With both of us in mind… the website and blog has been revamped, redesigned, rewritten, relocated and ….relaunched!
Revamped & Redesigned from this…
To this…
Rewritten…there’s tons of new content and new blog posts so explore.
Relocated…with tons of online real estate, there is plenty of room to grow.
Relaunched…hope you enjoy it and visit often!
Disclaimer: This started off as part of a weekly roundup but as I was writing the excerpt/summary for it, it took on a life of it’s own. Enjoy ~Joyce~
Quote of the Week:
“I knew how to print a financial statement from QuickBooks, but I couldn’t tell you what it meant,” from Basics of Accounting Are Crucial for Entrepreneurs – NY Times
It is my philosophy that just because you can do something, that doesn’t mean that you should! Just because Quickbooks, Peachtree, Xero, and on and on and on… allows you to do the bookkeeping and accounting yourself, it doesn’t necessarily logically follow that you should be doing the bookkeeping and accounting.
Now, don’t get me wrong. I am an huge advocate of being self-aware, empowered, doing things for yourself and, extremely important, taking responsibility for the financial health of your business but I’m not an advocate of keeping my valued clients in the dark. We all have the same 24 hours in each day. If that time is better served becoming more proficient at your “front-office” stuff… you know the thing that you do, that thing that you provide to your clients/customers… then you should be doing that – instead of the bookkeeping, especially if you’re not at all interested in learning the ins and outs of accounting (because there are just a few of those to learn).
Food for thought: if accounting was so easy, why do most accountants attend a 4year college to obtain the knowledge that you presume to buy in a box off of a shelf? And why is the CPA exam consistently listed as one of the most difficult exams (ahead of the bar exam and some engineering certification exams)?
Anyway, stick to or pursue what you love. “Do a job that you love & you’ll never work a day in your life” ~Confucius.
Agree? Disagree? Let me know – I’d love to hear from you.
I was sitting here cooking up new and improved marketing strategies for my business (and an accompanying action plan) when the curiosity bug hit me. I began wondering what other folks are doing, folks like you – Mr & Ms Reader… what are you doing to ‘fill your funnel’…
So you started a business and as a solopreneur, you were many hats. One of those being the hat of the bookkeeper/accountant aka the keeper of the checkbook. What’s so bad about that…all you have to do it balance your checkbook, right? WRONG!
I’ve seen it time and time again. Entrepreneurs skipping the necessary step of hiring a bookkeeper or accountant (or accounting firm) to monitor their business finances in an effort to save money. What they don’t realize is what they save in the short term is probably costing them much more than in time, effort, and fixing mistakes in the long term (especially when its the tax preparer/CPA that is fixing those mistakes later).
Here are a few common bookkeeping & accounting errors that small business owners make when they go it alone:
Mistake No 1: Treating sales as revenue before the product or service is delivered. Why it’s a mistake: Not only is it contrary to “revenue recognition rules” (ask an accountant what that means or Google it) but..”Great sales in a month that will be delivered to the customer later…can give a company a false sense of profitability”
Mistake No. 2: Not considering the financial ramifications of a large purchase, such as equipment. Why this is a problem: Dipping into your cash reserves can have long-term consequences if you aren’t adequately covered to pay your day to day or month to month fixed expenses (or if something breaks – and something always breaks, right?) Consider taking out a short-term loan to pay for the large purchase over time or consider leasing the equipment.
Mistake No. 3: Confusing PROFITS for CASH FLOW. Why this is a problem: Business owners need to learn how to read all of their financial statements – instead of depending on one. Your Income Statement may contain several “non cash” items that my lead you to believe that you have more spending power than you really do. So it is important to read it in conjunction with your Balance Sheet and your Cash Flow Statement to get a truer picture of the financial health of your organization and evaluate what your spending power really is.
When you started your business, I’m sure you had no idea that you’d have so much to learn and so much to do. But don’t give up…just like you are good at what you do and have a passion for it, there are tons of professionals out there that are ready and able to exchange expertise with you so that you don’t have to go it alone.
Until next time… Live long and prosper. (ha…sorry, I was in a groove & that just seemed appropriate).
Don’t forget to post a comment and tell me what you think!
Related Links/Source:
Three Common Accounting Mistakes via Entrepreneur.com
If you’ve heard of Virtual Assistants and understand the concept, then Virtual Bookkeeping/Virtual Accounting is not too far from that. The main difference is the area of specialization – instead of administrative tasks, the tasks outsourced are of a bookkeeping and accounting nature.
Who should care about virtualization? YOU, Mr & Ms Small Business Owner. Why should you care? LEVERAGE. Outsourcing to a service provider can give you the leverage, the leg up that you need and help put you on equal footing with bigger companies. Think about it, big businesses have been doing it for years (leveraging and centralizing their resources). Big businesses may have satellite locations all over the state, all over the country, all over the world but they have a centralized location that handles certain “global” business functions such as marketing, advertising, and accounting at the “corporate office”.
So what’s the difference between outsourcing (small business) and centralization (big business)? To be honest, if you give it some thought and consideration, there isn’t much difference at all – except the numbers – the number of people employed and the dollars available to spend. How can you leverage and use this big business model of operations to your advantage as a small business owner? Use economies of scale. Think about it…it’s less expensive to share an accounting department with other small business owners than it is to create, manage and maintain one in-house. When you hire a virtual bookkeeping and accounting service provider, that’s exactly what you’re doing – sharing an accounting department with other small businesses. And, let’s take it one step further – in most cases, hiring a service that will function as an ENTIRE department is less expensive than employing ONE bookkeeper! Providing you with MORE experienced professions for LESS money…more bang for your buck, talk about LEVERAGE. Don’t believe me? Give me a call and I’ll SHOW you the numbers…
Agree? Disagree? Have questions? Post a comment…I look forward to hearing from you and reading your comments.
Image Credit: Filomena Scalise/FreeDigitalPhotos.net
