How to Hire a Bookkeeper, CPA, Controller and Virtual CFO

By Greg Herring
Herring Group, Landscape CFO, Virtual CFO

I do not know about you, but I have learned the hard way that it is easier for someone to interview well than it is for him to perform well in his job.

How does this realization help me?

It helps me remain a skeptic throughout the hiring process. No longer do I “fall in love” with a candidate in the first interview.

In my last blog post, I reviewed the five accounting and financial roles that most businesses need. My goal was to help business owners understand each role and why they need them in their businesses.

In this post, I will provide some practical advice on hiring and using these people in your business.

Getting the Help You Need

The challenge in filling these roles is not when you are big enough to have a full-time person in each one of these roles. The challenge is when you cannot afford to hire any one of these people full-time. (However, at a certain size, companies will find that good people in these roles will pay for themselves – whether full-time or part-time.)

Most business owners will hire the tax CPA and bookkeeper first. As the business grows, the need for more strategic and more sophisticated accounting and financial people grows. Near the beginning of the business, the goal is to grow revenue and execute. The bookkeeper is needed to record transactions and produce basic financial reports. The tax CPA helps you comply with the Internal Revenue Service. As the business grows, you will need to add Controller and CFO (Chief Financial Officer) capabilities, not necessarily in that order.

The exception to this approach is for start-up companies in industries where the business model, determining what you should sell and to whom you should sell it, and pricing are not well developed. A virtual CFO can add significant value in these areas. Furthermore, you may also find it helpful to engage a virtual controller or CFO to set up a well organized chart of accounts (to produce the reports that you need to run your business) and to get you started on the accrual basis of accounting.

In these examples of a company in the early stages of development, work with a virtual CFO or controller would be temporary, not ongoing. 

Personal Characteristics

When you hire people into financial roles, you want people with the following characteristics:

  • High integrity (honest; strong moral principles; tells you the truth; does not hide information; tells you bad news before you find it)
  • Has your best interests in mind
  • Educated in bookkeeping or accounting, and/or has many years of experience
  • Process-oriented
  • Organized
  • Good attention to detail
  • Able to work independently (You did not start a business because you like accounting!) 

Interviewing Techniques

There are lots of good books on hiring and interviewing.  I like many of the concepts in Top Grading by Bradford Smart.

When you are hiring accounting and financial people, you are hiring people for roles where high levels of trust are important. You will want to do reference checks. You may want to consider background checks and credit checks, but check your local laws related to hiring before you do.

Reference checking can be difficult due to company policies on providing references. Here’s one trick I learned from Brian Riley, a great recruiter. Inevitably, my phone calls go to voicemail. Here’s the message I leave, “I am calling for a reference on John Doe. I would appreciate hearing your opinions of him, but if you do not recommend him with great enthusiasm, there is no need for you to call me back.” This message gets a quick response for great references, and no response for poor references. 

Interviewing Questions

For interviews, I prepare questions in advance. There are many good websites where you can find questions. Here’s one that I like that has questions by category. The site is intended for job applicants, but I find it helpful for employers.

I have listed some specific questions for each hire below.

Questions for Tax CPA Interviews

  • What clients have you served in my industry?
  • What clients have you served in similar industries?
  • What are some important tax issues for business owners in my industry to consider as they make business decisions?
  • What assistance can I expect to receive from you related to tax planning (without asking specific questions of you)?
  • What do you need from me in order for you to provide the most value to me?

The Tax CPA is the expert. He needs experience in your industry or a similar industry. He needs to be proactive, not waiting on you to ask the right questions.

Questions for Bookkeeper Interviews

  • What is the difference between accrual accounting and cash accounting? (In accrual accounting, revenue is recorded when earned and expenses are recorded when the benefit of those expenses is received. In cash accounting, revenue is recorded when cash is received and expenses are recorded when cash is paid. It is virtually impossible to use cash basis financial statements to inform business decisions.)
  • When and how do you record depreciation? (Depreciation is a real expense even though it doesn’t affect cash. A great bookkeeper will keep an Excel schedule of new asset purchases and record depreciation expense monthly.)
  • Payroll is paid every two weeks. How do you make sure each month has the appropriate number of days of payroll? (The goal is to get rid of the two months each year where a company that records payroll on the cash basis sees six weeks of payroll expense recorded in one month.)
  • If the company pays $12,000 in one payment for insurance that lasts one year, how do you record that expense? (Because the benefit of that expense is realized over one year, the bookkeeper should record a prepaid expense (an asset) for $12,000 when paid and then record $1,000 of expense each month, reducing the prepaid expense.)
  • How do you keep accounting records organized? Please provide a complete answer with a lot of detail and specifics.

