Separation of Duties

Separation of duties …

also known as Segregation of Duties or SoD, is an internal control that many businesses use to protect it and its employees from potential error and fraud by having multiple people involved in the completion of a particular task. (say THAT 5 times fast!)

This can be difficult for some businesses to achieve, but should be implemented as much as possible.

Heres how!

First, consider who is responsible for tasks such as:

• opening, sorting and dispersing mail

• making purchases on the company account

• recording and entering transactions into the accounting software

• reviewing and approving bills

• paying bills

• signing checks

• making deposits

Next, split it up!

Accountability is crucial! Make sure that everyone is aware of these controls and be sure to delegate these tasks in a way that your TEAM understands what is expected, when they should complete their part and who will be reviewing their work.

By having proper checks and balances in place, a business should be able to catch errors and fraud immediately, or better yet… prevent them altogether!

Can you relate ??

CAN YOU RELATE TO A DESK OR OFFICE THAT LOOKS LIKE THIS ??

Let’s talk electronic file organization!

When it comes to organizing files and information within your business, you should choose a structure and system that works best for YOUR specific business. One that is efficient and easy to use for everyone in your organization.

Here are a few ideas to consider:

• store documents in a shared location such as a network drive or shared cloud storage so others have easy access to those documents

• group by category or department by creating folders for each *HINT: keeping it broad will allow you to add new files as you grow ;)

• use subfolders by breaking down each category group or department even further

• organize by date = easier to find

• use clear and descriptive file names

• be consistent!

Another easy and efficient way to organize and find files would be to attach them to their corresponding transactions within your account software. Need help? Click here!

What Questions to Expect From Potential Bookkeepers

So, you’ve decided to outsource your bookkeeping and hire a professional and you’ve got your list of questions ready to ask your potential candidates, but… I bet you didn’t expect your potential candidates to have a list of questions ready to ask you!

What questions should you expect from your potential bookkeeper?

Here are just a few questions that I like to discuss with my potential clients.

• Tell me about your business (your potential bookkeeper should care how long you’ve been in business and why you started)

• What bookkeeping services are you interested in?

• What bookkeeping software do you use?

• How many bank accounts do you manage?

• When were these accounts last reconciled?

• How many transactions do you have per month (average)?

• Are your books/taxes up to date?

• Who does your taxes?

• What do you enjoy in your spare time?

It’s all about finding the right fit, right? And it should go both ways!

Click here if you like what you see and are interested in learning how we can work together!

Things to Look For When Choosing Your Bookkeeper

So, you’ve decided it’s time to outsource your bookkeeping and hire a professional!

What should you look for?

What questions can you ask potential bookkeepers to determine whether or not they would be the right fit for you and your business?

Do they have the knowledge and skill you need?

Notice I said knowledge and skill. There is a big difference between these and experience. Just because your prospective bookkeeper has little (or no) experience does not mean that they lack the knowledge and skill you might be looking for.

• Are they certified in any accounting software?

• What type of education have they received?

• What skills do they have that overlap into the bookkeeping world such as organization, communication, attention to detail, problem solving, etc.?

Are they experienced in your industry? If not, are they ready and willing to learn?

[insert your industry here] expert? Great! But if not, again, just because a prospective bookkeeper may lack experience in your industry does not mean that they couldn’t still be the perfect fit. You need to determine how flexible you are with any potential learning curve. Perhaps their passion outweighs the lack of experience?

How do they price their services?

Some bookkeepers charge by the hour while others charge a fixed monthly fee. If they charge by the hour, does their rate fall within your budget? How do they track their time? If they offer fixed monthly fees, be sure you clearly understand what is (and what is not) included in that fixed rate.

Do they fit within the culture and vision you have for your business?

Ask them to tell you about themselves.

• Why did they become a bookkeeper?

• What are some of their personal interests?

• What types of things do they enjoy when they aren’t working?

• What are they passionate about?

This list should get you started, but a final piece of advice.. Trust your gut. You know your business better than anyone.. and finding a good fit for your team is invaluable.

Click here if you’re interested in finding out if we would be a good fit!

Why Reconcile?

Because it’s absolutely necessary! Check out the 4 reasons below.

1.TO IDENTIFY AND RESOLVE ERRORS

This could include encoding errors on either the bank OR business side, a transaction that double posted, unexpected fees, misread receipts, check printing errors, etc. The earlier you discover an issue (generally) the easier it is to correct.

2.TO DETECT FRAUD

The only way to identify fraudulent transactions is to see them when they hit the bank. Whether it be a compromised credit card or an intentional action within the organization, the reconciliation process is what will expose it. The bank statements will show the transaction which will lead to an investigation/follow up. Again, the earlier you discover an issue (generally) the easier it is to address.

