Introduction
Thank you for taking time to read this report: 5 Bookkeeping Mistakes & How to Fix Them.
My goal is to educate you on some of the biggest mistakes small businesses make with their bookkeeping. I want you to avoid these bookkeeping mistakes so that you can earn more and have peace of mind knowing that your books are done properly and in a timely fashion.
I understand that you as a small business owner are busy and there is only so much time that you can devote to your books. I know that it isn’t the most glamorous task either. If not properly kept up, the bookkeeping and accounting situation can become quite chaotic. That’s where a certified, educated bookkeeper can come in handy. Within a relatively short period of time, a professional bookkeeper can restore order.
I don’t want bookkeeping and financial chaos to be a part of your practice!
Please read these mistakes and see if they sound familiar to you. If you are making these mistakes, there is no reason to worry: I offer proven solutions to help restore balance.
However, great solutions in the hands of an unskilled bookkeeper can actually make things worse.
Imagine that someone comes to you to get something repaired or installed. You describe what you can do, what needs to be done, how much it costs or you give them a solution to their problem at hand. You are the expert in your field, but the customer tells you instead “I can do it myself” or “I’ll have someone else do it.” What’s even worse is that you find out someone unqualified did the job (after you gave the advice) and installed a product wrong or made a temporary fix that can possibly make everything worse!
I have taken a bookkeeping course by Ben Robinson called Business Bookkeeping Academy. I know what I’m doing…I can save you from these common mistakes…Whether you get your bookkeeping services from another qualified bookkeeper or myself, it is important to make sure your bookkeeper knows the tricks of the “bookkeeping trade” as they relate specifically to you and your business.
If, after reading this report about common mistakes business owners make, you feel you need help applying the recommended solutions or any other bookkeeping items, I encourage you to make an appointment with me to discuss your situation. I offer a free, 30-minute consultation to discover how you can move beyond chaos and restore order to your small business.
Mistake #1: Loose or No Controls on Your Bookkeeping, Financial and Banking Processes
Explanation
This is a scary one. Many business owners abdicate control of their bookkeeping, financial and banking processes. At times, there are loose or no controls. This can cause many audit issues. Even, in the case that you end up with an unscrupulous employee, embezzlement. If your finances are not under tight controls, you could be missing money and not even know about it. You could even end up owing the IRS or the state lots of money!
Solution
Establish sound bookkeeping, financial and banking controls at your company. One such example could be that no one other than you should have access to the banking records whether online or paper. If you’re using paper statements, have your company’s bank statements sent to your home address. If you receive them in electronic form, have them sent to your PRIVATE email inbox.
Doesn’t that sound like a simple fix? It is! Apply this, along with the other financial controls I recommend, and you make it much more difficult for anyone to steal from you. Having sound financial and banking processes makes it that much harder to have fraud or missing funds in you company.
This is your company and finances. It is your responsibility to monitor them and ensure your business thrives. A bookkeeper can help you with this by insuring that all of your finances are being monitored and all of your activity is recorded and classified correctly, helping you have a clearer picture of your finances.
Mistake #2: Pretending That Bookkeeping Doesn’t Exist And “Doing The Books” Once Per Year
Explanation
Just a few questions for you: “You went to school how long to learn your trade?” “How much training did you receive on accounting, bookkeeping, business and financial matters?” The answer is probably very little or none at all, and that is no fault of your own!
You see, I know what a lot of small business owners think is that they will focus on becoming the best at their trade and that everything else, including bookkeeping will just work itself out.
I’d hate to be the bearer of bad news, but that is not the case.
You can’t ignore the books; they represent the finances of your business! Your finances are what keep you in business. Now, that does NOT mean you need to go back and get your MBA. There are much better solutions.
Solution
First, see if there is someone who can teach you the ropes of what it takes to run your business finances. This person should have the “been there, done that” in your trade setting. Just because someone knows how to make an unrelated business run smoothly doesn’t mean they know how to do this for you.
Second, find someone to handle all of the routine bookkeeping and accounting matters.
