“Everything in my world matches” my new accountant said to me a month ago. That’s really funny I thought to myself, I am not even sure my socks match today. What a faraway world from my own I thought. How do I invite her to make my world & financial world match? Running even a small business takes some finesse with numbers. As a currently owner operate business I have two pieces of clarity to offer.
1) Hire and accountant that makes you think and is ethical
2) Hire a bookkeeper that keeps you honest and can produce records quickly. (Spending time saying “I know it is here somewhere either in a paper file or the computer is a madding waste of time!”).
Doing your own books is great if you enjoy it or if it is minimal effort. If on the other hand, you hate it, won’t get to it or will eventually end up turning over to an expert, do yourself a favor and do so from the beginning.
Here is the main question; can your bookkeeper or accountant do in 1 hour what it takes you 4 hours to complete?
It is simple math. Bookkeepers make about $25 an hour. If you are making $100 an hour why not go make the money to pay the bookkeeper instead of wasting your precious 4 hours to save money.
You just made $375. No, it is not always like that and true the more organized you are the less you have to pay the book keeper. But in this electronic age there is no more shuffling paper or getting any financial professional documents. Now you simply give your financial folks you logins, and passwords and they download everything for you. Scary?
It all comes back to exactly what you do with your clients, build a relationship. Your financial folks will see all your accounts to enter in the numbers anyway. You trust them with paper statements with account numbers, why not electronically. The people you have hired are trustworthy or they are not both formats of information provides the same access to records.
Start by getting referrals and references for bookkeepers and accountants in your local area and in your area of business. Ask for an interview to see if you are the right fit, do you understand them and do they understand your goals in hiring them. My present account said “the first meeting is free to see if you like me and I like you. “She is a tough cookie who loves numbers; I need that to keep me honest in my goals.
Ask about rates. Check to see if you do more toward organization will she charge less.
How your books should be organized. What type of software does she want you to use?
If you work with a bookkeeper. How would the accountant like your bookkeeper to send files or keep her up to date?
Same questions apply to bookkeeper.
Remember to think out what you are trying to measure. A profit and loss sheet give you something for the IRS but you may have other mile stones or spending habits you want to understand. Failing to plan means planning to fail.
Start the relationship long before you get to tax time or number crunch time for loans. Last minute requests are often more expensive. Develop the relationship so you know what to expect.
Money is only a tool. Set your goals and then find competent, honest people who can help you get there.