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Sunday, March 16, 2008
Who's Watching YOUR Money? 7 Tips for Hiring the Right Bookkeeper
While Im a strong advocate of hiring virtual assistants, there are two things that no entrepreneur should ever fully delegate: marketing and bookkeeping. The marketing and the bookkeeping of your business can easily make or break you (just think new Coke and Enron). That said, if bookkeeping is not your forte, hire someone to do it you will save so much in frustration just be sure to keep your fingers in the books.
If you choose to hire a bookkeeper, keep the following in mind:
1. Get QuickBooks.
For ease of use, I highly recommend using QuickBooks and hiring a QuickBooks ProAdvisor. QuickBooks ProAdvisors have taken certification exams to insure that they know the system. I have used QuickBooks both for myself and my clients since 1996 and highly recommend it for its ease of use/understanding.
The online version is great in that you can see the latest version of your books at any time and eliminate the annoyance of emailing files back and forth and wondering who has the latest version.
2. She must see both the forest AND the trees.
You want your bookkeeper to be detail-oriented AND to see/understand the big picture. She needs to know what happens consistently every month and update your books without bothering you for items she should know about.
At the same time, she needs to be astute enough to see the larger picture and warn you of any impending problems before they happen. If you purchase a piece of equipment, she should know how to properly enter it into your bookkeeping software to avoid problems and therefore save time and money with your accountant (and the IRS) later on.
3. She must know your industry.
You dont want to have to train your bookkeeper on your industry language, standard industry income or expense categories or other basics. The more up-to-speed she is, the faster she can hit the ground running and the sooner you will have good data. If she doesnt know your industry however, be sure to give her a rundown of lingo and how you refer to your customers/clients/tenants in order for you to get the most meaningful reports out of the gate.
4. She must provide timely reporting.
In hiring your bookkeeper, insure that you put in a provision for when you want to see monthly financials. The date will depend on when your bank month ends give her a few days after that date to reconcile your accounts and produce reports. At a minimum, you want to see a profit & loss, balance sheet and cash flow statement.
Take the time to review the reports so you can spot any irregularities before they blossom into problems. Not sure how to read a cash flow statement? Get a check/electronic funds transfer (eft or auto debit) transaction detail instead. It will help you see where the cash is going.
5. She must know accounting terms and still speak English.
Your bookkeeper needs to know the difference between assets, liabilities, income, expenses and equity and be able to provide your accountant with the necessary data upon request. At the same time however, if you are not numbers oriented, she also needs to be able to explain the financial statements to you in plain English.
6. She must be trustworthy.
Hiring someone to keep track of your bookkeeping requires a level of trust between you both. You need to feel comfortable that she will keep track of your information and maintain your confidentiality. At the same time, if she pays your bills and has access to your bank accounts, you must also trust that she will not abuse that privilege. And make no mistake, it is a privilege to have someone (particularly in a virtual relationship) trust you with their finances, their checkbook and their business.
Good business sense demands that you protect yourself just in case. I highly recommend that, in addition to a confidentiality agreement, you insure that your bookkeeper is bonded and you get a copy of that bond.
7. She must have great communication skills.
If your bookkeeper will be communicating with your clients and vendors, she must represent your business as you would. Whether virtual or in-house, its critical that your bookkeeper be a positive force that further enhances relationships. The question of money can, at times, be a sensitive matter. You need someone who recognizes that and communicates appropriately.
Always remember these are your books and this is your business. While you may hire someone to manage the details of tracking your finances, and should do so if this is not one of your strengths, the ultimate responsibility for oversight is yours. Michael E. Gerber of the E-myth series said it best: Delegate, dont abdicate.
Copyright 2006 Sandra P. Martini
Sandra P. Martini
¶ 10:40 AM 0 comments
If you choose to hire a bookkeeper, keep the following in mind:
1. Get QuickBooks.
For ease of use, I highly recommend using QuickBooks and hiring a QuickBooks ProAdvisor. QuickBooks ProAdvisors have taken certification exams to insure that they know the system. I have used QuickBooks both for myself and my clients since 1996 and highly recommend it for its ease of use/understanding.
The online version is great in that you can see the latest version of your books at any time and eliminate the annoyance of emailing files back and forth and wondering who has the latest version.
2. She must see both the forest AND the trees.
You want your bookkeeper to be detail-oriented AND to see/understand the big picture. She needs to know what happens consistently every month and update your books without bothering you for items she should know about.
At the same time, she needs to be astute enough to see the larger picture and warn you of any impending problems before they happen. If you purchase a piece of equipment, she should know how to properly enter it into your bookkeeping software to avoid problems and therefore save time and money with your accountant (and the IRS) later on.
3. She must know your industry.
You dont want to have to train your bookkeeper on your industry language, standard industry income or expense categories or other basics. The more up-to-speed she is, the faster she can hit the ground running and the sooner you will have good data. If she doesnt know your industry however, be sure to give her a rundown of lingo and how you refer to your customers/clients/tenants in order for you to get the most meaningful reports out of the gate.
4. She must provide timely reporting.
In hiring your bookkeeper, insure that you put in a provision for when you want to see monthly financials. The date will depend on when your bank month ends give her a few days after that date to reconcile your accounts and produce reports. At a minimum, you want to see a profit & loss, balance sheet and cash flow statement.
Take the time to review the reports so you can spot any irregularities before they blossom into problems. Not sure how to read a cash flow statement? Get a check/electronic funds transfer (eft or auto debit) transaction detail instead. It will help you see where the cash is going.
5. She must know accounting terms and still speak English.
Your bookkeeper needs to know the difference between assets, liabilities, income, expenses and equity and be able to provide your accountant with the necessary data upon request. At the same time however, if you are not numbers oriented, she also needs to be able to explain the financial statements to you in plain English.
