Why do these five questions work as a specialist test?

Each question targets a workflow that only exists in restoration bookkeeping — Xactimate revenue, ACV/RCV staging, supplement cycles, two-party checks, and WIP. A generalist bookkeeper cannot fake convincing answers to all five because the underlying knowledge requires hands-on restoration experience, not general accounting training. The questions are also calibrated so that a confident but wrong answer is easy to give — which means a generalist who says 'yes' to general bookkeeping experience will typically reveal their limits by the second or third question.

Should I ask these questions of an outsourced provider or only in-house candidates?

Both. The questions work equally well for vetting outsourced firms. Ask to speak to the person who would actually handle your account (not just the sales contact), and ask them these questions directly. An outsourced firm with genuine restoration specialization will have staff who can answer fluently. A generalist firm with a restoration-sounding name will struggle on questions 2 through 5.

What if a candidate answers some questions correctly but not others?

The bar should be 4 out of 5 answered correctly with specifics — not just 'yes, we do that.' A candidate who knows Xactimate workflow but can't describe ACV/RCV staging correctly likely has field documentation experience without bookkeeping depth. A candidate who knows everything except WIP schedules may be a strong bookkeeper who hasn't worked at a volume-heavy operation. Weight questions 2 (ACV/RCV) and 3 (supplements) most heavily — errors in those areas are the most expensive.

What's the single most important question to ask?

Question 2 — how to stage ACV and RCV in QuickBooks Online — is the single most diagnostic question. This is the foundational workflow in restoration accounting, and getting it wrong creates compounding errors across income statements, tax reporting, and cash management. A bookkeeper who can describe ACV/RCV staging accurately and with confidence has almost certainly worked in restoration. One who can't hasn't, regardless of what their resume says.

What else should I look for beyond these five questions?

Ask for references from restoration companies — not just construction or general contracting, but specifically insurance restoration. Ask what TPA programs their current or past clients work with. Ask how they handle month-end close timing and what date they commit to delivering the P&L. And ask what happens if your bookkeeper is out sick — who covers, and how? The answers reveal whether you're talking to a real specialist operation or a generalist with good marketing.

5 Questions to Ask Before Hiring a Bookkeeper for Your Restoration Company

▸ Framework Answer

The problem with hiring a bookkeeper for a restoration company: most of the candidates who show up for the role look the same on paper. QuickBooks experience, 5 years of bookkeeping, some construction or contractor work. You can't tell from the resume who actually understands restoration workflows and who's going to miss supplements, misclassify TPA fees, and stage ACV/RCV incorrectly.

These five questions separate them. Each one has a wrong answer that's easy to give — and a right answer that only someone with real restoration bookkeeping experience would know.

The Problem With "Bookkeeping Experience"

When a restoration owner posts a bookkeeper role — or starts vetting outsourced providers — the responses almost always include candidates who describe themselves as experienced with contractors, construction, or small business bookkeeping. Some have worked with insurance companies. Most have QBO certifications.

None of that tells you whether they know restoration.

Restoration bookkeeping is a specialty. The workflows — Xactimate estimate reconciliation, ACV and RCV staging, supplement cycle tracking, two-party check handling, TPA fee treatment — don't exist in general bookkeeping practice. They're not taught in accounting courses. They're not covered by QBO certification. They're learned by doing restoration work, and only restoration work.

A generalist with five years of QBO experience can produce a usable balance sheet. What they won't do is tell you when an approved supplement hasn't been collected, why your job margin is off, or how to handle the RCV holdback for a job that spans two tax years.

These five questions are designed to expose that gap quickly, without requiring you to be a bookkeeping expert to evaluate the answers.

Question 1: Xactimate Revenue Experience

Ask: "Have you worked with Xactimate revenue before — and can you walk me through how an approved estimate flows into QuickBooks?"

What you're looking for: A specific description of the workflow. An approved Xactimate estimate creates a revenue event in QBO — but not simply as one invoice for the full estimate amount. The bookkeeper should describe:

How estimate line items (labor, materials, equipment, O&P) are categorized in QBO
That ACV (the initial payment) is posted as a partial receipt against the job
That the depreciation holdback (the gap between ACV and RCV) is tracked as a separate item — either as deferred revenue or as an outstanding receivable pending release
What triggers the RCV invoice (proof of completion, certificate of occupancy, or carrier-specific requirements)

The wrong answer: "Yes, we work with contractor clients and post revenue when the invoice is paid." This describes a general contractor cash-basis workflow that misses the ACV/RCV split entirely.