If the bookkeeper candidate can answer these questions, then she probably has the right conceptual mindset to provide the accurate data that you need for reliable financial reports. If the candidate does not know the answers, then she probably does not have the experience that you need. 

Questions for Virtual Controller Interviews

When interviewing controllers, you want someone who is highly organized, efficient, and confident in her ability to produce value for the company.

You may want to ask them the accounting questions for bookkeepers as well, but start with more philosophical or abstract questions:

  • Now that you know a little about my company, what value will hiring a controller have for my business? (Confidence in your basic financial statements, additional reports for managing key aspects of your business, consistent cash reporting and cash forecasting, a reliable system of internal controls to minimize the opportunity for fraud and errors, etc.)
  • How does hiring a controller make my job as the business owner and CEO easier?
  • How would you prepare a budget at this company?
  • How would you recommend holding people accountable for the budget to actual results at this company?  Here are some follow-up questions:  How would you distribute accountability? What reports would you provide? What meetings would be necessary? You are not necessarily looking for the “right” answers here. You want to see how they think about the question and the completeness of their thinking about budget accountability. They will likely answer this question differently after they have been on the job for 90 days because they will know more. 

Questions for Virtual CFO Interviews

The contract CFO (Chief Financial Officer) will be your most expensive hire and he should bring the most value. Therefore, you want to understand the specific value that he will contribute to your business. In the interview process, make him be specific.

 Because the virtual CFO will work closely with the business owner or CEO, it is important that the two people develop a good working relationship and be aligned in their philosophies of producing results. The best results occur when a high degree of trust develops. 

This person is an executive-level hire, which means that you are hiring a person who is capable of thinking independently, considering and presenting options to solving problems or pursuing opportunities, and making a recommendation with supporting reasons for that recommendation. In short, this person should free the CEO from a significant burden as it relates to accounting, financial matters, strategic planning and risk management.

Here are some questions to ask:

  • What areas of my business could use a CFO’s attention?
  • What philosophy or framework do you use to produce results?
  • You have seen my income statement; what do you think the business’s net income could be? How did you determine that estimate? (If they are not sure yet, then you can ask how and when they will determine a target.)
  • What do you think the most difficult aspect of my job as a CEO of this business is?
  • How will you add value to my business?
  • What are your favorite business books?

As the virtual CFO candidate is answering these questions, you want to listen for how he thinks and how he approaches people and business. Remember that by nature CFOs are not salespeople, so do not expect the type of conversation you would have with a professional salesperson. You do not need a virtual CFO who can sell. You need one that you can trust to identify and protect your interests.


If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

-Red Adair, Oil Well Fire Fighter

The Non-Negotiables

I have a strong preference for onsite bookkeepers for most companies. A bookkeeper can be an office manager, but an office manager cannot be a bookkeeper. If the transactions are not recorded correctly, then it will cost a lot more for a higher level person (accountant or controller) to fix them.

Do not hire these people if you are not willing to enforce compliance with procedures (e.g. timely receipts, approvals) and if the bookkeeper doesn’t get the needed information (e.g. account coding, job costing). You will run off good people in these roles and then you will not have good data in your reports.

Make sure the bookkeeper documents the processes. I use to document processes and create checklists. It is an inexpensive and easy-to-use tool. Process documentation helps reduce the training time (i.e. your time) for new employees. It also has a hidden benefit:  It allows you to hire lower paid people as you grow. 

The Ultimate Test

Good professionals in these roles make it look easy.

Here’s what that situation looks like: 

  • Managers have the reports that they need to make decisions.
  • The income statement provides valuable information to the owner and others.
  • Managers talk about what the numbers in a report mean, not whether the numbers in the report are accurate.
  • There are few accounting and financial surprises.
  • Cash flows.


If that situation does not describe your company, let’s talk.