Three Keys to Bookkeeping Quality Assurance

Three Keys to Bookkeeping Quality Assurance

People often get confused about quality assurance for bookkeeping. It’s no wonder why. Most articles seem written by robots and aren’t particularly actionable. Let’s explore what quality assurance means and how you can get started implementing it in your firm.

What is quality assurance?

First, let's agree on a simple definition for bookkeeping quality assurance and what it entails. Quality assurance is a meta-process that aims to constantly improve a particular process or set of actions. More specifically, it aims to answer the following questions:

  • Was the job done? - This involves systematically tracking and checking whether or not tasks were completed. The simplest version of this is having a team self-report task completion, but ideally the person in charge of quality is also verifying this at some level.
  • Was the job done correctly? - This is the trickiest part. What is 'right' or 'correct' is defined by the process the firm has established, as well as each individual client's needs to some extent. This review begins with the highest level of non-negotiable best-practices for the firm, then goes more granular into the specific situations an individual client job may present. In short, the point is not only to verify accuracy of the output in the accounting sense, but that the process laid out for a given task was followed.
  • Was it done within the agreed upon constraints? - This can be measured in hours, budget, or other metrics, but ultimately a robust quality review ensures the ability of the firm to deliver results within the constraints of a particular task. Delivering exceptional quality that is over budget or that takes twice as long to deliver than what was committed to is unsustainable in the long-term.

If the answer to any of the above is 'no', then it is a breakdown that needs to be addressed and analyzed for improvement.

Why is this important?

Here are reasons to institute and track quality in your organization:

  • Save time. - Finding and closing quality gaps saves you time in the long run. The more time that elapses between a quality issue and discovery of that issue, the more time it takes to fix.
  • Improve profit margins. - Consistent quality issues create more rework (redoing work that was previously done), which negatively affects your profit margins. This is especially true if your bookkeeping services are priced on a fixed-fee basis.
  • Close training gaps. - As your team grows, you will have to bring on junior or new people to handle the workload. This creates situations where not everyone is necessarily up to speed on the 'right' way to do things. This slows down the team and is directly correlated with a decrease in quality.
  • Prevent fraud. - No one likes to think about it, but fraudsters actively look for situations where things are disorderly. They succeed most frequently when their work isn't actively reviewed, so setting a strong focus internally around quality is a huge deterrent.

How do I get started?

This all sounds great in theory, but you need to roll this out for it to work. Below is a step-by-step game plan to improve bookkeeping quality assurance in your firm.

  1. Assign responsibility for quality assurance to someone internally. Everyone needs to feel responsible to some extent, but having a point person is critical.
  2. Create a process diagram for bookkeeping service delivery. Make this as granular as possible (i.e. down to the task level).
  3. Create a quality assurance checklist for each of the tasks in the process diagram. Discuss where things are most likely to break, and what changes can be made to prevent that.
  4. Track and manage service delivery using firm management software, Asana, Google Sheets, or Excel depending on the team size and complexity of the workflows.
  5. Have people regularly review their own work using the checklist before marking items as complete.
  6. Have the person responsible for quality frequently conduct reviews testing for the three conditions laid out in the first paragraph - ideally by using a tool like Scrutinize to automate the review.
  7. Distill and document the things you find and conduct regular meetings to review ways to improve the current processes.

This is just a start, and your individual needs will vary. If you're just getting started or looking for help refining quality assurance in your firm, schedule a free consultation today.