Hey all, Happy Thursday.
Thanks for tuning in for another Thursday Thoughts session with me.
Thursday Thoughts are where I share new ideas, lessons learned, advice, and takeaways from my life as an entrepreneur, business investor, stock investor, marketer, and advisor.
On a day to day basis, I work with a handful of businesses working to scale faster, get the proper systems and processes in place, and automate everything as much as possible by hiring the right people.
This past week has been a busy one with a lot of conversations with extremely interesting entrepreneurs and businesses.
One common theme that I want to talk about today is how to handle your bookkeeping properly.
It’s one of the most commonly overlooked parts of a business that I’ve run into in this past week, but it is absolutely paramount to running a profitable and efficient business.
Shouldn’t you know every number that goes along with running your business?
How can you make proper decisions when your bookkeeping doesn’t accurately and consistently tell you exactly what’s going on with your sales, expenses, and profits?
These are questions I’ve found myself asking in the past week as we’ve been talking to some businesses.
And it’s nothing against these companies. They are lead by completely able entrepreneurs with tons of promise for the future, but it just keeps coming up that bookkeeping is one are that is overlooked.
And it doesn’t surprise me too much either.
In my experience, bookkeeping was never something that I got excited about and it’s always been something that we’ve outsourced to talent in the Philippines.
And that’s what I want to talk about a little bit…
…how to set up your bookkeeping properly so that it’s actually an advantage you have over other businesses and your competition.
Tip #1: If you haven’t already, make sure that your bookkeeping is outsourced to someone that actually enjoys bookkeeping and knows what they’re doing.
It won’t cost that much and it won’t have to be something that you’ll have to worry about ever.
If you’re an Amazon business, get an Amazon bookkeeper that will understand your business.
Same deal if you’re an eCommerce business, make sure to get an eCommerce bookkeeper that knows the eCommerce platform that you’re using. For example, getting a Shopify bookkeeper if you’re running a store on Shopify.
And if you’re an agency, software company, coach, consultant, or service provider, check out AccountsBalance.
Tip #2: Get a tax accountant for the country that you live in that can work alongside your bookkeeper to handle yearly taxes and other accounting issues that come up.
It will take some work to get them working together simultaneously, but then it’s all set up and you don’t have to touch it at all anymore.
Tip #3: Get a monthly Profit and Loss statement made by your bookkeeper at the end of every month and have it sent to you and your other others within 10 days after the end of each month.
With this report, you can clearly see how your sales did, what you spent money on, and what your profits ended up being.
It’s not until you have an absolute clear picture of your business in a P&L that you can start making smart decisions for your business.
Tip #4: Meet with your co-owners and any advisors that you have to go over the P & L at the start of every month.
Use this time to plan your spending for the next month, talk about growth goals, figure out how to increase sales, and target specific profit numbers so that you’re all on the same page.
When you set up your bookkeeping and accounting to run in this way, you set yourself, your co-owners, and your business up for success.
When you fail to do this, you create more risk in your business…that was inflicted by you!
You know how sports coaches will sometimes say “The only person that can beat you guys is YOU!”
Well this is that type of situation…
If you fail to set up your bookkeeping and accounting properly, you’re beating yourself up and making it harder for you to succeed in business and entrepreneurship.
Take the time to get your bookkeeping properly set up by hiring the right people, setting up the right processes with them, and holding them accountable to getting it delivered each month.