As a small business owner you need to know how to get the most out of your bookkeeper. If handled properly your bookkeeping system can be a tool that you can use to make decisions and grow your business. In order to have a bookkeeping system that you can actually use you need to know what you need. Here are five things I would demand from my small business bookkeeping system.
Reconciled Books On A Regular Schedule
A good bookkeeping system starts with the basics; reconciling QuickBooks. Reconciling your accounts is the only way that you can be sure you are looking at accurate and up to date financial information. You also need to make sure you reconcile all of you accounts, not just bank accounts. Any account that has a statement with a starting and ending balance can be reconciled. Examples of accounts that can be reconciled are bank accounts, credit cards, loans, lines of credit and payroll liabilities. Make sure your books are being reconciled on a regular basis and let your bookkeeper know your expectations. You may even want your accounts reconciled on a daily or weekly basis to help manage cash flow.
Clean AR and AP
I would definitely be sure that my bookkeeper was keeping accounts payable and receivable accurate and clean. If you have late payments going to vendors you will only create problems. Unhappy vendors may penalize you with late payment fees or refuse to do business with you. Likewise you want to make sure you are keeping on top of your accounts receivable. As you receive payments you want to make sure they are posted to the proper customer’s account and invoice. You also want to make sure you regularly follow up with any customers that have outstanding invoices. Maintaining a clean AR will keep cash coming into your business, which can be crucial for the small business owner.
Tight Cash Flow
Cash flow is pretty important for most businesses, but especially for the small business owner. Not only do you have your own business and family to worry about, but your employees as well. Keeping a healthy cash flow position can be difficult for a small business, which is why tight accounts receivable procedures are so important. By performing QuickBooks daily reconciliations you should be able to get a very good handle on your actual cash position. Also, by printing checks, keeping customer payments updated and using QuickBooks memorized transactions to automatically post recurring automatic payments you will get a good feel for your true cash position. I feel that if you are on top of your bookkeeping you should be able to see a QuickBooks cash position that matches your online bank balance, but also your actual cash balance which shows your outstanding payments and deposits. Having this level of detail on your actual cash position can prove invaluable to the small business owner.
Custom Financial Reporting And Analysis
Another item I would require from my bookkeeping system is good financial reporting and analysis. I would want to see more information than just a basic balance sheet or profit and loss. I would make a list of several reports that you want to see on a regular basis and make sure that your bookkeeper is delivering them on the due dates. Looking at financials compared to previous years or periods can offer valuable insight into your businesses financial well-being. I would also want to develop a financial forecast and budget and hold my team accountable to that budget. Comparing actual financials to your budget will keep your business on track so that you meet or exceed your goals.
Recommendations On Making Things Better
The last thing I would demand from my bookkeeping system is that my bookkeeper always be looking for ways to make things more efficient. Even small improvements like using memorized transactions or printing checks from QuickBooks can make a big difference. Maybe you want to move your bookkeeping file to a QuickBooks cloud hosted solution. You can look into bill pay systems that will automatically link your QuickBooks file with your banks bill pay system. Maybe your bookkeeper can find a way to download your daily sales reports from your POS system directly into QuickBooks. Often time’s payroll data from your outsourced payroll company can be downloaded into QuickBooks. The bottom line is your bookkeeper should be keeping up with technology and making suggestions to improve your bookkeeping system.
Many business owners are not demanding enough of their bookkeeping system because they don’t know what they want or don’t know what to expect from their bookkeeper. You should raise your expectations of your bookkeeper and get the most you can out of your accounting. Often times a bookkeeper may know more about the financial aspect of a business than the owner does so don’t be afraid to ask them for advice.
