By: Micky Deming, Director of Marketing at Kahuna Accounting
If there is one thing I have learned about providing bookkeeping services, it’s that nobody wants to talk about bookkeeping.
Profit and loss statements, bank reconciliations, receipts…it’s just a bunch of boring numbers and a necessary evil that a business owner has to take care of so they can pay taxes every year.
That’s the general mentality you get from a business owner, and I completely understand it. As a marketer, I’d also prefer to not be thinking about numbers and how to record transactions.
But what I have learned is when you open your eyes a little, you realize bookkeeping is everywhere.
The real questions business owners have, and the key decisions they need to make all rely on good bookkeeping. Now when I read articles that talk about marketing strategy or how to hire the right person, I think of bookkeeping.
Without bookkeeping and awareness of where you stand financially, how is it possible to make those important decisions?
Here are three critically important pieces in your business that are impossible without good bookkeeping.
I really loved this article by our friend Peggy Gruenke at Attorney at Work. The article simply asks, Are you profitable? 10 things to ask yourself.
Interestingly, as you go through the article, none of the 10 questions can be answered if you aren’t doing some level of bookkeeping.
You have to have some reporting or financial capabilities to be able to make adjustments and set goals for moving forward.
Having a target is crucial for success. Without defining a destination, it’s foolish to expect to get there. It’s equally foolish to determine some arbitrary destination without a plan to get there, or a measurement to know whether you are progressing toward it.
This article is fabulous and informative, but it’s hard to imagine it providing any value at all, unless you can pull some of the reports and numbers mentioned.
Hiring, Getting Help and Making Key Decisions
While you will be hard-pressed to find an article written about bookkeeping anywhere on your favorite business blogs, you won’t have to look long to see headlines like: When to Hire…How to Add to Your Team…When to Invest in Talent…and the list goes on.
Once again, the place to start is to have a financial dashboard and reporting to let you know what adjustments you’ll have to make and what resources are available at your disposal.
We are extremely fortunate at Kahuna Accounting CFO level leadership.
As Kahuna Accounting has grown, we can lay out a plan for how many clients on average each of our accountants can serve, when to add the next one and what our margins will be based on the number of clients served and average price.
For the marketing team, this makes things easy, because we can continue to add new clients, knowing we’ll always be ahead of our growth, because there is a financial plan in place to accommodate expansion. Or, to put it in simple terms, our financial insight allows us to look forward – rather than backward.
This comes up in conversations pretty regularly. When someone is considering hiring staff, that’s when they come to Kahuna to help them with bookkeeping.
“I think I need help, but I have no idea if I can hire someone right now,” is a statement I’ve heard several times.
Marketing and Focusing on what Drives Business
The main reason nobody wants to talk about bookkeeping is because it doesn’t directly drive new business.
“All this bookkeeping talk sounds great, but I need more customers and clients. I need to be getting business, so if you can show me how to do that I’ll be a lot happier.”
Here’s a not-surprising fact about me – a marketing guy. I never do bookkeeping.
Do you know why?
Because I suck at bookkeeping. And it’s a horrible use of my time.
I’m good at marketing and writing, so that’s what I do.
I spoke with a very intelligent attorney a few weeks ago, who gave a great explanation why he wanted his firm to work with Kahuna Accounting.
“I have an assistant who handles the bookkeeping just fine, but she’s a really talented marketer. I want her to spend as much time as possible doing marketing and growing business, so if you can take bookkeeping off her plate, that would be really helpful.”
Sometimes the question is not about if you can do the bookkeeping, it’s if you should be.
Your time is best spent making money and serving clients. That’s a key for every business, but the harsh reality is, somebody has to do the books. It’s best to find a way to have them get done without pulling you away from the things that are most valuable for your business.
You may not like talking about bookkeeping, but you need the numbers that allow you to have a plan for profitability. You need to look forward so you can make informed decisions. And you need to spend your time driving business and serving clients.
We just won’t call it bookkeeping.