Ep 21 – Onboarding a New Client


Episode 021 – Onboarding a New Client


Recorded: June 22, 2022

Released: June 23, 2022

Intro by Clive Castle

Sounds by ZapSplat


There is much to learn, and to set up, when onboarding a new client. In this episode, we talk about several different areas that you need to review and question before diving into your bookkeeping tasks. Find the transcript of this episode below.




Hello and welcome back to The Better Bookkeeper Podcast. I’m your host, Patrick Donovan, President of Cape May Counting House, a virtual bookkeeping firm.

It has been a little while since the last episode and that’s because my father passed away last month so a lot of things end up getting pushed to the back burner for a bit. So, I thank you for jumping back in and listening.

I am about to onboard a new client and I thought “why not do an episode on that process?” Whether you are doing the bookkeeping for your own business or you run your own bookkeeping firm, this could give you a different take on what you’re currently doing. You can find the transcript of this episode at thebetterbookkeeper.com/021. If there is something you feel that I have missed, please leave a comment on this episode’s page or on Facebook or Instagram @thebetterbookkeeper.

I’ll see you on the other side.


So, as I mentioned, I am about to onboard a new client and there are so many things that you need to tend to so that things run smoothly.

The first thing is to ask questions about the prospective client’s business such as the industry, where are they located, sales, who the owners are, how many employees, how is the business organized, and so on.

You also want to get a feel for the scope of the business. If you run your own bookkeeping firm you need to understand the scope of the business so that you can provide a reasonably accurate pricing quote. How many bank accounts, credit cards, and loans do they have? What do their fixed assets look like? Are they recording depreciation and/or amortization What about their accounts receivable and accounts payable? Each additional account means more work for you due to more transactions to record and reconciliations to perform. Speaking of reconciliations, find out when the last time their bank, credit card, and loan accounts were reconciled. Most of the time there is going to be some clean-up work involved so make sure that you factor that in. I would suggest that you actually charge for the clean-up separately AND require an upfront payment. My new client just started his business so a lot of things need to get set up before I can even begin any bookkeeping tasks. That’s something you should also be charging for – any setup that needs to be completed before you can start working.

You’ll also need to determine what services your client needs. Will you provide bill paying services, payroll processing, and/or preparing and submitting tax filings? If you don’t feel up to the task of providing certain services be sure to let your prospective client know and document everything that you will be doing and everything that you will not be doing so there are no surprises later. An engagement letter which spells everything out will prove very beneficial if there are any claims against you. Having errors & omissions insurance will also protect you but you’ve got to make sure that your engagement letter specifically spells out what you will and won’t do.

Next, look over their chart of accounts to get another perspective on the scope of their business. For many small businesses, due to low activity, some expenses can be grouped into existing categories. If the business is growing pretty rapidly and has a wide breadth of operations then a larger chart of accounts may provide them with some valuable detail.

The next step is to run some financial statements. You’ll want a detailed Income Statement, Balance Sheet, and Statement of Cash Flow at the bare minimum so that you can see pretty much most of the accounts and if anything looks unusual that you could inquire with the client about. You want to make sure that you don’t have negative amounts where there shouldn’t be because that means you have the beginnings of a mess. If you find something like that, you need to start digging further to see what else you uncover. Clean-ups take time and time is valuable so you really need to comb through the financial statements to see what you are looking at AND decide if it’s something that you want to take on.

Poring over the financial statements also gives you the opportunity to see if your client has been forthcoming with enough information regarding their business activity. If they have been withholding telling you important information then you may want to reconsider taking them on. Withholding information may be a habit of theirs and you could be setting yourself up for problems down the road when you need documentation or at the very least, answers.

You may want to calculate some financial ratios yourself to assess the health of your new client’s business. It would give you a baseline to work from and provide a little bit of insight into key areas of profit and expense.

You will also want to look over the lists for customers, vendors, and products and services. Look through them to see if there are duplicates that need to be merged and if there is missing information that needs to be updated.

Take a look to make sure their taxing authorities are properly set up in their accounting system and that the most current rates are being charged.

If you are going to be doing payroll, make sure that their payroll accounts are set up correctly and review the last several pay periods to get a feel for the flow. If you are going to be pushing the client out to a third-party payroll processor make sure that you’ve got a workflow hammered out so things don’t slip through the cracks.

Once you have gone through all of these areas, start working on creating workflows specific to your new client. Having things written down makes you conscious of how you will be handling each task and will minimize the times when you have to make judgment calls. Consistency will help create habits and make your more efficient at your bookkeeping tasks. Efficiency means that you are able to complete tasks more quickly, saving time, and making you more profitable.

After you have done all of this, and resolved any questions you may have with your new client, you should be in a pretty decent spot to begin your bookkeeping engagement.


That’s it for this episode of The Better Bookkeeper Podcast. If you enjoyed this episode please subscribe. It really helps us out. Also, don’t forget that we now offer online courses. Our first course, Bookkeeping Fundamentals, is already available and others are being developed. Please visit thebetterbookkeeper.com/courses for more information. Thanks and have a great day!

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