15760 Ventura Blvd, Suite 610 Encino, CA 91436
FREE CONSULTATION818-436-2775
15760 Ventura Blvd, Suite 610 Encino, CA 91436
FREE CONSULTATION818-436-2775
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Personal, Affordable Payroll Services, Bookkeeping, and Tax Processing for Small Business throughout Los Angeles County.

What to Expect from an Outside Bookkeeper

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Most small business owners hate keeping books. Can you relate? There are few other aspects of running a business that are more mundane, complex, and neglected than accurately collecting, recording, and analyzing the daily receipts, payables, cash, payroll, taxes, and other aspects of keeping score.

There is no doubt that personal computers, QuickBooks, and online banking have helped take some of the sting out of the gathering and reporting, but the careful compiling and assessment are still often at the bottom of the to do list.

The traditional outside bookkeeper dropped by on Friday and picked up a shoebox full of invoices, receipts, and sales slips. He or she took the mess home, put on the green eyeshade and went to work making sense out of that pile of paper. The methods have changed, and green eyeshades are not even available on Amazon except as a sports visor, but the ultimate role of the bookkeeper remains the same. Take the data and make sense of it for management, bankers, spouses, and taxing authorities.

We created a 10 part series on the potential to mine thousands or even hundreds of thousands of dollars from your financial statements. Here are the headlines and the links:

Increase Your Profits Tip #1 – Margins Matter

Increase Your Profits Tip 2 – Margin Analysis – Case Study

Increase Your Profits Tip 3 – Financial Reports Reveal Luxuries

Increase Your Profits Tip 4 – Financial Reports Reveal Fantasy Thinking

Increase Your Profits Tip 5 – Six Numbers You Need to Run Any Business from Maui

Increase Your Profits Tip 6 – “Risk comes from not knowing what you’re doing.” Warren Buffet

Increase Your Profits Tip 7 – Count This and That and Even This 

Increase Your Profits Tip 8 – “That Was Really Dumb” App

Increase Your Profits Tip 9 – What Were Your Sales Last Year Same Month? The Year Before?

Increase Your Profits Tip 10 – Where Did All My Cash Go?

But the key to finding hidden profits and all other benefits of bookkeeping is timely, accurate, and intelligently designed reporting. What you should expect from your outside bookkeeper would be just that: great, accurate reports presented quickly after the end of the month quarter or year that will help you make more money.

Timely

A flash report should be available within 5 days of the end of the month or year. This flash report may not include transactions that were not available to the bookkeeper in time for reporting. However, the owner can review the flash report and see if there are any standout issues that need to be addressed immediately.

A final report for any period should be available within 20 days of the end of that period. The various reports might include red flags pointing out issues noticed by the bookkeeper that require attention. Between the flash report and the final report, any missing or odd items should be discussed to find out why there is a discrepancy.

For instance, most companies have many regular payments that are the same month after month. If there is no payment under rent, utilities, or payroll taxes, that should be noted. Aspects that are reported by %, such as margins, may change from month to month, but if there is a dramatic change, there is likely some missing reporting of receipts, invoices, or incorrect input of product cost or sell. More flags should go up.

Bookkeepers may sometimes notice other issues that are generally the job of the accountant. While I would never downgrade a bookkeeper for failing to notice that my margins were generally trending much higher than historically, a bookkeeper who did point that out should get high marks.

The final annual report should be presented by the end of January, even though the company may want to do some adjustments after that date. The earlier the bookkeeper completes the reporting, the more time the accountant and senior financial management have to make end of year decisions and begin the process of finalizing budgets for the coming year.

Useful reports

Finally, a good bookkeeper will make recommendations with regard to how reports are designed. There are many choices that can be made about items such as where to report freight in or freight out, how to deal with writing off slow or uncollectible receivables, and what to do with extraneous income unrelated to day-to-day operations. While the accountant or owners may prefer alternate approaches, a good bookkeeper will have suggestions for owners who have a marginal understanding of the books.

Having an outside bookkeeper help you with all of the above will cost you far less than you think. Maybe less than you are spending on lattes and frappes. To get a quote, call ATPP at 818-436-2775.