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What Every Bookkeeper And Accountant Needs To Automate In Their Business

What Every Bookkeeper And Accountant Needs To Automate In Their BusinessIf you want to save time and money, you need to automate. A good, effective automation allows some tasks to happen automatically, improving the customer experience and cutting the cord that has you at your computer all day.

If you want to save time and money, you need to automate Click To Tweet

But automation also takes time and some tech know-how. Sure, you can pay someone to do it for you, but that defeats the “saving money” part of setting them up in the first place.

I recommend starting small and building from there. Automate some of the most essential functions in your business and then add on as you have time. What are those essential automations you need to set up now?

Your Calendar

How often do you exchange emails with a client that look like this:

  • You: Let’s get together to talk about your monthly bookkeeping. I’m free on Tuesday from 3-5 p.m. and Thursday from 8:30 a.m. to noon. Let me know what works for you.
  • Client: Great! Unfortunately, I’m not free during those times.
  • You: Okay, how about Friday between 10 a.m. and 2 p.m.?
  • Client: I’m heading out early on Friday. That won’t work.
  • You: Have a nice long weekend! Let me know when you are available.

Then, crickets. Which means you have to follow up with the client and go through the whole process again. It’s frustrating for both you and the client and it’s a colossal waste of time.

Instead, the email exchange should look like this:

  • You: Let’s get together to talk about your monthly bookkeeping. Here’s a link to my calendar. Find a time that works for you in the next two weeks and I’ll talk to you soon!
  • Client: <books appointment>

It’s easy, painless and you just saved a few days of bouncing emails back and forth. Plus, quality scheduling software like Calendly will automatically add the appointments to your calendar, send reminders to the client and allow you to set up multiple appointment types.

Email Templates

You’ve probably sent a payment reminder email 100 times to 50 different clients. Or a request for documents–every time you onboard a new client. If you don’t have automated emails that request information from clients or prospective clients, it’s time to build some email templates and automate them.

If you don’t have automated emails that request information from clients or prospective clients, it’s time to automate them. Click To Tweet

Within your client relationship management (CRM) platform, you can create templated emails that are sent out at designated times or after specific milestones in a project. Often, you can also customize these templates for specific types of clients so they never really feel like templates.

Contracts

A lot of business owners rely on DocuSign for contracts, which I believe is an unnecessary expense and a good way for these important documents to get lost. When housed outside your CRM, contracts and other forms tend to get clunky and easy to misplace and add an extra step to save them to your internal client folder. Not only that, but many business owners build new contracts from scratch for every client. I agree that many projects have special stipulations, however, it’s not necessary to start from a blank slate every time.

I recommend creating standard contracts within your CRM, such as 17hats or Dubsado, and customizing those templates as needed and when needed. You can also set up the automation so when the client signs the contract, they automatically receive their invoice or another form.

Setting up these and other automations within my business has saved me so much time. Because I worked in the industry for so long prior to branching out on my own, I knew exactly where to start and how to add new automations and workflows to help my business run even more smoothly.

If you’re struggling with getting your automations set up, I have a workflow template shop that can get you started. The Business Workflow Template Shop has templates and automations for those in the bookkeeping and accounting industry as well as other small business owners. Check it out today and start saving yourself some time! And if you need some help getting started, check out my Case Study for the Solopreneur and watch my free webinars on creating your own step-by-step Lead or Onboarding workflow.

What It’s Like To Work With A Consultant

What's it like to work with a consultant?There’s a big difference between coaching and consulting, and both are vitally important to the success of your business–no matter what stage you’re in.

A coach is a good investment when you’re looking to jump a mindset or business hurdle, like getting to the next income bracket or overcoming a challenge with pricing your services. They’re often certified in coaching and work with businesses across a wide range of industries. A coach will talk you through decisions and then help you come to an outcome that feels right for you.

But a consultant is different. They’re still a good support system in your business, but they’re truly an expert in their industry. A consultant has had measured success in what they do and can look at your business and really analyze the steps you need to take to meet the goals you want to reach.

