Sunday, January 13, 2019

Getting the Most Value From Bookkeepers

I learned a long time ago that if I wanted to derive value and performance from vendors, I had to set clear expectations about was important to our business, and how I wanted them to work with me.

A good bookkeeper alone is no guarantee you will get good service. Like managing staff, you will have to communicate your expectations clearly from the beginning.

A4 plastic concertina folder.

In here you file print outs of signed quotes, vendor quotes, client invoices, supplier invoices, bank statements and government correspondence. The bookkeeper will transfer these into the D-ring folders as they are processed through the accounting software.

10 large D-ring folders.

These will contain the bulk of your records, labeled by year and document type. They remain permanently on the client concessions. Remember that you need to keep your records for five years and they need to be clear enough to help your accountant minimize your tax bill.

Handle each piece of paper once.

If you are going to collect the mail, or open an envelope, either file it away immediately in the concertina folder or throw it out. If you are too busy to file it, do not open it. Handling the document once will keep you focused on providing value to customers.

Do not rely on your memory.

Write down what you need to brief the bookkeeper on using Microsoft Outlook Calendars. Attach an agenda to the calendar invite and update it as frequently as necessary, with the activities you need carried out and the priority. For example, apply for a company credit card, research government grants or find a better way to invest excess cash at bank. Have all your ducks lined up and you will maximize the bookkeeper's productivity.

Keep business and personal separate.

Bookkeepers can chew though your books quicker if you separate business from personal expenses. Mix them with personal and it makes it messy.Store safely in one place passwords to government + client payment systems.

Avoid writing checks.

Let your bookkeepers write your checks. That way you only have to sign them. Apart from the fact you could make an error, there are other reasons like conditioning vendors about the frequency of payment that makes outsourcing checks smart.

If you do have to write a cheque, recorded all the details of the transaction clearly on each stub as you write the cheque.

Imagine the stubs needing to be queried in a year's time - the more information the less time wasted. Double-check the cheque is correct before you issue it. Record the cheque number and date on the invoices you are paying with that cheque and the invoice number on the cheque stub. Make sure you use a red pen - that way these details catch the bookkeeper's eye.

Bank checks immediately.

When you receive payment for one of your invoices, record the date and pay-in amount. Do not chance filing the cheque to be banked later.

First make, annotate and file a photocopy of the cheque for your records. Staple the remittance advise to the cheque. Then bank the cheque within a day or two of receiving it. In the long run the cheque will be easier to track. The amount will appear in the next bank statement, and the date the cheque was written will correspondently close to the date it was banked. Very tidy. If you do lose the cheque, seeking a replacement is painful.

Staff expenses

Staff expenses can be very expensive to account for. A bookkeeper will ask you to supply them in Excel or equivalent to minimize our fee. This places the responsibility on the employee to collate and set out their expenses. If your staff do run-up a lot of expenses each month, consider supplying company credit cards to the most trusted.

Applying for a company credit card can be arduous, but effectively streamlines the reporting process. There are also some mobile applications which claim users can photograph receipts and the software will tabulate the details of the receipt into a spreadheet. These applications are cheap and worth piloting with one or two employees.