Today's article is a guest post from Melissa Bamfo a co-founder of Business Made Simple and her full biography is included at the end of the blog.
I meet a lot of business owners that have a small business bookkeeping system that just doesn't work. Quite often when we meet a business that is having bookkeeping issues their system has not been updated in quite some time and is full of errors. A lot of business owners hate bookkeeping and for good reasons; they have never had a bookkeeping system that adds value. Here is a quick guide on how to make your small business bookkeeping system work for you.
There are bookkeeping tasks that need to be taken care of no matter what time of year it is. Many people only do their bookkeeping once a year for taxes but that is the equivalent of running your business blind. The key is that you need to understand what bookkeeping tasks you should be worried about no matter what time of year.
Believe it or not, some small businesses simply don't need outsourced bookkeeping. Like all businesses, they still need bookkeeping just not outsourced bookkeeping. As a virtual bookkeeping firm, we have an ideal client and every once in a while we tell a potential client that we wouldn't be a great fit for them. The reasons can vary from anything technology driven all the way to company culture. We've learned it's better to be upfront with prospects earlier on in the sales cycle as opposed to trying to BS them and attempting to get a square peg to fit into a round hole.
One common complaint I hear from small business owners is that they don't get what they want from their bookkeeping system. There is a laundry list of reasons that small business owners claim their bookkeeping isn't valuable to them. Common reasons include: they think their bookkeeper sucks, they don't know how to get what they want, and or they don't see the value in bookkeeping. Some business owners know what they want from their bookkeeping, they just don't know how to get it. Here is a three step guide on how to obtain value from your small business bookkeeping.
Many small businesses fail to attack some critical tasks before year-end. Nothing is more frustrating than maintaining the bookkeeping for a small business only to see it go unused before year-end. Too many small businesses use their bookkeeping as a means to filing their tax returns and that is all. The major problem is many small business owners don't know what a solid bookkeeping system can do besides taxes. Once a business owner is shown how their bookkeeping can be used as a business tool they see a lot more value in keeping it updated. Don't let a great bookkeeping system go to waste; here are six big picture items to attack before year-end.
Just mentioning the word bookkeeping to many small business owners causes cringing and an instant headache. Most small businesses push their bookkeeping to the back burner because they don't get any useful information from their bookkeeping. Bookkeeping isn't sexy to many small business owners so they categorize it as a non-essential task. However, at some point in your career you will need your bookkeeping. You may need updated books to file taxes, apply for a loan or apply for a grant. Once you go through the feeling of needing your bookkeeping but not being able to satisfy that need you will never neglect it again. Here are a few ways to take the headaches out of your small business bookkeeping for good.
As far as I am concerned there are two options to get your bookkeeping done; do it yourself bookkeeping or outsourced bookkeeping. If you have some sort of accounting education and some relevant experience you may be able to tackle the bookkeeping yourself. If it has been a long time since Accounting 101 you may want to ask around your network to see how everyone else is handling their bookkeeping. While handling your own small business bookkeeping can save you money it can also cost you a lot of time. Additionally, if you don't know what you are doing and make mistakes it can be costly to fix those mistakes. Depending on your situation it may be more effective to use an outsourced bookkeeping service. Although an outsourced bookkeeper will cost you money it may actually save you money in the long run. You will be doing yourself a favor by hiring a bookkeeper to help you set up QuickBooks and your bookkeeping system correctly from the beginning. Maybe you can find a bookkeeping service that will offer QuickBooks training and support to help you learn to handle your own small business bookkeeping.
Many small business owners think that bookkeeping has just one role; a means to filing your taxes. Those business owners that have this mindset are missing out on many benefits that a solid bookkeeping system can offer. Small business bookkeeping often falls behind because it is so easy to push to the back burner. If you are not getting any value from your bookkeeping then there is no urgency to update it on a regular basis. Those businesses that are extracting valuable information from their bookkeeping make it a priority to keep the books updated regularly. So exactly what can a solid bookkeeping system do besides file taxes?
Most small businesses are great at procrastinating their bookkeeping until they really need something from it. Let's face it bookkeeping is pretty unattractive to most business owners. Bookkeeping is not sexy, it can be intimidating and for most people it is boring. Many business owners don't make bookkeeping a priority because they have not been shown how to use their small business bookkeeping as a tool to help them make better business decisions. Every once in a while a business will need something from their bookkeeping and it can be eye opening. Examples of when you might need an updated and accurate bookkeeping system are: applying for a business loan, trying to raise money, an investor meeting or filing your taxes.