In our last post Bookkeeper vs Accountant we discussed the differences between a bookkeeper and an accountant. Now you may be at a point to go forward with one or both for your business. Regardless of whether you have a new business or have been in business for awhile, you need to find the right fit for you. Your options run from hiring an on site employee, to virtual support or even “robo” solution. The goal of this post is to dig deep into what services are provided by Bookkeeping By Rine, LLC so you can make a comprehensive comparison.
Standard Services
Classify & Record Transactions
Taking your bank statements, receipts, invoices, bills, etc. and recording them into their proper categories within the bookkeeping software. Ummm yeah, every and any bookkeeper and/or software has to do this step. It is key to the whole process. If transactions are not classified you essentially have a shoe box full of paper. Nothing can be done with the unknown. What you get with Bookkeeping By Rine, LLC – I checked out my university transcript and there were 18 classes directly related to accounting, finance, or small business – geesh – I am sure that I still retain some of that knowledge even if it was a few years ago 
. And there are 10 years of audit background along with 3 years of financial planning and analysis (budgeting). Plus I have recently completed a certificate of completion in an online bookkeeping program. And will get additional certifications as they become available. So, if for some reason I don’t already know the answer I bet I can find one!
Credit card example from a robo perspective: In today’s world many to most transactions either are electronic or can be scanned via OCR (optical character recognition) and translated into data which can then be automatically classified.
Step back and think about your credit card line items. They are all being fed with the retailers codes and is a part of the categorization process. The challenge is when the retailer provides a variety of products that one single category will not be correct for the majority of purchases. Such as Amazon classified as Catalog & Mail Order or Walmart as Department Stores. Even Office Depot/Office Max may not just be for Office Supplies. There may be furniture purchases or printing for marketing purposes. Additionally, most software programs remember what the “last” transaction was coded as and auto populate that next one. Sometimes this is helpful, sometimes it is just wrong. This is where having a qualified bookkeeper can make sense of the “robo” chaos.
Reconcile Transactions w/ Bank statements
Validating that the general ledger (the spot in the bookkeeping software where all your recorded transactions are listed) and the bank records are in agreement and then making the necessary updates and corrections so they reconcile (ie have the same balance). Yep- another one that every bookkeeper should be doing, it is the check that everything was entered into the software agrees with everything that came through the bank/credit card. A very important process that needs to be performed timely and accurately. You get to play a big part in this one too. If you don’t provide the receipts or give timely access to the bank feeds then this step becomes a bottleneck. This step is the checkpoint that everything that should be recorded has been recorded. It also validates with an external source ie the bank. Granted banks can be wrong, but more likely than not the information that they provide is correct.
I didn’t want to say it earlier but this is where I can help you get out of the shoe box. We will set up a process that is the least painful as possible. Yes there will be some pain getting all those receipts in order, but once done and a repeatable, consistent process is put in place, this will become easy peasy. You can even blame me for having to have a copy of the receipt. Outcome — You will be so happy when tax season rolls around and you will already have your receipts all in one place attached to the transactions and ready to go.
Produce Financial Statements
This starts with generating draft financial statements and reviewing them for accuracy and analysis. This may seem like an obvious step, but it is not a common step. Bookkeepers are the best situated to know if something was input in error. When transactions are being input, there is an understanding of where that transaction should flow and on which statement it should show up. If it didn’t, then the research begins as to what happened and take the appropriate actions to correct. The good thing is that everything is fixable.
Now that the Big 3 Statements – Profit & Loss (Income) Statement, Balance Sheet & Statement of Cash Flows have been reviewed in draft, it is time to make them final for the month and here comes your turn. The statements will be provided to you regularly during the timeline we agree upon AND we will do a live review, especially at first. By having a regular review we can talk about changes and/or potential opportunities. This is also a great time to talk about customizing these reports to provide a clearer picture to what it important to your business. This may be comparisons to prior periods or cost ratios. These reports are available to everyone, the difference is that we will actually review and use them to the best benefit of the business.
Have a conversation with you, the client.
As already noted we are going to be talking anyhow….Yes, we will talk about the financial statements, maybe even do a deep dive in a specific area. But this is also a check in to make sure that we are still on track. Specifically around pain points like cash flow, invoicing, or capturing receipts. There are tons of apps available to make every part of the process easier. We need to spend the time being smart about which ones are right for your business.
I hope you didn’t really think that was it, there’s more…
Additional Services to consider:
Accounts Receivable (AR)
You want to get paid, right? Well it starts with getting an invoice to the customer. Best case scenario – you send an invoice once the work has been completed (or product provided) and they pay within terms. But what if they don’t? How will you know? What will you do?
Where we come in is to review open activity to ensure that invoices are sent out timely. Second is to review AR reporting to see who has paid and who has not and how long that they have not paid. Finally, provide your business with an actionable summary listing for all customers that need to be contacted.
Accounts Payable(AP)
Do you like getting late notices and fees? We certainly do not! So let’s make sure that we know what is supposed to be paid and by when. And let’s take advantage of early payments if we can pay less too!
Keep in mind, a bookkeeper, and in some cases anyone other than the business owner, should never pay bills for you. One of the major ways fraud is perpetrated in businesses is by giving an employee the ability to authorize payments. Especially if they also have access to set up vendors. It’s too easy when you can set up your own “vendors” and pay yourself what feels right at the moment…
It is a best practice to do this yourself as the business owner. Some day when you have separate departments handling these things, someone else can have the responsibility as long as there are appropriate controls in place then too. Now, what we can do is all the data entry to have the bill ready to be paid. But you should be the one that approves the payment.
Planning AKA-Budgeting AKA-Your Financial Success Roadmap
You want to be successful right? Well planning is one of the tools that can help you on that road to financial success. It separates the good businesses from the great businesses. A roadmap is just that, a guidance system (GPS) that allows you to prepare for success and then make adjustments along the way. The bookkeeper’s role here is to help create, implement, and monitor the budget. And lucky you, I did this in my past corporate life. Full time even.
Benchmarking
Do you want to know what your competition is up to? Well here is a great way to compare your financial performance to like businesses in your industry. Once you know where you stand, you then take actions to stand where you want to stand. Or, your place in the sandbox.
So that’s what we do! It may sound simple but having these things done right is crucial to the success of your business. Keep in mind that you get what you pay for when it comes to service businesses such as bookkeeping. If you hire a “value” bookkeeper, they may be cheaper and get the main job done but they don’t tend to offer the more proactive services talked about here. Also, they may not be able to spend the time talking to you about your finances and teaching you, the business owner, what your financial statements are showing about your business. If you are just starting out and not making much yet, cheaper may be the way to go. But if you’re serious about growing your business and have the money to spend on a great bookkeeper (which is tax deductible), you won’t regret it!
Contact Bookkeeping By Rine, LLC if you are ready to outsource your bookkeeping!