If you have little to no bookkeeping experience, I highly recommend that you hire a bookkeeper or an accountant to take over your books for you. Trust me: This one step will save you time, money and energy in the short- and long-term.
Sure, you COULD do it yourself. There’s accounting software out there. They all have their pros and cons. But none of them are going to do your accounting properly for you. And an poorly set up accounting file is going to cost you more money in the long run. Trust me: I’m the one who cleans up these files for creative entrepreneurs.
So, yes! Your next question:
“How do I find the right bookkeeper or accountant?”
I’m so glad you asked. Great question!
I remember meeting with a prospect in person (oh, the good ol’ days!), and at the end of our meeting he leaned in and quietly said, “Can I ask you a question?”
Of course I said “Sure!” Admittedly, though, I was a little nervous, thanks to the secretive turn to the convo.
He asked me, “What’s the difference between an accountant and a bookkeeper?”
I’ll share with you what I shared with him:
A bookkeeper will enter your monthly transactions and make sure that what’s in your accounting software matches what your bank, credit card and loan statements tell you. (That’s called reconciling.) However, a professional bookkeeper is more than a data entry person. They will help you report on your taxes, let you know about any red flags you should look into further, and prepare your year-end documents for your accountant. Some bookkeepers take it one step further and complete your tax returns for you, if applicable. Bookkeepers can be accredited and hold various certificates, and the ones who continually provide excellent service stay-up-to-date with trainings and conferences. Many (not all) bookkeepers will also provide payroll and accounts receivable and payable support if needed.
An accountant tends to look at your books once a year when it’s time to file your taxes. You’ll also meet with them throughout the year when you have an important accounting matter to discuss. They’ll make sure that what is posted to your accounting software looks reasonable and won’t raise any eyebrows at the tax department. Not all accountants are CPAs, but many accountants hold certificates and degrees in accounting, finance and tax law. If your business is incorporated, there is a high chance that you’ll hire a CPA to complete your year end, especially if you have other investors or have or will have certain types of loans. While “CPA” stand for two different names in Canada and the US, the acronym does indicate that these professionals are held to the highest professional standards, are subject to audits of their own practices to ensure those standards are met, and must continue training yearly after they complete a rigorous program. Some (not all) accountants offer monthly bookkeeping services as well.
Now that we’ve got that out of the way, here’s one of my favourite pieces of advice I love giving.
When you’re ready to hire someone to take over your books, ask your friends, colleagues and/or peers for some recommendations.
Also, ask them why they recommend the accountant or bookkeeper, and then schedule a meeting with two or three recommended professionals. When you meet with them, you can:
1. Ask if they specialize in an industry or niche. (If you can find a professional who works with creatives on the regular, that’s even better!)
2. Pay attention to whether or not you feel at ease with the professional. If your gut or brain says “No, thank you,” then don’t! Accounting professionals can be, and should be, friendly, and they should never be condescending.
3. Ask them for package pricing for the work being done, rather than hourly. That way you’ll know what you’ll be paying from the outset, and you’ll know that your accounting professional has been doing this work for some time and is familiar with the kind of catch up project you need done.
Of course you will have many other questions, depending on your priorities, preferences, and situation. Be sure to ask them, though!
If you want to add me to your list of accounting professionals to interview, you can book your no pressure Discovery Call right HERE.
Those bank statements that are sitting in unopened envelopes, stashed in an easy-to-ignore corner in your office.
Those voicemails from the tax people that you just keep forgetting to respond to.
How am I doing? Is it like I can see how you deal with your business finances?
Don’t worry. I don’t have a crystal ball and no one’s sent me pics of your office.
I just know from experience that this is how it is for so many creative entrepreneurs who have been in business for a year or more and feel overwhelmed and, let’s face it, bored by the accounting tasks that your business needs you to do.
How do I know? I’ve been working in banking and finance for 25+ years, and I’m not exaggerating when I say that the majority of clients I work with come to me with shoeboxes and files that take us back a year or more in accounting.
So hopefully that makes you feel better.
See, when my clients hire me, it’s not my job to make them feel crappy about leaving their accounting for so long. So allow me to give you the best business advice you’ll ever get: You don’t need to feel crappy about your business finances.
In fact, the more crappy you feel, the LESS likely you will want to tackle your finances, and the MORE likely you are to sit in said crappy feeling because you’re not getting anything done. #ViciousCycle
How about if from this point on, you commit to getting your accounting caught up, and I walk you through the steps you’ll need to take to get that “money stuff” caught up?
In fact, I’ll make this super easy for you:
Here are the first steps you need to take BEFORE you actually start sorting paper and filing emails and invoices. That’s right. This list is to help you get mentally and emotionally prepared to tackle the job that you’ve been putting off for one reason or another.
[If you’re ready to get to the nuts and bolts of getting your accounting caught up, download the guide HERE.]
Make no mistake: Even though these might not be technical accounting tasks, these ARE extremely important steps. They are perfect for you if:
You’re the type of person whose palms get sweaty when you start to think about your business finances.
