As a bookkeeper, you know that keeping accurate financial records helps your clients understand the business of business. Teaching them to read a Profit and Loss report and a Balance Sheet helps them monitor the health of their business.
By training your clients on daily workflows, then monitoring their input, you save them from scrambling at tax time. They’ll be ready for their CPA in a few hours…instead of a few weeks.
In addition, you’ll be able to show them which of their products and services are their best-sellers, and which make you them most money (they may not be the same!). You’ll also uncover their best type of Customers to help better target their marketing.
And if your clients NOT doing well, you’ll be able to use QuickBooks Online to track your expenses and analyze exactly WHY they’re losing money.
Does Your Client NEED a Bookkeeper?
Bookkeeping is an undervalued and underutilized facet of running a business.
Good bookkeeping can improve cash flow and increase profits. Bad bookkeeping can lead to business failure.
As the bookkeeper, you may have the job of entering daily transactions, keeping the QuickBooks file up-to-date so that the owner can log in and have instant accuracy.
Or, maybe your role is to review their daily work on a quarterly, monthly, or weekly basis, reconciling all the bank accounts, credit cards, loans, and clearing accounts. You’re the backline defense for accuracy, since you understand where to categorize the transactions, and why….and you have Reclassify in your briefcase!
Many small businesses don’t think they need a bookkeeper, rationalizing that it’s an extra expense they can’t afford, that they can do it themselves. To those owners you should ask these three revealing questions:
- Do you honestly enjoy data entry, coding transactions, and balancing check registers?
- Are you GOOD at it? Do you know what to do in unusual circumstances?
- Do you have time?
If the answer is NO to any of these questions, THEY SHOULD HIRE YOU!
The Pareto Principle: The 80/20 Rule
The 80/20 rule, also known as the “Pareto Principle,” is a universal truth in business.
- 20% of your Customers generate 80% of your net profit
- 20% of your products or services contribute 80% of your revenue
- 20% of your staff create 80% of your Customers’ experience
Not surprisingly, only 20% of all the hours you work actually add value to your bottom line.
Good bookkeeping helps you find where your 20% is hidden.
Clients can use QuickBooks like a glorified checkbook or track a lot of detail in every transaction. The former is quick and easy. The latter is more time consuming and requires attention to detail, but it allows the ability to slice and dice your transactions.
QuickBooks Online has dozens of reports that uncover a company’s best Customers, services, products, and time well spent.
For data junkies, using the more advanced versions of QuickBooks Online helps you know in which direction to grow.
Putting the “Quick” in QuickBooks
Allocate a quick few minutes each day for the daily maintenance of QuickBooks Online data. Staying current with data entry not only keeps the burden to a minimum, but it also makes the data entry easier and more accurate as transactions are fresh in everyone’s mind.
Think of it this way: If you sit down at 4:45 each day, it will take 15 minutes to enter your daily transactions. If you wait until Friday, not only will it take that 1.25 hours, but now you’ll have to go look up what happened on Monday, since you’ll have forgotten the details of all the transactions by then, adding at least another 15 minutes to the process.
And if you wait until the end of the month, what would have taken only 5 hours may now take over an entire day!
Doing the books is like exercising: the longer you wait, the harder it is to get started. And the more often you do it, the faster you see results.
3 essential actions to take at the end of each day:
- Make that day’s Sales Receipts or Invoices, and take the Payments.
- Make Deposits. Group cash and checks, and batch your credit cards. Deposits need to exactly match the amount posted in the bank, and Undeposited Funds account should be empty.
- Accept your Banking Transactions. Clean out the list of downloaded transactions that cleared today. Match the deposits created manually and categorize new expenses. Data entry is faster while you still remember the transactions, as opposed to waiting until the end of the month and having to look everything up.
And here’s a bonus action you can take: visit learn.royalwise.com, where you can learn to do these things by joining a live class, or watching an On Demand QBO training video.
5 essential reports to review every day:
- A daily/monthly/YTD Profit and Loss. By reviewing each day’s profits in real time, you will be able to notice what is or isn’t working, then make adjustments accordingly.
- Sales reports by Product or Customer. The Customers who spend the most may not be the ones who drive the most profit. And the most popular products and services may not have the highest margin.
- Accounts Receivable. Cash flow problems are frequently due to uncollected Invoices. Review what Customers owe and make plans to collect!
- Accounts Payable. If your Clients know what they owe in the next 30 days, they’re more likely to pay it on time.
- Balance Sheet/Cash on hand. Each day you must know exactly how much cash is available in your bank accounts and how much you owe on liabilities. And ignoring credit cards won’t make the debt go away!
Next Steps
If you are assisting a client who is just starting a new business, there are some fundamental accounting concepts it’s important for them to know. Point them to my free course “Intro to Accounting for Business Owners,” which explains tax deductions, record keeping, and other essential tips. Check it out at bit.ly/royalwise-intro-to-accounting-course.
Once your clients understand why bookkeeping is important, teach them the Pareto Principle, and use it to identify their 20% and grow their companies! When you put what you know into action, you will reap the rewards.
I would love to hear your thoughts! Please comment below.
Alicia Katz Pollack
About the Author
As an Elite ProAdvisor and a member of the Intuit Trainer/Writer Network, Alicia Katz Pollock wrote two QBO books on Amazon, leads weekly QuickBooks training webinars, develops a vast QBO training video library, and runs the QuickBooks Online Mentorship Membership™ program at learn.royalwise.com.
A natural teacher, she blends the skills of technology, the art of communication, the patience of a trainer, the wisdom of a consultant, and the detailed eye of an obsessive-compulsive to provide the finest in business education solutions.