeper uses proprietary software. While they may claim this increases control, security, or provides an integrated service, proprietary systems prioritize their control over your data. It means users cannot access their data without the system. It’s a classic lock-in tactic; you’ll likely face no direct export capability. Migrating your historical data becomes a nightmare, and it would be a costly headache if you want to transition to other finance software like QuickBooks or Xero.
Data export is essential because it ensures you maintain ownership and control of your financial information. Without it, you’re trapped within the provider’s system, unable to easily move your data if you decide to switch services or if the provider goes out of business.
This isn’t just inconvenient; it’s a red flag. It limits your control and creates high switching costs. Don’t let your financial information become a hostage. Think again if you’re comfortable with a service that restricts your access and flexibility.
- Underqualified Bookkeepers
Imagine handing over your financial records to someone who just graduated with a degree in… well, not accounting. That’s the reality with some VC-funded bookkeeping services. They prioritize profit over expertise, staffing their operations with interns or fresh grads who lack the experience to handle your business’s finances.
They aren’t seasoned professionals; they’re learning on the job, with your money. Expect basic errors, missed deductions, and a general lack of understanding of complex financial situations. They might know the software, but they don’t know your business. These errors can lead to tax penalties or missed opportunities for growth. Don’t be fooled by their fancy website. Choose a bookkeeper with proven experience and a track record of success.
- Lack of Data Backup
Hacking isn’t just a problem for big corporations, it can happen to any business. And if disaster strikes, losing your financial data can be a nightmare. Make sure your bookkeeping service has secure backups in place, so your records stay safe no matter what.
- Low-Price Bookkeeping
Tempted by a bookkeeping service that seems too good to be true? It probably is. Professionals are expensive, but amateurs cost a fortune. When prices are slashed, quality inevitably follows. These services often rely on inexperienced or untrained staff, or even cheap offshore labor, to keep costs down. Another cost-cutting way is to use automation over human insights. They may claim it is cutting-edge, the latest AI technology, but it is essentially offering software without service.
These low-cost solutions lack quality control or review procedures, resulting in mistakes in your financial reports. Operating on an unsustainable business model, these service providers risk sudden closures and leaving you scrambling to recover your data. Don’t let a low price tag blind you to the hidden costs. Invest in a bookkeeping service that values accuracy and expertise.
- Disorganized Financial Records
Ever panicked trying to gather scattered financial records for tax season? A key responsibility of any bookkeeper is to maintain an organized system for all your financial documents, ensuring easy access to your numbers and related financial documents. This includes receipts, invoices, bank statements, and payroll records.
Remember, the IRS mandates that you retain these records for at least three years, in case of potential audits. They may require you to substantiate details of your financial statements.
- Cancellation Policy
Pay close attention to the cancellation terms and auto-renewal policies of bookkeeping services. Some providers offer annual billing for savings. While the deal might seem irresistible, remember that you’ll be tied to them for an entire year. If you decide to switch to another service mid-year, you could end up paying for a service you no longer use. Crucially, be aware of whether there’s a lock-in agreement or if you can cancel anytime. Some services offer true ‘cancel anytime’ flexibility, while others require you to notify them one month or even three months in advance.
Services that offer free or low-priced trials often come with a catch. Once the trial ends, they may automatically renew your membership at a much higher price. Many forget to unsubscribe, and some providers take advantage of it.
Remember Bench before its shutdown? It suddenly stopped offering monthly billing, forcing users to either pay the full annual fee upfront or have their accounts canceled. Before committing, ensure the service allows flexibility. Look for transparent billing terms, fair cancellation policies, and no hidden fees.
- Delayed response
If you use an external bookkeeping service, you’ll likely need assistance with corrections, explanations, system navigation, or tax guidance. Slow responses or unavailability, especially during tax season, can turn minor issues into weeks-long frustrations.
Before committing, review the provider’s support policies. Look for one with a solid reputation for customer service, clear response time commitments, and a quick issue resolution process.
- Poor Customer Review
A few negative reviews are normal. But if you see consistent complaints about major issues, that should prompt concern. Issues like inaccurate records or missed deadlines often surface in online reviews and discussions. So, it’s worth doing some research before you choose a bookkeeping service.
Why Fynlo is a Trusted Solution
If you’ve recognized one (or more) of the signs of a bad bookkeeper in your current service, it’s time to consider a reliable alternative. At Fynlo, we understand the challenges of financial management firsthand. That’s why we’ve built an intuitive platform designed to simplify your financial life and put you back in control.
Fynlo provides access to seasoned accounting professionals. Our junior accountants bring over five years of experience, while our senior accountants boast more than ten years, most honed at top-tier firms like the Big Four, Baker Tilly, BDO, and Grant Thornton. We also prioritize confidentiality and data security. Every client relationship includes a signed Non-Disclosure Agreement (NDA), so your sensitive financial data is protected at all times.
Here’s how Fynlo can benefit your business:
- Expert Bookkeeping
Avoid the hassle of missing documents or deadlines with expert help tailored to your business.
- Comprehensive Reporting
Gain real-time insights with customizable dashboards and seamless data integration, enabling informed decisions for operational optimization and growth.
- Effortless Budgeting
Monitor spending, identify variances, and maintain project profitability with real-time updates, customizable budgets, and clear visual comparisons.
- Invoice & Expense Tracker
Manage your finances with precision: customizable categories, multi-currency, forecasting, and instant financial overviews.
- Streamlined Invoicing
Effortlessly create, send, and track invoices with our powerful dashboard.
Click here to schedule a call with our expert and take the stress out of bookkeeping. Fynlo team can handle everything from categorizing your transactions and reconciling your accounts to delivering precise, tax-ready financial statements.
