Bookkeeping is Not for the Back Burner
You’re a small company. You don’t have to worry about things like:
- Numerous inventory product & service items
- Numerous daily sales, receipts, & receivables
- Numerous vendor bills
- Lengthy monthly reconciliations from bank, credit cards, and other assets & liabilities
- Complicated business tax forms
- Payroll liabilities
Do you really need to hire outside help to track your company’s financial numbers?
The more your business grows, and depending on your industry, it may be a daunting task for you to work through the complexities of your bookkeeping. Many people put bookkeeping on the back burner, and wait until the end of a tax year (or two or three) to get serious about maintaining their books. This decision to wait carries the requirement of tracking down all bank statements, registers, receipts, etc., and maybe even hiring an emergency temporary bookkeeper (at a premium because it is now tax season). Some people will choose to take this scrambled box of mess to their CPA and pay (again, a premium) for them to deal with it.
One solution to this madness is exemplified by one of my clients. This method of keeping his books on the front burner is called aggressive internal managerial accounting. Not only does he keep his books on the front burner, but he watches and stirs to make sure nothing burns or boils over. In other words, he intensely tracks his revenues and expenses based on each business decision made, such as product line, certain inventory and operating expenses from certain vendors, and various marketing tactics and venues. He always tries to reach a certain profit margin and always knows each month whether or not he has achieved his goals. This client worries about every item in the list above, because he understands how his daily decisions will impact his profitability.
Still, the client may need outside expert help for three reasons:
- He may need help crunching the numbers.
- He may need to know how to correctly crunch the numbers.
- He may need periodic interpretation of those crunched numbers.
Not all of my clients need help in all three areas, but in order to be profitable and successful, every client needs to have an understanding of how their daily, weekly, and monthly numbers result from their past business decisions. The investment in a quality bookkeeping system will not only save headaches, but will keep you ahead of your numbers with information to help you make sound business decisions.
Still have questions? Email them to firstname.lastname@example.org. We are happy to help!