The books of your business are the most powerful level of control and information in your entire organization. They’re more important than the keys to your office, and exercise control over more parts of your business than anything else. Your books show the profitability of your company, and will reveal the almost imperceptible hints of failure months before actual catastrophe strikes. Your company’s books are the gateway to your clients and their finances – their accounts, credit cards, and claims. They hold the payroll of yourself and every employee you have.
And yet so many people hand this responsibility over to the lowest bidder overseas, or a 3-hour-per-week temp employee whom they’ve never vetted, or an administrative employee…simply because the head of the company “doesn’t know accounting”. If this describes you, this article is here to empower you to take the reins of your business again and see the benefits of DIY Bookkeeping, and the perils of not.
How Handing Over Your Books Hurts You
Bookkeeping is entering and checking the daily/weekly/monthly transactions of your businesses. This means customer invoices, credits, expenses, credit card statements, running payments, cashing checks, depositing funds, bank statements, and much, much more. These transactions are the lifeblood of your business. When something goes wrong, it goes wrong here and trickles through the system. If a vendor overcharged you, you’d find it here. Are warranty claims slipping out of control? You’d find that info here 9 months before it becomes a real problem. Of course if you aren’t monitoring the books at a transactional level, you wouldn’t know these things. Looking at the Profit and Loss report every month just tells you what happened….it doesn’t tell you what’s happening. When you don’t enter these transactions, or at least understand them and monitor them closely, you’ll find people get overpaid, warning signs go ignored, and sometimes you’re even doing something that exposes you to an audit. There is a way out, though – and it’s not as hard as you think.
How to Become a DIY Bookkeeper
We might now be on a sticking point: you agree that your company’s books are incredibly powerful, and releasing that control to someone else (a non-executive) makes you extremely vulnerable – but you still don’t have the time to enter these transactions, and you still don’t understand accounting. That’s OK – there’s a solution.
Start by learning practical, no-nonsense accounting by buying this amazing book. I’ve personally read this book, and can recommend it to anyone starting out. It teaches you accounting in a fun (yes, really), practical way that you’d actually use for business. There’s no extra junk – just the info you need.
Next, start using standardized accounting software. I recommend Quickbooks, for reasons I’ll explain next. I’ll be the first to admit it’s not the absolute best – and once you grow, you’ll want something better – but if you’re small enough, this is probably the best software out there. Why? It’s what everyone uses – and that’s worth a lot. Your bank, credit card, and payroll will sync with it, because Quickbooks is absolutely ubiquitous. You can Google any problem you’re having, and someone has written about it. Simply put, Quickbooks is the best because everyone else is using it, so you have a huge support structure.
Now that you know basic accounting and you’ve bought Quickbooks, use the automated features in the software to save you time. You don’t have time to enter all your bank and credit card transactions. Quickbooks is great at importing these – all you have to do is error check. Don’t have time for payroll? Use their fully managed payroll service. By leveraging these services, you’re still keeping everything within your control, but not wasting time. And you’re saving money by ditching that outsourced bookkeeper.
Reap The Benefits
This new way of doing things will be tough for about 3 months, but after that, it’ll become routine and easy. More importantly, I’d be willing to bet you’ll find at least one wonky transaction that will save you money that your bookkeeper wouldn’t have found – maybe a vendor overcharged you, or your card was run twice, or the bank made an error. It happens all the time – only now, you’ll know. The biggest gain of all, though – the thing you won’t notice until about 6 months, is you’ll have a Neo-in-the-Matrix-like sense of your business. If anything is going up or down, you’ll know well in advance and can take steps to keep your business ahead of the curve. The benefits of this can’t be understated. Have fun learning DIY bookkeeping, and enjoy regaining massive control and insight at your company.
