By November 22, 2021
One of the most common questions I get is “Why do I need a bookkeeper?” It’s usually accompanied by a “I can do it myself or have a friend help me for less.” I recently had a client I helped that demonstrates exactly what I do and how it helps. I won’t include their name, or any identifying information, but I want to share with you how the work I do impacts their business.
What a Disaster Looks Like
I don’t call errors a disaster lightly. A disaster means major problems. When I got my first glance at this set of books, I was shocked that they were still in business. There were a ton of weird transactions that didn’t make any sense. The books had got to the point where they were affecting the taxes. The file was too broken to repair, so I had to start a new file. But the problems with the books hadn’t stayed on paper. The owner didn’t know anything about his income, his sales tax collection, or the state of his bills. And he couldn’t track his expenses in parts or labour. Overall, revenues were trending down drastically.
The Problem and How to Solve It
Bad bookkeeping affects your whole business. It keeps you from tracking and controlling your expenses. You won’t be able to make adjustments to be more effective if you can’t measure your costs. In this case, not knowing the state of his business, kept this owner from being able to budget and keep his costs under control. And his taxes would end up costing him more due to fines and fees.
After I had reviewed his books, I started him on a new file to ensure that none of the problems from the old file were present. I also brought his books into the cloud where they would be easier to access and consistently backed up. You can use a tool like QuickBooks Online to do this for your own books as well. I taught him how to send the information to me so we could organize his books properly and categorize his expenses accurately. I also instituted monthly reviews to keep him aware of the state of his books and to help him make better decisions for his business.
Success Takes Consistency
Because we implemented the right systems and set him up for success. We were able to get him back on track. As of this year, he is on his way to hit his highest revenue ever. He is organized and can analyze what is happening in his company so he can make better decisions and adjustments to keep on track. And he’s able to grow his business and look at expanding. The difference between success and failure was the organization of his books.
I’m not saying that every case will be like this client’s. Every set of books brings unique challenges. But fixing your books is a key step to understanding and growing your business. If you want to know how a bookkeeper can help your business turn difficult times into opportunities, I would love to speak with you about your circumstances.