3.TO MONITOR CASH FLOW

Reconciling your statements consistently gives you the opportunity to see how much cash is actually available in your accounts as well as the relationship between when money enters your business and actually hits the bank. This allows you to create proactive collection and payment processes.

4.TO AVOID SURPRISES

This could include checks that vendors may have held for awhile before presenting to their bank or payments that may have been lost in the mail. When statements are reconciled consistently these types of transactions should stand out. Use the opportunity to be proactive; avoid late fees and add value to the relationship with your vendors.

Best Practice: Reconciliation should be done at least once per month (some find it beneficial to do more often) by someone who is not responsible for issuing checks.

How to Create an Efficient Accounts Payable Process

One of THE most important things a business can do is maintain a good relationship with their vendors and PAY BILLS ON TIME.

Here are a few tips to consider when creating your Accounts Payable process.

• Be sure that your Vendors are set up properly in your accounting software. Include a contact name / phone number / email address, payment address, and payment terms

• Enter bills in a timely fashion. Be sure to verify vendor details for each entry (payment terms/due date and payment address), add a description if necessary (when in doubt add detail!), and attach the bill in the accounting software for easy reference later. Also consider making notes on each bill as they are received, such as date received, initials from person(s) receiving and/or entering the bill, and when possible, the coding to be used in the accounting software. These notes may come in handy if you ever need to refer back ;)

• PAY BILLS! Consistently review the Unpaid Bill Detail report and be sure to pay far enough in advance to allow for mail time, but not so early that it will negatively affect your cash flow. Hint: Paying online whenever possible can be a beautiful thing ;)

• Separation of duties. You don’t need 10 hands in the pot, but at least 2 isn’t a horrible idea. It will help to keep each other accountable to be consistent. Example: Business Owner receives bill, adds notes, and sends to Bookkeeper for entry into accounting software; Bookkeeper verifies vendor information and enters bill; Bookkeeper prepares weekly Unpaid Bill Detail report and sends to Business Owner (along with bank account balance information) for approval to release funds; Business Owner approves/denies payment; Bookkeeper prints checks/initiates payment; Business Owner signs checks; Bookkeeper/Business Owner mails payment.

As always, be sure to implement a process that works best for YOUR business, but consistency is key (where have you heard that before??). Also be sure that your process is CLEAR and that everyone involved understands their part. If you’re looking for some help in this area Contact Me and let’s chat about it!

Accounts Receivable Management Tips

Late or outstanding invoices will hurt your cash flow!

How often do you monitor your invoices? Keep reading to learn a few tips on how to make this process just a little less painful.

• Consistency is key. Stay on top of it from the very beginning. Be sure to assign this specific task to someone in your organization and put a process in place to follow up after 30, 60, and 90 days.

• Consider offering a discount to those that pay early

• Consider implementing a late fee or penalty to those that pay late

• Be sure to clearly communicate your billing process and expectations (in writing) from the very beginning

• Never be rude! Always remain professional.

• Should you need to consider the collection route, talk to your account and attorney (if you don’t have one, I’d be happy to make a recommendation! just click the link below!)

Monitoring your Accounts Receivable on a consistent basis has multiple benefits. Not only will it help you to make educated business decisions and allow you to set goals and plan more efficiently, but it will also help you to identify potential payment issues so you can be proactive before it hurts your business. Contact me to learn how I can help!

4 Reasons You Shouldn't Co-mingle Business & Personal Funds

Do you maintain separate business and personal bank accounts?

Here are 4 reasons why you should!

1. All business related income needs to be declared at tax time. Save yourself the time and headache of having to separate out personal vs. business at year end.

2. Don’t miss out on deductions! Messy records could = missed deductions. Save yourself the time and headache of having to separate out personal vs. business at tax time.

3. Clear records. Whether it be to monitor performance or provide documentation for an audit, save yourself the headache of having to separate out personal vs. business at any time.

4. Professionalism. Regardless of the type of business you have, how many hours you work, how many customers/clients you have, or where you work from, OWN IT! Your customers/clients/colleagues will take your business more seriously if transactions are coming from or being made payable to your business rather than an individual.

*Please note that separate accounts won’t provide all of your record keeping solutions, but it’s a great place to start! And it will definitely save you the time and headache of having to separate out personal vs. business later!

4 Basic Bookkeeping Tips for Business Owners

If you've been looking for ways to help your business bookkeeping be more successful, look no further!  Here are 4 basic tips you need to know to get started.

