By August 8, 2022
Whether you are relying on a professional for help or trying to do it yourself, now is a good time to check your bookkeeping. Whether you are just checking in with your bookkeeper or reviewing your own bookkeeping, taking the time to review your books can save you a lot of time and pain come tax season. With that in mind, here are a few of the questions you should ask when reviewing your books.
Am I Wasting Money in Any Area?
Budgeting money is one thing. Following that budget is a different challenge. And sometimes we aren’t even aware of where we are spending money until we review. In personal finances, you may go to McDonald’s multiple times a week, but not notice how much you are actually spending on it. And in your business small trickles of misspending can add up to a whole stream of wasted money. It’s better to catch those early and save yourself a ton of money.
Where Am I Spending the Most Money?
Something you need to know is where you are spending your money. Are you buying a lot of certain parts? Are your labor costs higher than expected? If you are overspending in an area, you won’t know unless you ask where you are spending your money. If you find you are buying a certain part more often, you might be able to reduce the cost by buying more of that part.
Where Can I Save Money?
As a small business owner, you understand that making small adjustments to your business as you go is the key to keeping your business profitable. Looking at your books is the only way to find the trends that will help you save money. One area to keep in mind is your subscriptions. Subscription based service models are everywhere today, and many of them are hoping you will simply forget you have the subscription. Unless you are looking at your books you won’t necessarily remember what your subscriptions are and how much you are actually using them. This is one of the easiest places to save money but there are more that a bookkeeper can help you identify.
Have I Made Any Errors?
This is the hardest question because it’s hard to say whether you have made errors without having someone knowledgeable about errors to help you. Especially if you are doing your books by yourself, you need to catch errors sooner than later. This is where it’s a good idea to reach out to a bookkeeper for help. We are trained to catch common errors that would damage your books and put you in danger during an audit.
Don’t Be Afraid To Ask “Stupid Questions”
You’ve probably heard someone say that there are no “stupid questions.” Even if that’s not strictly true, if you don’t know the answer, not asking is far worse than looking foolish. Looking foolish only lasts a minute, but the mistakes you avoid by asking would last much longer and cause more damage to your reputation. That’s why I believe that asking questions in order to do your best is never foolish. So if you have any stupid bookkeeping questions, I would be happy to talk to you about them.