The follow-up question: "What do you do with the depreciation holdback amount until it's released?" This exposes whether the bookkeeper is just familiar with the terminology or actually understands the accounting treatment.

Question 2: ACV and RCV Staging in QBO

Ask: "How would you stage ACV and RCV in QuickBooks Online for a $60,000 approved scope — let's say ACV is $42,000 and RCV is the remaining $18,000 holdback?"

What you're looking for: Two separate accounting events:

When ACV is received ($42,000): the income is recognized, the partial payment is posted to the job, and the $18,000 holdback is tracked as a separate receivable
When RCV is released ($18,000): a second income recognition event, posted to the job, in whatever period the carrier releases the holdback

A strong answer will also note that the two events may fall in different accounting periods or tax years — which matters for revenue recognition and tax planning.

The wrong answer: "I'd invoice for the full $60,000 and record the $42,000 as a partial payment." This approach overstates income in Year 1 (showing $60,000 recognized when only $42,000 was received) and creates inaccurate job-level margins.

Why this matters: ACV/RCV staging errors are the most common source of income misstatement in restoration companies. They create phantom income in some periods, understated income in others, and tax exposure that can be significant. See What Restoration Bookkeeping Actually Means for the detailed treatment.

Question 3: Supplement Tracking Process

Ask: "How do you track supplements — and what's your process for making sure approved supplements get collected?"

What you're looking for: A systematic log with specific fields and a monthly reconciliation process. The right answer describes:

A supplement log that tracks each supplement by job, with submission date, amount, status (submitted / under review / approved / paid / denied), approval date, and payment date
A monthly reconciliation of the supplement log against actual payments received in QBO
A follow-up workflow for supplements that are approved but not yet paid (following up with the carrier, confirming the check is in the mail, escalating overdue supplements)

The wrong answer: Any version of "we track it in the notes" or "we follow up when the carrier pays." Passive supplement tracking — waiting for the carrier to pay rather than actively managing the collection — is how approved supplements go uncollected for months.

The stat that puts this in context: When we onboard a new restoration client with no prior supplement tracking system, the average approved-but-uncollected supplement backlog is $38,000–$54,000. That's not disputed supplements or supplements under review — it's supplements the carrier approved and the restoration company simply hasn't collected. Systematic tracking is the only way to prevent this. See When Supplements Disappear Between Xactimate and QuickBooks.

Question 4: Two-Party Check Handling

Ask: "How would you handle a two-party check — a carrier check made out to both our company and the insured's mortgage holder?"

What you're looking for: Immediate recognition of what the question describes, followed by a clear process:

A two-party check requires both named payees to endorse before it can be deposited
The standard process for getting the mortgage company's endorsement: mail the check to the lender with a cover letter, or arrange for a wire/bank-to-bank transfer in states where that's permitted
The bookkeeper should note that this delays cash receipt by 2–6 weeks and should be tracked separately from standard carrier payments in the AR log
Some bookkeepers will add that notifying the client proactively about the two-party check process reduces the friction when it happens

The wrong answer: Confusion about what a two-party check is, or treating it as a standard carrier payment. A bookkeeper who says "I'd just deposit it like any other check" has never processed a two-party check — which means they've never worked in restoration at scale.

Why this comes up: Two-party checks are the norm for insured losses on mortgaged properties — which is most residential restoration work. If your bookkeeper doesn't know how to handle them, you're going to have delayed cash receipts and carrier payments sitting in a queue waiting for a process that doesn't exist.

Question 5: WIP Schedule Capability

Ask: "Can you produce a WIP schedule by job stage — and what inputs would you need to build it?"

What you're looking for: A clear description of what a work-in-progress schedule is and what it requires:

A WIP schedule tracks all open jobs with estimated contract value, costs incurred to date, percentage of work complete, revenue earned to date, revenue billed to date, and the over- or under-billing position
The inputs needed: job cost data from QBO (labor, materials, subcontractor costs by job), the Xactimate or scope estimate for each open job, and the completion percentage (which the field team typically provides)
A sophisticated answer will note that the WIP drives revenue recognition adjustments for jobs in progress — over-billing (billed more than earned) is a liability; under-billing (earned more than billed) is an asset

The wrong answer: Not knowing what a WIP schedule is, or describing a basic open-invoice aging report. "We track open jobs in QBO" doesn't describe a WIP schedule.

