Many business owners have the mindset that they don't want anything to do with the bookkeeping process of their business. They find it to be a nuisance and a waste of time. However, ignoring your business bookkeeping altogether is the equivalent of running your business blind. Neglecting your bookkeeping leaves your business vulnerable to theft and fraud as well as possibly exposing you and your business to tax related problems down the road. I understand why many business owners dislike bookkeeping. Many owners hate the task of bookkeeping, while others see it as time they could spend growing their business. However, if you set up your bookkeeping processes correctly you can stop handling your day to day bookkeeping but still remain in control of your business finances.
Find a bookkeeper
Step one to removing yourself from the day to day bookkeeping tasks is to find a bookkeeper. You can either hire an in-house bookkeeper or consider an outsourced bookkeeping service. The choice of going internal or outsourced would depend upon your needs and preferences. Do you need a full time or part-time bookkeeper? Can you afford a full time in house bookkeeper? Do you need someone in the office or can they work remotely? A few things you will want to look for no matter which direction you choose to go in are:
- You will want your bookkeeper to act in the best interest of your business. Your bookkeeper should act like a business partner, not an employee.
- You want your bookkeeper to be honest and trustworthy.
- You want to find an educated and possibly certified bookkeeper.
- You want to enjoy working with your bookkeeper.
Empower don't over power
You certainly want to empower your bookkeeper so the job gets done, but you definitely do not want to give your bookkeeper too much power. If you give your bookkeeper too much authority in your bookkeeping process then you expose yourself to fraud and bookkeeper theft.
Your bookkeeper should be able to:
- access your financial statements in view only mode
- access certain aspects of your accounting system but not all
Your bookkeeper should never be able to:
- move money on your behalf
- pay bills or sign checks
You certainly want to have your bookkeeper be a huge part of the bookkeeping process you just don't want to give them too much power. It is important as a business owner to always retain certain tasks within the bookkeeping process. Not only does it reduce the chance of theft, but it keeps you involved with your business finances so you are aware of what is going on at all times.
Hold everyone accountable
Holding everyone accountable in your small business is absolutely crucial to its success and your bookkeeper should be no different. Make sure you set clear tasks, expectations and goals with your bookkeeper. If your bookkeeper does not meet or exceed your expectations you should communicate that to them. It is incredibly important that you are getting what you need out of your bookkeeper as well as your bookkeeping system. Staying involved with certain aspects of the bookkeeping process will keep you aware of what is going on. You should also be sure to request financial reports on a regular basis and analyze them often.
As a business owner I totally understand that you want to focus on other aspects of your business rather than your day to day bookkeeping. However, you don't want to step out of the bookkeeping process completely or you will lose control of your finances. Instead delegate certain bookkeeping tasks to your staff and stay involved with your bookkeeping by handling the most important tasks of the process. This will allow you to separate yourself from the bookkeeping system but also remain in control of your finances and your business.