A consultant isn’t going to help you decide what feels good. A consultant is going to tell you what you need to do to get where you want to go. It’s more strategic and it’s more definitive.

A consultant isn’t going to help you decide what feels good, they’re going to tell you what you need to do. Click To Tweet

If you’re feeling stuck in your business because you’re not reaching the goals you defined for yourself, you may need to invest in a consultant. Especially if you want to be in a growth phase of your business.

What should you look for when hiring a consultant?

Accounting and bookkeeping consultants come in all shapes and sizes, just like any business owner. I recommend doing your research to find a few consultants that resonate with you, then getting on the phone or Zoom with them to make sure that you have a camaraderie with them. The consultant you hire should have documented experience in reaching goals similar to what you’d like to do.

Any consultant you hire should have documented experience in reaching goals similar to what you want to do. Click To Tweet

Aren’t consultants my direct competition?

It’s true that consultants should have expertise in your field and in the specific goals you want to reach, but that doesn’t make them your competition. Many consultants are no longer practicing in their industry, preferring instead to help others get on their feet. And those who do still work in the industry tend to work with higher-end clients who you likely won’t pursue. Either way, you should be careful that the consultant you hire have a confidentiality agreement and non-compete clause in their contract.

What if I don’t want to do what my consultant recommends?

Of course, your business is yours to do with what you’d like. But candidly, you hired the consultant for a reason. And consultants aren’t cheap. If you’re morally or professionally opposed to the consultant’s recommendations, have a conversation about it and see if something else fits better for your business. Remember, too, that you’ll want to do a lot of research on your prospective consultant before plunking down money on a large consultation package.

What resources will a consultant bring me, aside from ideas?

Since consultants have been in their fields for many years, many have systems and workflows they’ll help you implement in your business. Personally, I have a Business Workflow Template Shop and I often share these templates with my consulting clients–so they can quickly and effectively implement the strategies I recommend.

How To Set Up Your Internal Accounting Processes

How To Set Up Your Internal Accounting ProcessesWhen you’re hiring an accountant or bookkeeper, it’s important to have a good handle on your numbers already. You’ll need to provide a list of recurring expenses and access to bank accounts, along with some other information. The bookkeeper you hire should guide you through this process like we do at Number Nerd.

But even if you’re not ready to hire an accountant now, there’s a lot you can and should do to prepare for when you are. Because the more you grow, the more complicated your bookkeeping will be–and eventually you will want to have a pro on your side to help.

These are my non-negotiables for every business owner. If you’re doing these things, and doing them well, from Day One, the transition from DIYing your bookkeeping to working with a pro will be seamless.

When you take care of your books NOW, transitioning to an accountant or bookkeeper is seamless. Click To Tweet

List of monthly expenses

If you have a budget with a clear list of your monthly expenses, you’re doing pretty well. But when you have that same list outlined and categorized, you’re doing even better. Knowing how much you’re spending each month in different categories (like bank charges, dues + subscriptions, insurance, continuing education, marketing, merchant processing fees, software, utilities, etc.) is key to finding leaks in your accounts. You’ll then want to review your numbers monthly and compare to the prior month (and ideally your budget) and ensure that you aren’t spending more than you anticipated and on track. It all depends on what kind of business you have, of course, but it’s something to audit quarterly.

Folder for receipts

You’re saving receipts, right? In the event you get audited, you need to have receipts to back up any business expenses and write-offs. But throwing all your year’s receipts in a folder or shoebox isn’t the best way to go, especially if you have a lot of expenses.

