Let me preface this with listing the three most important qualities for your bookkeeper to possess:
They can execute the work correctly
You trust them
You get along with them and enjoy your communication
Whether you are thinking about hiring a new bookkeeper or replacing your current one, might you also consider that it is beneficial to hire one who works in your industry? When a bookkeeper works in a niche, they bring experience, efficiencies, and connections to the table that other bookkeepers can’t compete with. Let's run through the four ways in which a niche bookkeeper can help you grow your business.
Your niche bookkeeper will understand the correct bookkeeping practices unique to your industry. From specific sales tax compliance and necessary government slip filings, to recording your particular employee or contractor pay structure, your niche bookkeeper will already understand these features before being hired by you. Most importantly, they can advise you on system process improvements based on their broad experience in the industry.
Industry Specific Software
Your niche bookkeeper will know how to work in most software that your industry utilizes. They will be able to efficiently extract data from your software into your accounting system. Although this may seem simple, inefficient extraction can cause many unnecessary hours of work as well as potentially cause errors. Knowledge of the leading software in your industry related to tracking your finances means that they can advise you on switching to more appropriate software if the need arises.
Having multiple clients in the same industry means that your niche bookkeeper will have cultivated a network of professionals who may be beneficial for you to get to know. Think of examples such as you’re selling your business, looking to switch products or suppliers, or you need professional services such as a lawyer or business coach unique to your industry. Who does your bookkeeper know who could help you with these changes or needs? Your niche bookkeeper is probably more well-connected than you realize.
Gross Profit & Net Income
Your niche bookkeeper will have intimate knowledge of what the typical revenue and expenses are in your industry. If your gross profit is landing on the lower end of the spectrum of what your bookkeeper expects to see, they will have suggestions on how you may be able to improve your bottom line based on real life industry experience and information.
If you find yourself wondering why on earth you would want your bookkeeper to share information that they have gained from working with you with your potential competition, I want to clarify some things. A professional bookkeeper values confidentiality and will not disclose any trade secrets or other information that is specific to your business to anyone else (see why #2 of my criteria is so important). The benefits that I am writing about will be specific to your industry, but not your company. This will be information that could be sought out if anyone were keen to find it, but far easier to gain from your experienced niche bookkeeper rather than going down multiple avenues trying to attain that information.
I want to stress that if you love your current non-niche bookkeeper, there is no need to read any further. Go and virtually hug them for doing an amazing job and be grateful that you found someone who you love to work with. Still, tuck this information in your pocket for the future if you find yourself in need of hiring a bookkeeper again.
If you are currently looking to hire a bookkeeper, consider the following questions when interviewing your candidates:
Have you worked with businesses in our industry before? If yes, tell me about your experience.
Do you currently have any other clients who work in our industry? If yes: How many years of experience do you have doing bookkeeping in our industry? If no: Provide an example of a bookkeeping quandary specific to your industry and ask the potential candidate to solve it. This will help test their ability to problem solve and learn bookkeeping specific to your industry.
Do you have experience working in the software that we use? If no: Are you comfortable learning new software?
Remember, having a bookkeeper who already works in your niche is a benefit, not a necessity, so make it a priority that your new hire holds those first 3 qualities that I mentioned at the beginning of this post.
If you would like suggestions on how you can find a bookkeeper who works in your niche, drop us a line! We love to help small business owners in any way that we can.