Red Flags When Hiring a Bookkeeper (and How to Test Skills)
Don’t Hire the Wrong Bookkeeper. Hire the Right One-Fast.
Hiring a bookkeeper can either stabilize your finances or create months of silent damage.
Spotting red flags early and running a quick skills test can save you thousands in cleanup, missed deductions, and audit headaches.
Want to Hire a Bookkeeper instead? →
Red Flags When Hiring a Bookkeeper
1. They Promise to “Fix It at Tax Time”
If a bookkeeper says they’ll sort everything out at year-end-run.
That means they’re not closing your books monthly, and you’ll end up paying your CPA double to reconstruct records later.
Ask: “What’s your monthly close timeline?”
If they can’t explain Day 1-10 in detail, they don’t have a process.
See: Monthly Close Checklist (Free Template) for what a real close looks like.
2. They Don’t Reconcile Every Month
Reconciliations are bookkeeping’s heartbeat.
No reconciliations = fake reports.
Watch for:
- “I use bank feeds, so I don’t reconcile”
- “We’ll reconcile quarterly”
- “The numbers match the dashboard”
Each month should end with zero variance between your accounting software and bank/credit card statements.
Learn how Monthly Bookkeeping guarantees Day 7-10 reconciliations.
3. No Written Process or Checklist
Bookkeeping is a system, not a vibe.
If a candidate says “I just keep it in my head,” expect missing entries and chaos.
Ask for:
- Their month-end close checklist (if blank → red flag)
- Their process for receipts, payroll, and sales tax
- How they handle review and sign-off
You can even ask them to critique our own Monthly Close Template-good bookkeepers love process.
4. They Resist Oversight
Transparency is non-negotiable.
Bookkeepers who resist logins, reports, or review checks are often hiding sloppy work.
Watch for:
- “You don’t need access, I’ll send reports.”
- “Only I should post entries.”
- “That’s private, don’t worry about it.”
Good bookkeeping thrives on shared visibility-not secrecy.
See how RBO uses two-tier review + CPA oversight in every plan: Affordable Bookkeeping
5. They Avoid MFA or Portal Systems
Bookkeepers who email spreadsheets and PDFs are a security risk.
If they refuse to use multi-factor authentication (MFA) or a secure client portal, that’s a dealbreaker.
Ask:
- “Do you use password managers or MFA?”
- “Can you work inside our QuickBooks Online/Xero?”
- “Will you share a secure portal for document exchange?”
If the answer is “no” to any → red flag.
6. They Charge Hourly with No Scope
Hourly billing with no documented deliverables = endless invoices.
Hourly pitfalls:
- Incentive to stretch tasks
- Zero accountability for results
- Hidden cleanup fees
A flat monthly rate keeps accountability clear.
See Flat-Rate Bookkeeping for a transparent model.
7. No Real References or Sample Reports
Always ask for anonymized reports or reconciliations.
If they can’t show prior work-even redacted-it’s a red flag.
Ask for:
- Sample P&L, Balance Sheet, and reconciliation report
- How they note outliers or miscodings
- References from similar-size clients
Bonus: ask them to spot three errors in a sample P&L-they should find miscodings instantly.
8. They Don’t Understand Industry Nuances
Service, eCommerce, medical, nonprofit, and trades each have different rules.
If your candidate can’t explain how they’d handle your industry-specific workflows, expect rework.
Examples:
- eCommerce: mapping Amazon/Shopify fees → COGS
- Service: job costing, retainer revenue
- Healthcare: insurance write-offs
If they generalize everything, you’ll get generic mistakes.
See: Monthly Bookkeeping for Service Businesses
9. They Don’t Use CPA Review
A real professional welcomes second eyes.
If a candidate avoids CPA sign-off or dismisses reviews as “unnecessary,” they’re not confident in their own work.
All RBO plans include CPA oversight-that’s why 99 % of our books pass CPA validation the first time.
How to Test a Bookkeeper’s Skills (The 20-Minute Audit)
Give them:
- A 25-line bank feed + statement snippet
- 3 transfers, 2 refunds, 1 duplicate entry
Ask them to:
- Reconcile to zero variance
- Write a 3-sentence variance note
- Categorize transactions correctly
- Spot and explain 2 miscodings
Scoring:
- Accuracy: 60 %
- Communication: 20 %
- Process clarity: 20 %
Real-World Failures (and Fixes)
- Marketing agency: untrained freelancer misclassified ad spend-lost $12k in deductions.
- Dental clinic: no reconciliations for 8 months-cleanup cost $2,800.
- Consultant: bookkeeper used personal email + shared passwords-data breach risk; switched to RBO secure portal.
“We didn’t realize how much we were missing until cleanup day. Never again.” — CEO, CA agency
FAQs
What’s the #1 red flag?
“We’ll fix it at tax time.” It’s how you end up paying twice.
How do I test a bookkeeper before hiring?
Use a reconciliation + variance note challenge. Good bookkeepers love proving accuracy.
Is hourly billing always bad?
Not always-but it’s risky without defined deliverables and SLAs.
What security standards should they follow?
MFA, encrypted portals, least-privilege access, no shared credentials.
Can outsourcing solve these issues?
Yes-flat-rate plans come with SLAs, portals, CPA review, and zero turnover risk.
Hire smarter. Not harder.
Run these red-flag checks-or skip hiring entirely and go flat-rate.
See Monthly Plans →
Talk to a Specialist →