The calibration: Not every restoration bookkeeper produces WIP schedules — this is more common at larger volume operations ($3M+) and required for companies pursuing bank financing or preparing for sale. If your company is under $2M and not actively pursuing either, a bookkeeper who can't produce a WIP schedule today but understands the concept is acceptable. A bookkeeper who has no idea what WIP means is not ready for a $3M+ restoration operation.

The Interview Checklist

Image coming: Clean interview checklist showing the five questions to ask a restoration bookkeeper candidate: (1) Xactimate revenue workflow — can they describe ACV invoice, holdback tracking, and RCV trigger; (2) ACV/RCV staging in QBO — can they describe two separate accounting events with correct period treatment; (3) Supplement tracking — do they describe a systematic log with monthly reconciliation; (4) Two-party check handling — do they know it requires dual endorsement and describe the process; (5) WIP schedule capability — do they know what WIP is and what inputs it requires. Scoring guide: 5/5 = specialist; 3-4/5 = competent generalist who can be trained; below 3/5 = not ready for restoration

The five-question checklist for vetting restoration bookkeeper candidates. Screenshot and use it in your next interview or provider evaluation call.

Scoring the answers:

| Score | What It Means | |---|---| | 5/5 specific, accurate answers | Genuine restoration specialist — hire or engage | | 4/5 with one gap | Strong candidate; clarify the gap and assess trainability | | 3/5, stronger on 1–2 | Competent generalist who may develop; lower bar for lower-volume operations | | Below 3/5 | Not ready for a restoration operation at any revenue level |

Weight questions 2 (ACV/RCV staging) and 3 (supplement tracking) most heavily. Errors in those two areas are the most expensive in practice.

What to Do With the Answers

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If you're evaluating candidates and none of them answer these questions well, that's useful information too: it tells you that the talent pool in your market for in-house restoration bookkeeping is thin, and that an outsourced specialist may be the more reliable path.

If you're evaluating outsourced providers, ask to speak to the person who would actually handle your account — not the account manager — and run them through the same five questions. A genuine specialist firm will have staff who answer fluently. A generalist with a restoration-sounding name will struggle by question 3.

If your current bookkeeper is handling your books and you haven't asked them these questions yet — ask them. The answers will tell you quickly whether you have a specialist or a generalist, and whether the gaps in your books are structural.

The most common finding when restoration companies transition to a specialist: significant supplement backlog, ACV/RCV staging errors across multiple periods, and TPA fees not coded against program revenue. All detectable in a 30-minute audit. All preventable with the right person in the role.

For context on what those errors cost, see The Hidden Cost of Generic Bookkeeping for Restoration Contractors. For the complete profile of what a specialist bookkeeper does, see The Complete Guide to Bookkeeping for Restoration Companies.

Frequently Asked Questions

Can I ask these questions by email before a call?

Yes — and it's efficient. Send the five questions in advance and ask for written answers before scheduling a conversation. The quality of written responses to questions 2 and 3 (ACV/RCV staging and supplement tracking) is a reliable filter: specialists write specific, detailed answers; generalists write general ones.

What if the candidate has restoration experience but not QBO experience?

QBO can be learned relatively quickly by an experienced bookkeeper. Restoration workflows take 6–12 months to develop through actual practice. Given the choice between a QBO expert with no restoration experience and an experienced restoration bookkeeper using a different platform, the restoration experience is more valuable — and QBO is learnable on the job.

Are these questions appropriate to ask outsourced providers too?

Yes — and it's arguably more important for outsourced providers, because you have less direct oversight of their work once engaged. An outsourced firm that can't answer these questions from their own staff has restoration-branded marketing but generalist execution.

What other questions should I ask beyond these five?

The five questions above test knowledge. The additional questions test operations: What date do you commit to delivering the monthly P&L? What's your backup if my primary bookkeeper is out? How do you handle corrections when you find an error? What does your monthly client communication look like? The operational questions reveal whether the service functions like a specialist practice or a one-person generalist shop with a nice website.

What if my current bookkeeper fails these questions?

Have an honest conversation. Share the questions and give them the opportunity to build the knowledge — with your support. If the gaps are in supplement tracking and ACV/RCV staging, those can often be corrected with focused effort over 60–90 days, assuming the underlying QBO structure is sound. If the bookkeeper isn't willing to engage or can't develop the workflows, that's a different conversation. See Why Restoration Companies Need Specialized Bookkeepers for context on the specialization gap.