When you first start a business, you need to watch every penny. Most small business owners start out knowing this but not necessarily knowing how. They do their best to handle their own bookkeeping and somehow get by. At least for a while, and then the reality sets in and they realize they have no idea if they’re making money or not, they have no money in the bank and they don’t know why, or they owe taxes and don’t have the money to pay them.
The problem with the accounting department is that it’s seen as a cost center not an income center. Business owners don’t want to spend money to have someone handle the books. They figure they’ll save money doing it themselves. And, occasionally this is true. Or, they get lucky and have a partner or spouse who’s got the skill and a little extra time they’re willing to give.
The problem comes in when they realize one of two things has happened. IF the person handling the books has enough training to do it correctly and the financials are clean, that’s great! But they have no idea what to do with the reports other than turn them over to their tax professional. Or, the books get really messed up and if they’re smart enough they realize they have a problem and try to figure out how to fix it.
From my experience, I would argue that the accounting department can be very expensive if not handled correctly, or can be a cost saving center IF it is run properly and the numbers are analyzed and the data used to improve business functioning.
What I like to tell my clients is, it’s not about the numbers, it’s about the story the number tell. Which is not entirely true because it is about the numbers in the sense that if the books aren’t clean the numbers are meaningless. But, once the books are clean the information they provide is invaluable. They are your road map, telling you where to go next. Using the right person to keep the books accurate and up to date is critical. If the small business owner is not blessed to have the skill or a qualified volunteer in their midst. The I argue, it is less expensive in the long run to pay to have the accounting done right.
And, once you have the books clean, then it’s time to analyze them and use them as your guide. Here at Sherrington Financial Fitness, we can help you with the following:
- We can set up your books and handle them for you, or with your assistance
- We can clean them up and keep them up to date and accurate monthly
- We can sit with you and assess the reports to determine what direction you want to take your company
If the person in the driver’s seat doesn’t have a good road map and a qualified navigator to steer them in the right direction, they can easily stray off course.
This is the time of year that most small business owners think about their bookkeeping and we would encourage you, if you’re an owner, to assess your situation and determine if you’re getting the right help.
- If you are a current client and would like to review the services we are providing for you, please contact us for an appointment.
- If you’re not currently a client but aren’t happy with your current accounting, or know someone who could benefit from our services, please contact us and we’ll talk about how we can help.
Remember, the numbers are your guide, let us assist you in telling your story.
Sherry Lutz Herrington is the owner of Sherrington Financial Fitness, a business consulting and accounting firm specializing in strategic business planning and solid financial accounting for businesses. She is also the author of Strong Women Thriving (https://strongwomenthriving.com/), a blog which focuses on empowering women to be financially savvy, particularly after experiencing financial abuse. Sherry is currently writing a new book that both shares her personal story and addresses financial abuse. She can be reached at firstname.lastname@example.org.