1. Record Transactions Correctly

Why

This will keep you up to date on where your money is going and how your business is doing allowing you to control cash flow and make better decisions.  It will also help make sure you don’t miss tax write-offs (keep those receipts!) or pay taxes on more money than you actually made.

How

Stay organized by maintaining separate personal and business accounts and set up a consistent recording system - whether it's using an Excel spreadsheet or software such as Quickbooks Online or Xero.

2. Set aside money for major expenses and paying taxes

Why

You'll be more prepared and less likely to need a loan once expenses arise.

How

Consistently set aside money creating separate accounts for taxes and major expenses such as inventory, office supplies, computer or equipment upgrades, and repair and maintenance.  It's also a good idea to make a note of tax deadlines on your calendar to avoid penalties and interest.

3. Consistently monitor your invoices

Why

Late or outstanding invoices will hurt your cash flow.

How

Be sure that this specific task is assigned to someone in your organization and put a process in place to follow up after 30, 60, and 90 days.  You might also want to consider implementing a late fee or penalty to encourage timely payments.

4. Avoid Cash

Why

Receipts can be easily misplaced and without a record of purchase it's very easy to lose track of these transactions.

How

Use your company debit or credit card for all transactions.

And remember, you always have the option to hire a great bookkeeper to help you make sure all of these bases are covered!  Not only does it give you more time to focus on the core reason that you started your business in the first place, it also gives you peace of mind that all of the details are taken care of and you'll have the most recent financial health records for your business available at your fingertips when you need them.

6 Ways to Improve Work-Life Balance and How It Can Actually Increase Your Bottom Line

Running a business can be stressful.   

Here are 6 ways to prevent it from running your life and how it can actually benefit your business!

1.  Stay Organized

Make lists, plan by week and create a schedule making a point to include scheduling time with friends and family as well as time for you.  This will give you something to look forward to and incentive to manage your time wisely.

2.  Stay Healthy

Exercise regularly, eat right, and get plenty of sleep.  Exercise is a very effective stress reducer.  It helps lift your mood and boosts energy level and ability to concentrate.  Be sure to dedicate a few chunks of time each week to self-care.

Hint:  these are great items to include in your weekly list, plan, and schedule.

3.  Take Time Off

Take breaks!  Small breaks are a great way for a quick reset helping to clear your head and improve your ability to concentrate.

Take vacation!  It’s the best way to recharge!  It will freshen your perspective on what needs to be done and help prevent burn out.

4.  Be Present

Create boundaries and establish rules to keep you on task whether you’re at the office or at home.  When you’re at the office, let your friends and family know that you are there to work and to only contact you in the case of an emergency.  When you’re at home, turn off your phone or laptop and enjoy the moment

5.  Delegate

Instead of trying to do it all yourself focus on the activities you specialize in and value most.  Delegate or outsource the rest.  This will give others the opportunity to grow and it will free up time for you to devote and focus on higher priorities.

6.  Be Passionate

Doing what you love will never feel like work.  Enjoy everything about what it is you do (the tasks, the people, the environment, and the opportunities) and it will be easy to stay motivated and happy in your job and in your life.

How a good work-life balance can actually increase your bottom line

A good work-life balance is essential for one to perform to the best of their ability.  As a business owner, it’s not only important to offer this opportunity to your staff but to model the behavior as well.  Good balance reduces stress, increases focus, improves efficiency, and creates a positive and inviting work environment in which employees are more committed, more productive and more responsive to the business and customer’s needs

So how can it increase your bottom line?

More committed employees = increase in retention = reduction of costs associated with hiring, training, and absenteeism

More production = more profits

More response to customer needs = increase in customer retention = higher profits

The connection between work-life balance and success (both personally and professionally) is clear and something that should not be ignored.

To learn more about how I can help you achieve this, I invite you to contact me.

4 Essential Characteristics of a Great Leader

"The most powerful leadership tool you have is your own personal example." - John Wooden

Here are 4 qualities that great leaders possess that give them the ability to connect with and motivate others.

1.  Integrity

Be honest, truthful and direct at all times, in all situations.  Always do the right thing.  Lead by example.  This will help develop trust and earn respect amongst your team, customers, and clients and provide an enjoyable environment and experience for everyone.

2.  Passion

Don’t be shy about your passion!  There’s nothing more inspirational than seeing someone do what they genuinely love to do!  Engage with your peers and don’t be afraid to share your story.  This will help make you relatable and people will follow.

3.  Positivity

Attitude is a choice.  Lead by example.  When things go wrong, remain calm and positive.  Invest in your team and build relationships.  Develop a sense of unity and provide feedback, support and encouragement as often as possible.  A happy and upbeat team is a productive team.

