When my clients come to me, they usually don’t have much of an idea of where their finances sit. Even if they are checking their P&L in QuickBooks, a lot of them take it for what it shows them, not knowing that there are actually errors in their books that change that number.
While it is great to be in the habit of checking your reports regularly, it doesn’t do much good if your books aren’t accurate or up to date. Because if they are not, you are really just wasting your time looking at numbers that don’t tell the whole story or don’t tell it correctly.
One of my clients that I started working with in 2021 came to me with books that were not up to date, and kind of a mess. Her previous bookkeeper had disappeared months ago without a word and my client was unaware that her bookkeeping had fallen behind.
Once she realized it, she knew she needed help to get things caught up and ready for the upcoming tax season. But while getting caught up and getting everything cleaned up she discovered something. Her business had been turning a loss all year! And not a small loss, a $60,000 loss! She had no idea!
Not only did her books fall behind, but she had never had a bookkeeper send her the key reports I do. Not looking at these reports kind of makes you blind to your businesses finances. The only thing you really have to go off of at that point is how much money is in your bank accounts.
While it is important to make sure you have cash in the bank, you are missing the big picture by only looking at this. And that is exactly what my client was missing. She had been funding her business with credit cards, loans, and owner’s contributions. She was paying for services she wasn’t using or services that were not bringing her the return she had expected.
So after we got her books straightened out and caught up, it took a little while for her to trust me. Which is understandable, she had a bad experience with her last bookkeeper. But once she did, we got her on a path to turn a profit. We made sure every expense had a vendor assigned so we could run reports to see how much she was spending on with each vendor. We were able to catch recurring expenses/subscriptions that she was not using and she could cancel. And we talked about the return she was getting on some of the services she was paying for and really looked to see if it was worth continuing.
And you know what?! With monthly meetings, really taking a deep look into her expenses, and the return on certain services, she was able to turn a profit in 2022! She went from a $60,000 loss to a small profit in 2022! And while it was just a small profit, I am willing to bet the profit will be even higher this year!
If you’re a business owner, you might be curious what the steps look like to get your businesses finances in order like my client did. So let’s take a minute to talk about that.
First we start with a consultation! I need to know that I can help you and we are a good fit for working together. I will learn more about you and your business and what your goals are for your business ultimately. I can also answer any questions that you might have.
After that I take a dive into your bookkeeping. We are currently only taking on QuickBooks Online clients so I will need access to your books. From there we have a checklist that we go through when we review your books to make sure that everything is in tip top shape. If not, we will quote you for a cleanup because if your books aren’t clean, your reports won’t be accurate.
Once you sign on we put a plan in place to get your books in order and then go over the reports with you for the period of time we cleaned up. We like to have an idea of how things have been going so we know where we are starting and we like you to be aware of that as well!
Once your books are all cleaned up we start with monthly or quarterly services where we keep your books up to date and accurate and provide any add on services.
Then monthly, or quarterly, depending on the option you choose, we go over your reports with you. We look at some key ratios, review your goals for your business and where you are at towards reaching them. And we come up with a few ideas to help you increase your business profits!
As you can see, your books don’t have to be “ready” for a bookkeeper. Come to us as you are and we will help you get things in order so that you can have a better understanding of where your finances sit and what can be done to improve them!