What is your current bookkeeping system and is it working for you?
Bookkeeping can be complicated and getting it set up can seem like a pretty tall 🗻 to climb.
There's 4 basic bookkeeping structures that we see in small businesses:
THE DIY APPROACH
If you are on a boot strap budget you may be able to learn to do your own books. Here's the thing with the DIY approach ➡️you need to learn to do it properly and you need to stay on top of it! Don't just learn the software - learn the accounting principles behind the software. I'm not one to just discredit a DIY approach. This can work for a lot of solopreneurs who are on a budget. But you need to budget your time to learn and stay UTD on your books
THE OUTSOURCED BOOKKEEPER
This is one of the more common structures we see with small businesses. There's been an influx of people in the bookkeeping space who are taking a few courses and calling themselves experts. It's very important that you find someone who is qualified to do your bookkeeping. Certifications in software is often only about knowing how to use the software, not understanding the actual accounting process. This creates huge issues for small business owners! If you are looking for an outsourced bookkeeper start with asking your tax professional for referrals or if they can provide those services for you
A COMBINATION TEAM
Once businesses reach a certain size it makes sense that they bring on a bookkeeper in-house. However this needs to be done with caution. Bringing on an internal bookkeeper needs to be used in combination with either an external professional overseeing the process or an internal control system set up in the company. One individual in charge of the recording of the finances with access to spend the money is a recipe for theft
INTERNAL FINANCIAL TEAM
Eventually a business may scale to a team of financial experts in their business. Structuring this team needs to involve a careful analysis of internal controls with built-in checks and balances
So where are you with your business? Do you have any questions on what structure is best for your business?