AND/OR you’re a master procrastinator any time you plan to sit down with your accounting.
AND/OR you panic, cry, lose your s*&%, any time you are “supposed” to look at your finances, then this list is for you.
As they say in every Youtube “How To” video known to humankind: Let’s get started!
1. Make some space in your calendar to have a quiet Money Date. Seriously. Do it.
Special note: I know in COVID days that it’s tough for a lot of people to get away from all the people in their house (e.g. parents 🙋🏻♀), so hopefully you can ask for some support to get some time and to yourself.
2. Keep your eye on the prize.
It’s sucky to feel like you HAVE to do something. In fact, you might find you rebel whenever anyone tells you that you NEED to sort out your finances, right? Except, you actually do because waiting will cost you money, time, energy and emotions.
So let’s make this nice, OK?
And to do that, remind yourself what you’re going to achieve – over and above tidy accounting – when you sort out your books.
To do this, you can ask yourself one or more of these questions:
“What opportunities will I create for myself when I’ve finished this work?”
“How will my business thank me when I’m done?”
“What will I have time to do once I wrap this up?”
“How will I feel when I know that my business finances are under control?”
3. Feel the feels.
If you haven’t downloaded and spent some time the Money Mindset Restart Guide (A.K.A. FREE money coaching), it’s time to do that. It’s KEY to setting yourself up for success.
4. Pull out your Financial Catch Up List, found HERE.
I’ve created this list so that it’s simple and easy to understand. No jargon. Just what you need to know.
Plan another date when you’re going to spend a day getting this done.
Seriously, plan a day. You might get it done in a few hours, but leave yourself even time to track down the docs you need and file accurately. If you’re done early, then have a back up celebration plan. Heck, plan on celebrating anyway! 👍
Can I start by saying this?: You’re fabulous for giving your accounting workflow some much-deserved attention.
In my 25+ years of working in finance and accounting, I’ve seen so many business owners – especially creative entrepreneurs – ignore, forget about, or don’t ever give any love to finance, which is the backbone of their businesses. No cash flow, no business. It’s as simple as that.
Yes, I may be biased. I’m an #AccountingNerd and I adore a good workflow and efficient ways to get things done in my business. So I guess I’m lucky that I can take on the job of in-house accountant in my accounting business. (If I couldn’t, I’d be in trouble, right?)
Back to you and your business, though: You can’t escape your business’ need for up-to-date and accurate financials. I suppose you could leave it for a while. I mean heck, I’ve worked with clients who are behind on their books and tax returns by two years or more. No judgment, by the way. I love helping my clients get caught up.
I promise you, though, that letting your finances get behind is going to cost you BIG TIME. Here’s why:
• From a practical perspective, hiring someone to do your “clean up” or catch up bookkeeping and accounting costs a lot of money, and you’ll have to pay that out in one big, painful payment. If that’s what it’s come down to, well, there’s nothing we can do to change it. But if you can catch that now and get caught up OR set your new business up properly, right from the start, wouldn’t that rock?
• Also from a “you have better things to do” perspective, getting years’ worth of paperwork together (digital and hard copy) for your accountant or bookkeeper is a pain in the patootie. Getting a record-keeping system up and running is pretty easy and painless when you’re passing those records off to an accountant.
And yes, the paperwork matters. Guessing doesn’t lead to honest books and tax returns, plus the numbers can be wrong, which makes for crappy year-over-year comparisons. (Don’t know what that means? No problem. It’s important, but first, let’s get your books sorted out, K?)
• Taxes: Ugh, right? Simply put: If you don’t get your books done you can’t file your taxes and you’ll have to pay penalties and interest + miss out on any government programs and benefits that might be available to you. At the time of writing, I know of a number of business owners who aren’t eligible for COVID relief simply because they haven’t filed their taxes yet. Or worse, they paid people under the table or didn’t claim cash jobs. But that’s a whole other topic we can chat about later.
• Cash flow: Oh my gosh, the lifeblood of your business AND your personal finances, right? You might think you know all the ins and outs of your cash in your business, but when things really get rolling, those mental budgets and cash flow projections are going to mess. You. Up. Seeing the numbers on paper in the form of just one or two key reports that a good accountant can help you understand? Priceless.
How do I know? Well, running my own businesses and doing the financials for countless other businesses and organizations has shown me how helpful a good financial report can be.
Let’s see: You’ll save money and time, you’ll avoid calls from the “tax people,” and you’ll be a financially savvy business owner. These all sound like reasons to get your business’ financial house in order.
So what’s stopping you?
Oh, you’re not sure HOW to do this?
And here’s what else I got: A handy-dandy checklist to help you get started.
It’s simple. It’s realistic. It’s fab.
Click right HERE to get your PDF Accounting Checklist.
You could use this if you’re catching up on a few months – or years – of accounting in your business.
And you can keep using it month after month to keep up with the money matters in your business.
Also, if you’ve let your finances get REALLY behind:
a) Surprise! You’re normal, and
b) Click HERE to read my post about how to get caught up on your accounting without letting the bad money emotions sabotage you.
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