This week I took 2 enquiries from potential clients who were talking to us because one of their frustrations is that they don’t feel they have a proper handle on the finances in their business because they only get financial information from their bookkeeper on a quarterly basis.
So this raised the question for me as to why some businesses are prepared to accept that for their business when they need and want to be much closer to the information and more frequently. There are many reasons why this is happening which may include;
- They have always had quarterly information/reports and haven’t asked their bookkeeper or accountant to do it more frequently.
- They don’t see the benefit of having weekly or monthly bookkeeping – they just see bookkeeping as necessary for VAT compliance on a quarterly basis.
- Quarterly was sufficient in the past but actually their needs have now changed but they are too busy or engrossed in their day to day operations to have yet addressed this
Does any of this resonate with you?
If yes, then it can be very easy to change how things are done if the desire is there. Here are the steps we would recommend if you are considering making a change.
Step 1 – Think about and write down what it is that you need and want for your business and how often you need this information.
Step 2 – Consider what systems you are using which you feel should be able to give you the information you need. For example, you may have a great EPOS system which collects detailed sales information which you can review daily and so you wouldn’t need to rely on your bookkeeper’s accounting system for this information on a daily basis.
You may use a CRM system which manages your sales invoicing process and so again it will you don’t need to reoly on your accounting system being frequently up to date.
However, if your purchasing is all being handled in your accounting system then you can’t use it to track which of your suppliers need paying on a weekly or monthly basis if you only have quarterly bookkeeping done.
If you want to be able to make decisions in your business using financial information, then you will want to be able to see a profit & loss report out of your accounting system on at least a monthly basis.
So there are lots of questions to ask yourself here.
Consider using an accounting system that lends itself to being kept to date on a daily, weekly or monthly basis like the cloud based softwares such as Xero, Quickbooks, Kashflow and Freeagent and that is user friendly for business owners to able to use or review and access information when you need it rather than needing to rely on someone else to provide it for you.
Step 3 – Consider who is doing your bookkeeping and the frequency. If your bookkeeping is done by yourself or a member of staff, you can change the frequency that your bookkeeping is done internally to give you the information you need.
If you use an outsourced bookkeeper or accountant, talk to them about providing your services more frequently. They will probably be very receptive and able to help but if they can’t accommodate you, or are reluctant to work differently, then it may be time to make a change and find someone who can give you what you and the business now needs.
Step 4 – Like any change in how your work, there will be some initial impact operationally whilst you make the changes you need. However, we would recommend you put a review date in your diary for 3 or 6 months later where you can review how it has all gone and look at the impact and whether there is any further tweaking of your processes to be made.
As business owners ourselves, we also want to be able to sleep at nigh knowing we are on top of the finances in our business and we know how potentially stressful it can feel if we don’t feel in control. So if you aren’t feeling as in control of your business finances as you would like, then we would encourage you to do something differently in how you manage your bookkeeping and financial information.
At The Bookkeeping Department, we work with and support business who want to work with Xero accounting software which is a great business tool for business owners. We help businesses who want to set up Xero, who would like Xero bookkeeping training or who would like us to provide Xero bookkeeping support on a short or long term basis.
If we can help you in anyway or if you would just like to have a chat, then please don’t hesitate to contact us on email@example.com or Tel: 01462 455455.