Third, you need to review this person’s work on a monthly basis to ensure you’re being cared for. If this person has done a good job in teaching you (my first recommendation above) then you will know how to tell the difference between care and carelessness.
Mistake #3: Allowing Someone Unqualified To Do the Bookkeeping
Explanation
Let me ask you something: “Who does your books now?” If you answered yourself, your significate other or even your office manager, that must mean that you know exactly what he or she is doing and have some background in bookkeeping. Sadly, for many small businesses, this is not the case. As it turns out, your books could be a complete mess without you even knowing it. When you do find out, it might seem impossible to fix.
Having someone unqualified doing your books is a common bookkeeping mistake that needs to be addressed. You or the person doing your books may try their best, but your finances are too important to be left in the hands of someone without training.
Would you allow your office manager to invest your retirement funds? Or what about your kid’s college education fund?
Solution
When we allow the office manager or any other unqualified individual to manage the bookkeeping, you’re putting them in charge of the largest investment you have in your company. Business owners should take great care in appointing someone to do their books. Sometimes that might mean making a change in staffing.
The solution is simple: hire a trained professional to care for the bookkeeping. You will enjoy the peace of mind this gives you when you know someone professional is keeping track of your finances.
Mistake #4: Keeping Incomplete, Non-Existent or Outdated Books
Explanation
This usually is coupled with mistakes #2 and #3. Like an ostrich, you put your head in the sand and hope nothing bad happens. Or possibly, you turn over all your banking and “bookkeeping” records (for some, a big box full of receipts) to your accountant at tax time and let him or her deal with it. After all, who has time for that mess? This is costing you LOTS of money.
Solution
The most likely reason for this is that you or someone within your business is responsible for this activity along with about 100 other more pressing matters. It’s not your fault that there is only so much time in the day, so the books often get shoved aside. It’s important to hire someone whose sole function is to care for the books. It’s also important to make sure this person is qualified to serve you and understands what your business does.
Mistake #5: Not Having a Written Budget That Is Recorded and Monitored
Explanation
Possibly, one of the largest differences between being an excellent business and an average business is the use of a budget. For many of us, the word “budget” seems so boring. Let me assure you that the companies that outperform all the others, and in turn experience that financial success you desire, all use a budget.
They incorporate the budget into their bookkeeping. It is monitored and finances are adjusted accordingly on a routine basis to ensure they reach their goals outlined in the budget.
Solution
Develop a budget. I know it sounds simple, but lots of businesses don’t even create one. Track business trends in your financial statements and work with someone who knows specifically about your business. It’s not just about developing a budget, but maintaining and finding ways to achieve that. Look at spending and see if there are ways to cut back on spending or see if there are ways to increase cash flow. Having a financial goal helps to drive success.
Conclusion
Every one of the mistakes and solutions I just gave you I touch upon in my work. I’ve just told you in this article more about how to make your small business more successful than you would have thought. As a professional bookkeeper, I help small business owners avoid or fix these bookkeeping mistakes.
Now, I would like the opportunity to discuss your situation and how I can help guide you toward financial prosperity. If you’d like to take me up on this offer, please schedule your free 30-minute consultation.
Here’s the deal: I only serve a select handful of clients. I offer a real, hands-on experience, which limits the number of small businesses I choose to work with.
If you don’t contact me, that’s totally fine, I understand. But please do yourself a favor and get a qualified bookkeeper to handle your books. Don’t make the same mistakes so many others make! They are unnecessary and avoidable. It breaks my heart to see others like you missing out on the benefits that come from getting financial control of your business.
To schedule your free consultation, visit www.lutzbookkeepingsoultions.com/consultation or send me an email directly at glutz@lutzbookkeepingsolutions.com. I offer a limited number of free consultations so that I may tend to my current clients. So, please take me up on this offer now. I am a bookkeeper which means I am not a pushy sales person. I will be completely honest with you about your situation. After that, if we decide to move forward, that would be great. If not, that is fine as well. You should do what feels right for your business.
I hope this has been helpful and inspires you to take action.
Gary Lutz
