There’s no doubt that one of the things most small-business people dread doing is their books. Finding receipts, assembling invoices, putting together spreadsheets – it’s far from what business owners and managers want to be doing with their day. Not only is it a time-consuming process to keep financial records sorted out, it’s also one that the average person struggles with because they don’t know the ins-and-outs of what’s required for every transaction and document.
The flip side to this is that when a business takes care of all those slips of paper, the transactions, invoices and financial details, they are more likely to have a smooth running business without interruptions from the tax man. Where this positive result of taking care of the paperwork gets even better is when it comes time to sell the business, or use it as collateral for financing. You see, an accurately financially-managed business is worth far more than one that keeps records in shoeboxes stacked on a shelf. Plus, by keeping those accurate records, it’s far easier to see the true value of the business.
Create a System
If you aren’t a graduate of a bookkeeping course or bookkeeping program, you’re not likely to easily take to the action of keeping your records straight. Whether you have a bookkeeper on staff, on contract or are managing the process on your own (which we don’t recommend), you’ll want to start by establishing a process or system that keeps things in order.
Not only will the system give your bookkeeper the information they need to do their job more easily and efficiently for you, it will also make it easier for you to enter information and find details you are looking for in the future. In today’s electronic age, it’s fairly easy to set up a bookkeeping entry system. It doesn’t have to be complex, it simply needs to work well for everyone using it.
For some, this may mean an Excel spreadsheet, while others may use Quickbooks and still others might have more complex programs that allow for scanning and categorizing of receipts. The method isn’t as important as the ability for everyone using the system to understand how it works and why they are using it. With the volume of software options available, it’s important that both the business professional and the bookkeeper know and understand the system once it is up and running. If your bookkeeper prefers one system, but you struggle to understand it, it may be appropriate to look for another system or perhaps another bookkeeper.
Having a system in place and a trusted bookkeeper on staff or on contract will always add value to a business when the proof of accuracy is obvious.
Make Updates Regularly
No system in the world can keep you on top of things if you don’t use it. It’s easy to establish a system one day and say you’re going to use it. It’s not so easy to stay on top of the regular updates. These tend to slide off the desk with other tasks “that can wait” and never get done until the point that they are overwhelming, or it’s tax time.
Make a commitment to enter receipts and transactions on a daily or weekly basis so that entry doesn’t take hours. If you find this is simply unrealistic and no one is able to manage the regular updates into the system, consider bringing someone who has taken bookkeeping programs onto the team on a contract or part-time basis to manage the data entry.
The upside of this is that you end up with a trained professional on your team who is involved in the bookkeeping process from start to finish. It will make their job easier when they start preparing financial reports and doing other forms of reporting and analysis and it will free up your time from something you probably dislilke. This also adds value to a business. Consider the impression it makes on a potential buyer or a business banker if they know there is a professional bookkeeper on retainer, contract or staff. It immediately gives the impression that the business is being taken care of financially.
Use the Skills of Your Bookkeeper
Many small business owners don’t know where they stand in their business financially. A professional who has taken bookkeeping courses online or in person will have the skills and abilities to help determine the financial picture of a business on a day-to-day basis. These professionals can help reconcile accounts more regularly to spot any errors or issues in the reporting process before they become a problem. They can develop valuable financial reports beyond what is required by the CRA or year-end purposes. If you determine the things that are key in your business to know (accounts receivable turnover, inventory levels, top-selling items, etc.) your bookkeeper can create the customized reports that will give you the specific information you need to run your business better.
Once again, it can’t be overstated how something like this adds to the value of the business. When others see customized reports that are based on the specifics of how the business runs, they know managers are fully-aware of the key metrics of their business and know the areas that are most important to its financial success.
Find the Right Professional
Your goal as a small business owner or manager is to create and continue a successfully-running business. This not only keeps the business thriving, but also increases its value in the eyes of potential buyers and the market. Finding a partner who can take on bookkeeping tasks and keep the business on the right path to financial certainty is an important element.
Look for professionals who are accredited by the Canadian Bookkeepers Association and hold a Bookkeeping certificate from their education institution. If finding the right person through online job boards isn’t the right thing for you, contact schools that teach bookkeeping programs to determine high-performing recent graduates and students who are near completion of the program.
Because the majority of schools that offer a bookkeeping certificate program ensure their staff have the background and skills to be great bookkeepers themselves, they are quick to identify the promising individuals you’ll want as part of your business team.