One mistake I see a lot of businesses make, is the lack of reviews they perform on their bookkeepers’ work. Every single month I go through what our bookkeeper has prepared, and make sure it lines up with the story from the last month in my head.
The numbers tell me what’s happened from a cash flow perspective. Sometimes a subscription doesn’t get taken one month and then it pays twice in the next – and I can see that in the numbers, but if I see something out of place, I’ve got to be able to explain it.
We’ve taken clients through their P&L and it’s sort of like a light-bulb moment when they see all these irregularities, but we work out as a team, “Hey, why is this different? Why is this going up, why is it gone down? Is it an annual payment, or quarterly?” and making sure that the business owner knows what’s going on after the bookkeeper has been in there and done their thing. Even that will be so enlightening to someone who hasn’t done it yet.
You need to make sure you have a look at what your bookkeeper has done, but also use those reports to plan moving forward. The amount of clients who only look at their profit-and-loss statement when we prepare one each year. We’re preparing it for your annual financial statements, almost for the tax man; we’re not preparing it as a management report. So, you need to use these things to manage your business.
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