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Time And Money To Fix Your Bookkeeping, But Not Do It Right

Time And Money To Fix Your Bookkeeping, But Not Do It Right

| 3 min read

I have noticed that small businesses typically have the time and money to fix their bookkeeping, but neither when they are first setting up their bookkeeping.  This article was inspired when I read a quote from Seth Godin posted on Hubspot's blog.  If you scroll down to #14 you will see Seth's quote: "Well, if you don't have time to do it right, what makes you think you'll have time to do it over?" This resonates with me on so many levels.  When I was growing up, my dad always used to say in a harsh Massachusetts accent and sometimes slightly angry, "Matthew either do it right the first time or don't do it at all!"  That has stuck with me into adulthood.  Half-assing something is a waste of time and therefore counterproductive.  When small businesses are setting up their bookkeeping most won't take the time or money to set it up properly from the beginning.  However, when it comes time to fix a bad bookkeeping system there is always time and money and here is why.

Felt the Pain of an Audit

Prospects will often approach us about outsourced bookkeeping services after they have felt the pain of an audit or tax issue.  Sometimes clients will come out of an audit unscathed and other times with a big bill.  Either way, after going through the painful process of an audit most people want to avoid one in the future.  Other clients may file for a tax extension thinking that doing so will eliminate penalties and interest.  Unfortunately, filing for a tax extension only extends the filing due date but not the payment date.  Therefore, they get hit with a big penalty, an interest payment and a wish to never endure that in the future.   

Need Money

Businesses are also willing to fix their bookkeeping mess if they were recently denied funding by a bank or a private investor.  No bank or investor is going to give you a dime without accurate historical financial data and financial forecasts.   It is important to keep your bookkeeping investor ready, regardless if you are seeking funding or not.  You never know when you are going to need or want funding so keep your books ready for either in case the need arises.   

Someone Stole Money

I can't tell you how many stories I hear about bookkeeper fraud.  We often get called into situations where a bookkeeper, employee or business partner has stolen from the business.  Business owners that have been stolen from want to make sure it never happens again and they are willing to pay a premium for the correct bookkeeping system.  We help design bookkeeping systems with the proper procedures and controls to ensure that nobody is stealing from you.  A simple step like setting up QuickBooks users with different levels of access is a good place to start. You also need to put a system in place for handling and depositing cash that has the proper checks and balances.

Lastly, you should never fully outsource all of your financial functions, especially when it comes to money movements.  Your bookkeeper should never have the ability to transfer funds, sign checks, or handle other critical bookkeeping tasks that open you up to theft.  Make sure to set up your bookkeeping system with the proper checks and balances to ensure nobody can steal from you. 

Bookkeeping Not Adding Value 

Many business owners complain that they don't get any value from their bookkeeping and that is why they don't want to waste money on it.  Typically bookkeeping systems that don't add value are set up and handled by someone that is not a professional in the field, like a family friend or an owner that believes they can do it themselves.  As a small business owner it is critical that you be able to use your bookkeeping system as a tool to grow your business.  We pride ourselves in setting up customized bookkeeping systems that meet our clients' specific needs and add value to their businesses.  It takes a thorough understanding of QuickBooks, bookkeeping processes and general business knowledge to add value to a business through the bookkeeping.  You have to identify what information you need to run your business and tailor your QuickBooks bookkeeping system to satisfy those needs.

Most business owners will not invest the necessary time or money to set up their bookkeeping correctly the first time.  When you are starting a business and not making much money bookkeeping seems like an unnecessary expense to incur.  However, a solid bookkeeping system that is set up correctly from day one will pay for itself time and time again as your business grows.

Learn 8 Reasons you should Avoid Year-End Bookkeeping!

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