6. She must be trustworthy.
Hiring someone to keep track of your bookkeeping requires a level of trust between you both. You need to feel comfortable that she will keep track of your information and maintain your confidentiality. At the same time, if she pays your bills and has access to your bank accounts, you must also trust that she will not abuse that privilege. And make no mistake, it is a privilege to have someone (particularly in a virtual relationship) trust you with their finances, their checkbook and their business.
Good business sense demands that you protect yourself just in case. I highly recommend that, in addition to a confidentiality agreement, you insure that your bookkeeper is bonded and you get a copy of that bond.
7. She must have great communication skills.
If your bookkeeper will be communicating with your clients and vendors, she must represent your business as you would. Whether virtual or in-house, its critical that your bookkeeper be a positive force that further enhances relationships. The question of money can, at times, be a sensitive matter. You need someone who recognizes that and communicates appropriately.
Always remember these are your books and this is your business. While you may hire someone to manage the details of tracking your finances, and should do so if this is not one of your strengths, the ultimate responsibility for oversight is yours. Michael E. Gerber of the E-myth series said it best: Delegate, dont abdicate.
Copyright 2006 Sandra P. Martini
Sandra P. Martini
¶ 10:40 AM 0 comments
Turning A Dream Into A Nightmare
To make money takes money, right? Or so many of us have heard and believed for years. Thus, when an individual seeks to open his own home business, he first seeks a way to obtain that money that he needs to make the money that he wants. The majority of those in this very situation will take the quickest route possible: straight to the bank. They will borrow the money they need and in the process risk items paramount to their ability to live, namely, their homes. Across the country individuals risk those things that they need the most, namely their homes, in the name of establishing a home business. However, the successful home business owner, the ones that end in the black every time, shun the idea of borrowing money. Instead of drinking the kool-aid of debt, they have discovered a way to pay their way to success.
First and foremost, these individuals do not, under any circumstance, borrow money. They understand that the borrower is slave to the lender, and thus in order to stay free, they run far away from the shackles that bind so many of their contemporaries. How do they do this? They have a vivid imagination. They imagine the foreclosure notice coming to their door via the postman, and they imagine their family selling nearly everything they have to keep the home they live in simply because they put their home up as collateral against a loan so they could open their own business. This image alone motivates them not to borrow against their home or anything else important to them.
Instead of borrowing, these successful home business owners establish their business slowly by growing only as far as they can afford it. They pay for their business items with cash, including inventory and supplies. When they pay in cash, they purchase inventory and supplies much more carefully, because they are using money that they have already worked hard for. Thus they select their investments wisely. They also understand that when they grow a business slowly, the business has time to establish roots and thus longevity. They have the time to manage it because it does not grow out of control.
Finally, if the dreaming-of-a-home-business individual cannot afford to open his own home business with the cash he has on hand, he keeps his dream but does not sacrifice his home to get it. Instead, he transforms that dream into a goal, and he works all that much harder at his present job to make the dream a reality. Once he has saved enough money, then he begins investing in the dream, the home business. At that point, the home business no longer is a dream that may turn into a nightmare, but it's the beginning of an end, with the end being the goal and the beginning being the dream. The home business owner then has a reason to celebrate: he has just opened his own business without any debt.
Home business owners across the country are sadly declaring bankruptcy and moving their families to smaller homes or apartments because of foreclosures. The home business does not have to be that same nightmare for every home business owner. Let your home business turn into a dream by paying off your debt and then paying for what you need with cash only. Doing so will lead you to a much more successful and peaceful end.
Jim Biscardi is owner of Dynamic Wealth Systems, LLC and writes on a variety of subjects. To learn more about this topic Jim recommends you visit: http://www.DynamicWealthSystems.com
¶ 2:44 AM 0 comments
First and foremost, these individuals do not, under any circumstance, borrow money. They understand that the borrower is slave to the lender, and thus in order to stay free, they run far away from the shackles that bind so many of their contemporaries. How do they do this? They have a vivid imagination. They imagine the foreclosure notice coming to their door via the postman, and they imagine their family selling nearly everything they have to keep the home they live in simply because they put their home up as collateral against a loan so they could open their own business. This image alone motivates them not to borrow against their home or anything else important to them.
Instead of borrowing, these successful home business owners establish their business slowly by growing only as far as they can afford it. They pay for their business items with cash, including inventory and supplies. When they pay in cash, they purchase inventory and supplies much more carefully, because they are using money that they have already worked hard for. Thus they select their investments wisely. They also understand that when they grow a business slowly, the business has time to establish roots and thus longevity. They have the time to manage it because it does not grow out of control.
Finally, if the dreaming-of-a-home-business individual cannot afford to open his own home business with the cash he has on hand, he keeps his dream but does not sacrifice his home to get it. Instead, he transforms that dream into a goal, and he works all that much harder at his present job to make the dream a reality. Once he has saved enough money, then he begins investing in the dream, the home business. At that point, the home business no longer is a dream that may turn into a nightmare, but it's the beginning of an end, with the end being the goal and the beginning being the dream. The home business owner then has a reason to celebrate: he has just opened his own business without any debt.
Home business owners across the country are sadly declaring bankruptcy and moving their families to smaller homes or apartments because of foreclosures. The home business does not have to be that same nightmare for every home business owner. Let your home business turn into a dream by paying off your debt and then paying for what you need with cash only. Doing so will lead you to a much more successful and peaceful end.
Jim Biscardi is owner of Dynamic Wealth Systems, LLC and writes on a variety of subjects. To learn more about this topic Jim recommends you visit: http://www.DynamicWealthSystems.com
¶ 2:44 AM 0 comments
