3 Important Questions to Ask Your Bookkeeper Today
 |
Free Download - QuickBooks 2010: Will I Lose My Data if I Upgrade? By Scott Gregory |
I know you're busy running the business and don't have much time to worry about the bookkeeping.
However, it's critical that you reserve some time to keep tabs on this extremely important function within your organization. Ignoring your bookkeeping can lead to all sorts of bad things down the road, including:
• Incorrect or non-existent financial reports - without good numbers, how are you going to make good decisions?
• Penalties and/or interest on missed or overdue payments - you could be racking up these charges and not even know it!
• Fraud and/or theft - unfortunately, this is a growing problem within small businesses that don't spend the time to set up their systems and procedures properly
Here are 3 questions to help get you started in a meaningful dialogue with your bookkeeper:
1. Are all of our payroll deposits made on time and our payroll tax returns filed on time? If you have outsourced your payroll to a third party company like PayCycle or Paychex, this isn't even an issue to worry about.
However, if you do your own payroll, things can get really fouled up and deposits made late or missed completely and returns never filed. The bad news for you is that the tax agencies don't usually accept "I forgot" as an excuse to waive the penalties and interest that accrue for late or missing tax deposits and returns.
Even worse, you can be held personally liable for these missed payments (more on this issue in a future post)!
THE TEST: Pick a couple of recent months or a quarter and have your bookkeeper pull all the related tax forms, reports and payments. Are you able to verify that everything was done on a timely basis - how do you know? If you are doing your own payroll, ensure there is a master schedule prepared each year of exactly what is due and when. From there, it's easy to figure out what got done on time and what didn't.
THE HEADACHE STARTS: When your bookkeeper can't provide any of this information, says "they'll get back to you" and don't, or they get indignant that you even ask about this in the first place!
2. Are all of your bank and credit card statements reconciled on a timely basis? The reconciling process is nothing more than ensuring the transactions recorded in your accounting software match those as recorded by your bank or credit card issuer. Nothing more than that. Unfortunately, in many businesses, this is made out to be a process more complicated than calculating the interest cost on the federal debt. It doesn't have to be.
Good bookkeeping practice dictates that these accounts are reconciled shortly after the receipt of the statements. This allows any discrepancies to get ironed out fast.
THE TEST: Ask your bookkeeper to show you the most recent reconciliations for your bank and credit card accounts. If you are using QuickBooks or other accounting software, the ability to reconcile is built-in.
TEST #2: Have you taken time to spot check the canceled checks and charges that appear on these statements? If you haven't, you should! This is a great way to quickly spot what we'll call "suspicious activities" going on with your bank or credit cards.
THE HEADACHE STARTS: When your bookkeeper says (pick one): they don't have time to reconcile and do all the other work you ask them to do; they'll get around to it one of these days, they don't know how to use the reconciliation feature built into your accounting software.
3. How long does it take to close out the month and prepare the financial reports for the business?
A well tuned accounting system should allow your month-end to be completed in five (5) days or less. If you are still waiting on your profit and loss statement from December 2008, you've got some problems indeed!
It is critical to get timely and accurate financial reports at the end of each month so you know where you are, where you've been, and where you're going. These serve as your financial roadmap to get there.
If it is taking longer than five days for this process, it tells me you have some areas within your accounting area that need to be streamlined or tightened up a little (or maybe a lot!).
THE TEST: Go ahead, ask your bookkeeper how long it takes them to close out the month...
THE HEADACHE STARTS: Immediately. In some cases, you'll get a blank stare. In others, you'll be told - we only do our statements once a year when the tax guy does them. And in others, you'll then be asked to sit down so you can hear the litany of reasons why it is so hard to close the month and why it takes so long to get it done.
There are many other questions to pose, but these three will likely get you pretty involved for quite a while (and I feel your pain!).
It's your business - don't settle for "good enough" when it comes to the management of your business finances!
3 Important Questions to Ask Your Bookkeeper Today - To learn more about this author, visit Scott Gregory's Website.
Like this article? Share it with your friends
|
Article Tags:
bookkeeping for a small business,
outsourcing the bookkeeping,
working with a bookkeeper
Recent Search: accounting important question |
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Kalena JordanKalena Jordan is the search industry’s first agony aunt, here to answer your tricky questions about search engines. Kalena is Co-Founder and Director of Studies at Search Engine College, an online training institution offering instructor-led short courses and downloadable self-study courses in Search Engine Optimization and other Search Engine Marketing subjects. She’s been marketing websites online since 1996 and blogging about search since 2002. For her full bio, view Kalena’s Linked In Profile. When not working, Kalena likes to go geocaching, hiking or fishing. She also plays a mean darabuka. - Visit Kalena Jordan's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Scott's articles
 | |
|
|  |
 | |
|
| |
 | ||
 |
||
 |
||
 |
||
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
 |
 Relationships and Referrals Instant Newsletters Why Banks Say No eguide The Leader’s Edge How To Win New Business |
|
 | ||
 |
Top 50 Political Blogs
Top Political Blogs of 2009 | |
 |
Top 50 Business Plans
Top Business Plan Blogs | |
| ||
 | ||||
| ||||
|
 | ||||
| ||||
|
|
 | ||||
| ||||
|
 | ||||
| ||||
|
|
|
||||||||||||
 |
|
|
|
 | ||||||||||
|
| ||||||||||
|
|
||||||||||