10 Methods New Enterprise Purchasers Can Hold Good Books


Except your new enterprise purchasers come from an accounting or bookkeeping background, they’re not going conversant in accounting software program or terminology.


Sadly, they typically can not afford to pay for even our most simple companies. And, regardless that we need to assist them, now we have to maintain our personal workloads and profitability in thoughts. This typically leaves new enterprise house owners to do their very own bookkeeping.

Fortuitously, that is an space the place we as skilled bookkeepers can assist, supplied that we comply with a number of tips as we advise new enterprise purchasers to maintain their books in good condition.

1. Hold it easy. Bear in mind, enterprise house owners aren’t accountants or bookkeepers. The issues that come simple to us with our years of schooling and expertise are utterly overseas to them. If you’re advising a brand new enterprise proprietor on methods to do their bookkeeping, maintain your explanations so simple as doable.

2. Encourage the usage of (applicable) software program. Budgets for brand new companies are notoriously tight, and lots of new enterprise house owners are tempted to make use of low cost or free accounting software program. This has a number of pitfalls:

  • It’s typically arduous to seek out assist for affordable or free software program.
  • The software program can have bugs that solely an skilled monetary skilled can detect.
  • Free software program is commonly single-entry as a substitute of double-entry, growing the probability of hard-to-diagnose errors.
  • When the enterprise proprietor is able to improve, they may have to begin their books over from scratch.

Encourage new enterprise house owners to put money into the most effective software program they will…however once more, maintain it easy. Suggest solely as a lot because the enterprise wants proper now. You’ll be able to assist them improve or add apps as they develop.

3. Present them with a chart of accounts. Once more, simplicity is the important thing right here. Create a easy chart of accounts that can present the enterprise proprietor with sufficient element to provide good experiences, however not a lot that they get slowed down within the particulars. And discourage them from creating new accounts on the fly, as this is without doubt one of the best methods for non-accountants to create messes within the books.

4. Assist them perceive the related experiences. I’m not speaking about full monetary evaluation right here. Bear in mind, we’re advising these new enterprise house owners on methods to maintain their books in good condition. Your rationalization of the P&L and Stability Sheet must be restricted to that, not less than at first. Clarify to them which accounts ought to by no means present a damaging stability and methods to run a side-by-side comparative report back to detect potential errors. And that’s it (not less than for now.)

5. Forbid journal entries. Okay, possibly “forbid” is just too robust of a phrase. However on the very least, we must be heartily discouraging new enterprise house owners from creating journal entries. Every little thing a brand new enterprise proprietor must do of their accounting software program will be achieved with a form-based entry (gross sales receipt, bill, invoice, and so forth.)

6. Clarify checks and balances. Enterprise house owners ought to put checks and balances in place the second they rent their first worker or contractor…even when that individual doesn’t handle the bookkeeping for them. Clarify the significance of checks and balances and the easy steps the enterprise proprietor can take to cut back the danger of worker fraud.

7. Present primary coaching. That is the best possible method to make sure a brand new enterprise proprietor retains their books in good condition. Present them methods to categorize transactions of their financial institution feeds and full different easy issues they may have to do, like creating invoices. Warn them in regards to the frequent pitfalls of AI, like incorrect account solutions (what’s an Uncategorized Asset, anyway?) or making use of an incorrect payee identify to a verify.

8. Contemplate providing oversight. If in case you have the capability to take action, providing month-to-month and even quarterly oversight of the brand new enterprise’s books can provide each you and the enterprise proprietor peace of thoughts. Right here’s the caveat: It’s important to decide to not fixing errors you discover. As a substitute, create a video explaining the issue and the right strategy to make the entry, after which have the enterprise proprietor repair the error. This is not going to solely forestall you from doing clean-up work without spending a dime, it’s going to additionally encourage the enterprise proprietor to change into extra astute about their bookkeeping.

9. Test in ceaselessly. New companies change into established companies shortly, and the enterprise proprietor who has time to do their very own bookkeeping at present might not have time to remain on high of it three months from now. Checking in with the enterprise proprietor ceaselessly retains you high of thoughts when they’re able to relinquish the bookkeeping duties for his or her enterprise. Furthermore, your job can be simpler if the books are only some weeks behind versus being months behind.

10. Be affected person. Bear in mind what it was like whenever you first began your bookkeeping apply. You most likely did every part your self…together with the belongings you weren’t that good at. And it was most likely actually arduous to let go of a few of these issues as you grew…together with the belongings you didn’t significantly like. AND you most likely weren’t significantly keen on “outsiders” implying you had been doing issues incorrectly…even in case you’d employed them that can assist you with your corporation.

Ultimate Ideas

All of this holds true with different new enterprise house owners. Count on pushback, even on issues the enterprise proprietor admits to not realizing a lot about. Be affected person when it occurs. The enterprise proprietor will thanks for it, sometime.

The important thing to advising new enterprise house owners on methods to maintain their books in good condition is to maintain your recommendation so simple as doable and matched to the enterprise’s wants within the second. Put some guardrails in place to assist forestall errors and messes, and verify in ceaselessly so you may advise the proprietor in a extra strong method when the time is true and the enterprise’s funds assist it.

Need to hear extra from Billie Anne, reside and in-person? Be part of us in San Diego, California Could 9-12, 2022, for AccountingWEB Dwell Summit, a brand-new in-person convention and networking occasion for accounting professionals. 

Hear from many consultants within the business on the way forward for accounting, uncover new fintech for the digital age, and attend CPE accredited periods to maneuver your corporation ahead. After two years of lockdown, you may spend time assembly like-minded professionals discussing ideas, tips, and the challenges you face at breakfast briefings, networking lunches, and an unforgettable off-site dinner occasion. Study extra at https://www.accountingweblivesummit.com/summit-what-to-expect


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