4.  Patience

Step back and take your time.  Focus on the bigger picture and long-term outcomes.  Don’t rush.  Allow others to learn, remembering that people do so differently and at different speeds.  Lead by example.  Take the time to listen, observe and respond effectively.  This will lead to positive and remarkable results.

Some of these characteristics may come naturally to some people while others may need to learn, develop, and strengthen them.  Either way, it is these qualities that employees look up to, respect, and work hard for.

Accountant vs. Bookkeeper

Accountants and Bookkeepers.  They basically do the same thing, don't they?  Well.. not exactly.

While the tasks often overlap, there are significant differences in the role each play to the success of your business.  So what are they?  And how do you decide which you need?

Let's first take a look at the definition of each.  

A bookkeeper is a person who is responsible for the day-to-day financial transactions that keep your business running smoothly.  An accountant is a person who is responsible for analyzing the data provided by the bookkeeper and is best able to offer tax, audit, and compliance advice.

Next, let's take a look at the tasks each could be expected to perform.  

Bookkeepers are an essential part of your business and take on the tasks related to the ongoing maintenance of your financial records.  These tasks may include:

• Transaction recording and classification
• Account reconciliation
• Managing Accounts Receivable and Accounts Payable
• Maintaining and managing the general ledger and Chart of Accoutns
• Preparing initial financial statements
• Processing payroll

Accountants are also an essential part of your business and while they are also qualified in the same areas as a bookkeeper, they typically take on more of the advisory and analytical tasks such as:

• Examination and analysis of financial records, statements, and reports
• Risk analysis
• Tax advice, planning, preparation, and compliance
• Auditing services

Now, how do you determine which you need?

It really comes down to what will work best for your business, but some of the things to consider when deciding whether you need an accountant or bookkeeper or both include:

• Number of assets
• Amount of inventory
• Number of employees
• And of course, Budget

One thing to keep in mind regarding budget is that although accountants are able to do the same work as a bookkeeper they often charge a significantly higher fee, so it is recommended that extra consideration be taken when deciding which tasks to delegate where.

The bottom line is that your accounting and bookkeeping processes contribute to the long-term success of your business so, regardless of who you choose to delegate these tasks to, it's important to be sure you have both bases covered and that they work well together.

Why should I hire a bookkeeper?

WHY should I hire a bookkeeper?? 

I mean, I do just fine keeping the books myself.  Yeah, I spend some evenings and weekends ‘at the office’ and I’m not 100% sure that what I’m doing is even correct, but hey, it’s getting done… MOST of the time.

It doesn’t have to be this way! 

Here are 3 reasons to consider hiring a bookkeeper and how it can actually HELP your business.

1.     Lack of TIME

There are 24 hours in a day.  No matter how hard we try, it will always be that way.  And as a business owner (shoot, a human being!), we can only fit so much into the time we have. So when you can, DELEGATE!  Why spend multiple hours each week with your nose in the books when you could pay a bookkeeper to do it in a fraction of the time?  Sure, it will cost money, but how much is your time worth??  What could you do with that extra time to add value in another area of your business?  Is there an area in your personal life that could use some of your extra attention?

2.     Lack of KNOWLEDGE

What IS bookkeeping?  Well, it depends on who you ask.  To some it’s ‘just’ keeping receipts and balancing the bank accounts.  To others, it’s much more than that.  It's the backbone of their business.  It's what provides them with the information they need to make educated financial business decisions and ultimately make more money. 

3.     Lack of DESIRE

If I had to guess, I would say, that unless you own a bookkeeping business, you did not start your business just for the sake of crunching, organizing and analyzing numbers.  Am I right? Do you know how to do it?  Maybe.  Is it fun?  No…well, not for most.  But the reality is, bookkeeping is a necessity for ALL businesses, no matter what type or how big or small and by outsourcing this task you’re able to have the information you need at your fingertips without the weight of doing it yourself on your shoulders.

I completely understand the desire to do everything yourself, especially if it involves saving a buck, but in the long run, does it really?  If you find yourself spending too much time on your books, putting it on the back burner because you just don’t want to do it, or are unsure of what you’re doing in the first place, there are many of us out there that would be happy to help relieve your bookkeeping burden.

Welcome!

Thank you for taking the time to check out my blog!  

This blog will allow me to engage with my community (you!) and take your feedback into consideration as I create new content, tools, and resources.

What you can expect to find here:

• General bookkeeping information, tips, and best practices (of course!), but that's not all!

You can also expect to find:

• Information related to business management, leadership, and teamwork
• Tools and resources for small business owners
• Inspirational articles and quotes
• And much more!

I promise to keep it interesting, fun, and relevant and if there is something specific you would like to see discussed here, I'd love to hear from you!