Saving your receipts in a shoebox isn’t going to help you keep your books organized. Stop. Now. Click To Tweet

I recommend using Evernote, Google Drive or that manilla folder to organize your receipts on a monthly basis. Each month should have its own space, and if you’re using hard copies of documents, clip them together by month. You can also group receipts by category or vendor if you have recurring expenses from similar vendors. When storing them electronically, be sure to have a standardized file naming convention. You also want to write on the expenses what they were for before you scan and save them. For example:

VendorName_TypeOfExpense_Date.pdf

XyzCoffeeShop_Meeting w/123 re xxx_Date.pdf

Have sales process documented

Every business has a step-by-step process they go through when acquiring a new client or repeat sale. Even if it’s not explicitly documented. The key is to get that process documented. How do you bring clients on? When do they pay your deposit? The rest of your fees? How will you deliver the product or service? Or do they pay at time of purchase?

Having your process documented allows you to better track costs and revenue on every sale so you can start to tighten up the process and your profits.

The more organized and efficient you are, the better. You’ll save time getting the accountant or bookkeeper up-to-speed. And even if you’re not ready to hire someone to help you keep your numbers in check, you’ll have a much better picture of your books if you keep tabs on everything now. Not only that, but you’ll be much less stressed come tax time.

Need to get your books organized? Download my 2018 Biz & Books Planning checklist to get started. And feel free to scour the blog archives as well for other helpful posts that will help you get a great handle on your bookkeeping.

Cash vs. accrual accounting – what’s the difference?

Cash vs accrual accountingAccounting and bookkeeping can be a slippery slope, especially if you’re not a number nerd. There are taxes and cash flow and budgeting to think about, plus you want to make sure you keep track of your numbers, so there’s enough money to keep the lights on. Let alone simplify what needs to be done at year-end for your CPA.

There are two types of accounting that businesses use to keep their finances on track: cash and accrual accounting. And while I have a preference (continue reading to find out), it’s important to know the difference between the two so you can make the decision about which type to use when setting up your accounting software.

During the initial setup, one of the (many) choices you need to make is whether or not you will choose cash or accrual for your method of accounting. Keep in mind the default is always set to cash. The reason being is it is a standard in the accounting world. Also, keep in mind, in your accounting software, you can toggle the reports to cash or accrual view – depending on how you need to see your numbers. But, remember, you will need to do the bookkeeping in accrual format if you want the accrual reports to look right. Note: you can setup your software to be cash and view all of your reports in accrual. A lot of Number Nerd clients do this.

There are reasons you would choose accrual. If you have a large accounts receivable and your invoices are not paid for 30+ days or more. Accrual would be my choice for you. Now, this particular instance is simple in an accounting program because you would simply toggle your Balance Sheet to accrual for the accounts receivable to show up.

Typically accrual accounting doesn’t come into play until you have been in a business awhile or when your CPA gets involved at tax time and tells you that you should make the switch and why. Unless of course, you know ahead of time (when you initially started your business) you are going to have inventory or have a large account receivable (money people owe you for services). Thus, making it a no brainer to setup your bookkeeping in the accrual method for reporting purposes. The difference is unless you meet the requirements listed in the next sentence you can choose which method you will use. The IRS states that if you are a C corporation or gross more than $5M in annual sales or have an inventory with gross sales over a $1M then you are required to use accrual accounting for tax purposes.

Know the difference between cash & accrual accounting so you know which to use in your business. Click To Tweet

 

Accrual Accounting – A Definition

According to Intuit, accrual accounting involves recording income when you complete a service or when goods are shipped and delivered. It recognizes expenses when they’re incurred and revenue when it’s earned, not when the payment is made or received.

For example, someone who sells items on Amazon would record the sale immediately, even though the payment of that sale still takes several days to process (ship out the order). Likewise, a service-based business records a sale immediately, even though invoicing terms might be net 30.

What makes accrual accounting a little hairy is that it records income and expenses at the time of the transaction, rather than when the cash changes hands. It forces business owners to keep track both of the transaction and the bottom line when a transaction is completed. For small business owners, this can get cumbersome and confusing, sometimes resulting in overdrawing an account if you’re not careful. And it does require monthly and year-end journal entries in your accounting software to “accrue” for things. So, keep in mind that this would not be a do-it-yourself accounting solution. You are going to need an expert to help you and it will take more time and expense by a bookkeeper to get this done right.

