Hiring the Right Person

The following steps should be followed when you approach the task of hiring an employee:

Job Description -

The first step is to define the open position.  A proper job description will identify the job’s title, the specific job duties that will be performed, and any specific requirements in terms of education, work experience, professional certifications and technical skills.  If you prefer not to include a specific salary, then it’s recommended that you at least include a salary range.  Make the job description sound exciting and interesting – remember you’re trying to attract the best and the brightest applicants.  If you offer a great employee benefits package, make sure you elaborate on that subject.

Where to Look-

The easiest way to recruit new employees is to find referrals from your current employees.  They know the company and can usually tell if someone is going to be a good fit.  Other good sources include:

• Online sites such as careerbuilder.com and monster.com
• Trade association websites
• Put a “Careers” section on your company’s website and post open positions

The Interview-

This is your opportunity to go over the candidate’s resume and ask specific questions about their work history, gaps in employment, and career goals.  Go over the job responsibilities in detail so the candidate is well aware of your expectations.  To get useful answers, you need to ask hard questions.  Be brutally honest.  When I talk to a potential hire, I almost try to talk them out of taking the position just to see how motivated and committed they truly are.

Due Diligence-

Before making your final decision on a new hire, it’s recommended that you do the following:

• Criminal background check – usually contracted out to a third party.  Limit searches to those that materially relate to the job.  For example, driving records if the position requires extensive time driving in a company car or personal vehicle.
• Drug test – a recent survey found that 84% of companies test new hires for drugs.
• Reference checks – previous employers may be wary of saying too much for fear of being sued, so try getting the names of colleagues and supervisors who no longer work at the company.  You may get some indication by asking if the candidate is “eligible for rehire”.  Document all reference-check efforts, successful or not.

Checking on potential hires can be legally intimidating, so make sure you get written consent from the applicant and make sure your company has policies in place that are consistently applied to all applicants.  A signed and dated application is a must; be clear that lying on the application is grounds for dismissal.

The Offer-

• Make the offer yourself to build trust and rapport.
• Extend the offer in person if possible.
• Make the offer in writing and highlight the benefits that matter most to the candidate.
• Condition the offer on passing the background check and drug test (as outlined above).

Make sure the applicant is aware that employment is not guaranteed, but rather “at-will”, meaning the employee may be fired and may quit for any reason or no reason at all.   Protect yourself by having the applicant sign an at-will acknowledgment as part of the written application.

Contact Steiner Business Solutions to answer any HR question you may have or assist your company with specific HR issues.

Writing off bad debt

When I first went to write off an A/R balance as bad debt, my first instinct was to do it through a journal entry.  However, I found that if you do it through a journal entry, the amounts won’t “zero out” on the A/R Aging Report.  In other words, the original debit balance will still show in the aged column and the credit balance that you just posted through the journal entry now appears in the “current” column.  QuickBooks has a great Help section and this is how the write off should be handled:

1. If necessary, first create an account for Bad Debt in your Chart of Accounts.
2. Record the bad debt by doing the following:

• Go to the Customers menu and click Receive Payments.
• Select the name of the customer from whom you incurred the bad debt.
• Leave the amount field at 0.00.
• Click on the line item that will not be paid to highlight it.
• Click Discount & Credits.
• Your bad debt expense account should already appear in the Discount Account field on the Discounts tab.
• Enter the amount of the bad debt in the Amount of Discount field.
• Click Done in the Discount and Credits window.
• In the Receive Payments window, save and close the bad debt transaction.

Is Embezzlement worth $10/hr?

I’d like to start off by asking – What is a good bookkeeper worth?  No, let me rephrase that….What hourly rate are you willing to pay someone to handle the bookkeeping functions of your business?  While you think about your answer (I’m sure it took most of you about 60 seconds), please read the following “short story”:

I was reading the Mechanicsville Local yesterday and ran across an article about a husband and wife “team” that were caught embezzling $1.5 million from the wife’s employer.  They both pled guilty to bank fraud and engaging in unlawful monetary transactions.  According to the article, the wife was in charge of purchasing supplies and equipment, maintaining accounts payable, and managing the financial records for the entire company.  For over 2 years, she was writing unauthorized checks out of the company’s bank account to bank accounts controlled by her and her husband, including her husband’s business.  The owner of the company finally realized the crime (the article didn’t mention how) and turned them both in.

Now to my point…. I spend a fair amount of time going through the local newspapers and websites such as Craigslist looking at job postings.  I’m amazed at some of the hourly rates that some employers are offering to attract bookkeepers.  It’s apparent that many business owners have no idea what a good bookkeeper is worth.  I’m sorry, but $9 – $12/hr. for a qualified bookkeeper is ridiculous- even insulting.  I’ve even seen that range of rates for office manager positions!  I read some of these job descriptions with their requirements and wonder how they think someone who possesses the necessary skills to do the job would be willing to settle for such a low wage.  For someone to effectively handle those responsibilities, they usually have had good schooling (possibly a college degree) and a good amount of relevant work experience.  I can tell you with confidence, that these qualified bookkeepers will not be responding to those ads.

I mentioned the embezzlement article for two reasons:

1. Don’t be cheap!  Pay a competitive market rate to attract a qualified and professional bookkeeper.  Realize that a bad bookkeeper can destroy your business!
2. Pay attention to your finances.  Establish some internal controls and safeguards so that people can’t steal from you.  Go through your bank statement and review canceled checks on a monthly basis.

I realize that many business owners just don’t understand accounting, so they don’t know what type of skillset or pay it takes to get the job done right.  And, as evidenced in the newspaper article, some owners don’t know how to manage their accounting office.  So, If you’re in the position of needing to hire a bookkeeper for your business, or have someone periodically review the work of your current bookkeeper, please contact Steiner Business Solutions and we’ll help you through the process of finding the best solutions for your business.