One Way to Break It Down.

I get a call from a prospect who already has a bookkeeper, but the bookkeeper is moving out of town. Thankfully it’s going to be a few weeks before she leaves, so I have an opportunity to go in and see how she has already been doing things. The bookkeeping by itself is no problem.

we, as bookkeepers, have a pretty standard role which is easy to understand. Somehow the money coming in and the money going out has to be tracked. what’s not easy to understand is the philosophy by which the existing bookkeeping has been done. This is where there is a great variance from company to company. Depending on the size of the company, and the amount of profit, things might be kept track of very closely and other times maybe kept track of very loosely.

in my experience, the more profit a business is making the less they care about the precision of the bookkeeping. The thought being “hey, we’re making money here. So what does it matter?”

well, it matters a lot. At the same time when an owner doesn’t seem to be making quite enough money, instead of being hyper focused on the bookkeeping, which is what will make the most difference, they tend to not look at the books because they already know that it’s not pretty.

so back to my prospect. The bookkeeper has been doing a fine job keeping track of the books. But she hasn’t been talking to the CPA, so however the book you’re being capped is not going to be in line with what the CPA needs in order to get the best tax benefit for the client. On top of that I hear the CPA is behind by several months, telling me that the CPA is probably not the right person to be working with.

Finally I ask the most important question, “Is this business making any money? “. I look at the year to date profit and loss and see that the business is losing money, at least on paper. This doesn’t seem to concern the bookkeeper, But it concerns me.

so one way to break it down is to say from looking at the existing financial statements. this is the health of the business. Another way to break it down is just to ask the owner “how much money do you think you’re making every month?” Because most owners have an idea how much they’re making.

bookkeeping is not an easy business, if you are a bookkeeper with the intention of helping your businesses thrive. If your bookkeeping roll focuses primarily on recordkeeping then it’s a pretty easy thing to do. Where the skill comes in is in looking at the results of the recordkeeping and making recommendations on where the business should focus its attention, on where the owner should focus his or her attention. if your bookkeeper can’t answer the question “where should I be putting my attention?”, then it might be time to bring in an expert.

http://blog.soundbookkeepers.com/

At Sound Bookkeepers, we are not a regular bookkeepers that one finds. With dozens of bookkeepers available, background checks complete, references checked out, and experiences in hundreds of different business types, we’re one of the more competitive firms around. We don’t charge anything for the initial consultation which can be done over the phone. Our more than 15 years experience in forensic financial review makes sure everything we do goes toward increasing your cash flow and net income as well as reducing your tax liability. If we don’t save you time or money (or more likely, both), you don’t have to pay us. That’s how good we are!

Please visit us at SoundBookkeepers.com

206-794-3864

Over 15 years experience working with IRS, Dept of Revenue, and Employment Security. With our commitment to professional precision, Sound Bookkeepers guarantees complete satisfaction!