Cash Accounting – A Definition

According to Intuit, cash accounting is a simple form of accounting with “a primary focus on when cash enters and leaves a company’s bank account.”

For small to midsize businesses, cash accounting is typically the way to go. It’s gives you a better big-picture view of where your finances stand day-to-day. It’s also an easier way to keep an eye on the money coming into and moving out of your account–because you literally don’t have more cash on any given day than what’s in your bank account.

Cash accounting is much more straightforward for the small business owner, and it’s easier to keep your bank account in the black. And it makes sense when you’re dealing with smaller amounts of cash. That $1500 invoice you sent out today may not be paid for another 45 days, regardless of your payment terms. So to count it as income now just doesn’t make sense.

For example, an attorney, business coach, or bookkeeper will record a sale the moment that sale is made regardless, while expenses are also recorded right at the time of purchase.

Which is Better for You

Always talk to your accountant before making a decision about how to handle the accounting in your business. Your accountant will likely have a preference, depending on your business type and size. Keep in mind that accrual accounting will take more time to do the bookkeeping and therefore carry an additional expense with that time.

Want to change up the way you keep your books? Talk to your accountant first! Click To Tweet

In my opinion, cash is always better unless you need to use accrual accounting financial or tax purposes. It gives a truer picture of where you are at financially in your business, and they money you have now, in the bank.

Do you know what your monthly overhead expenses are in your business? Keep track with my worksheet!

How To Keep Tabs On Your Leads

How to keep tabs on your leadsIf you want to grow your business, you need to add new customers to your roster. That means seeking out–and signing–leads as customers. But first, you need a way to collect them and then keep tabs on them so you can follow up regularly (without being sleazy).

Having a system in place lets you track where leads are coming from, what they ask about and how you’ve responded to their requests. A system also provides a way to look back at your communication so you know if you offered them special pricing or other considerations.

So what do you need to make this all happen, so those leads turn into happy customers?

A customer relationship management (CRM) tool.

There’s an endless number of CRMs out there to keep track of your customers and leads; I like (and use) 17hats. A CRM can capture lead contact information and place each lead in a workflow or email sequence so you can start a conversation with them.

A CRM lead capture form embedded on your website.

Prospects come to your website to find out more information about you and to get in touch with you. A lead capture form collects their name, email address, phone number–any information you’ve indicated is important for you to be able to respond to them. Number Nerd’s is pretty detailed, check it out here! I actually use my own capture form as a bit of a “test.” If it’s not filled out prior to our introductory call, an auto-responder reminds them (and I know how much additional follow-up I might need to do if we work together).

Embedding lead capture on your website is the best way to track your leads from intro to sale. Click To Tweet

An email sequence and workflow.

You need to follow up with every lead, so it makes sense to have a sequence of emails that they receive so the lead can schedule a time with you or give you more information. A workflow is essential so you can follow up in real time and make notes about the status of the lead. Want help with this? Watch my free webinar about leads and follow-ups!

Great timing for following up.

When you send a quote to a lead, know that your follow-up timing is key. Your follow-up sequence should include three points of contact, via phone or email, about two days apart. The last time you contact the lead, let them know that you’ll be archiving their information and that the ball is in their court.

A system for coding the lead.

Even when you don’t win the lead, you’ll want to keep track of where you were in the communication process with them. Let every lead know that you’ll be keeping in touch with them, whether they choose you or not. And then follow up on that promise. You never know how that other relationship will pan out.

Keep tabs on your leads--even if you don’t win the sale! Click To Tweet

Your leads are the key to your business growth. But when you’re busy working with other clients or on your own business, it’s easy to overlook your follow-ups. Get a system down so following up is routine and even done for you!  

Need help getting started? Grab Number Nerd’s workflow and automation templates. I’ve done the heavy lifting for you!