Trainer & Consultant, Getting your accounting systems working

Despite what the banks are promoting, they are very reluctant to lend money, short term or long term or overdraft facilities. The local Bank Manager has no powers to grant any funds to their clients. They are their Customer Liaison Manager or similar title, lending decisions are done by head office. So how do you avoid being refused by your bank for a loan, plan ahead. you should have Monthly Financial Reports such as the Profit & Loss Statement and Balance Sheet always available to you. So in the last few weeks I have been working on Profit and Loss and Cash Flow statements constantly. The plan is to always be ahead. Avoid any cash flow squeezes and unless absolutely necessary approach the bank, but approach the bank with real numbers and be able to answer every question they may throw at you. Because despite what there PR says, they are not giving out money to small businesses. And in fairness to them, may small businesses are unprepared when going to their bank. The banks have money but they are not giving it away. If you want some you better be prepared for every possible reason that they may turn you down on. The good days are gone! money is hard to get.

I have this week wrote many reports. Good reports take time and are short. The contain facts and can make clients uncomfortable. Since I deal in numbers my reports can contain lots of financial information. The cost to systematise a clients accounting system, write procedures and ensure they are followed depends on the client having people to do the work. But the one thing each of these reports had in common is that they all indicated that my clients needed bookkeepers, real bookkeepers, not administrators, but someone who understood bookkeeping. A person who likes numbers and who must get things to balance. Someone who will chase after the business owner for all the little expense receipts, pester them when they don't fill out the cheque stub and most importantly have financial reports prepared for when they are needed. A bookkeeper is not a receptionist, a typist, a personal assistant. People feel the need to try and get a bookkeeper to do all the tasks except that of a bookkeeper. The reports I wrote were all about the businesses financial information and how to collect it, record it and report on it. A bookkeeper will ensure that this system of collecting, recording and reporting keeps moving, but yet clients still want them to answer phones, type letters and do other non bookkeeping functions. The reports I write remind my clients about this. Why employ someone to do a job that will improve ...

In the good years that we have had, budgets were overlooked. Money was coming in and it was always possible to pay everyone and there was always money in the bank account. Times have changed and now I keep hearing people saying we should have done this budget last year and the year before and the year before that. Questions about why are we paying so much for this and why do we have a water cooler in the corner which nobody uses except when someone wants to water the plants. We had money and a water cooler in the corner looked nice. Now more than ever budgets are critical. No longer can you rely on sales to come in to your business, you now have to go and get business. But not only do you need to get business, you need to know how much sales you need to get just to stay in business. Now that money is tighter, you must focus on why have you been spending money on items and ask are they really necessary. For example: You have 10 phone lines and four people who can answer them and 10 phone lines was too many in busy times, why do you need them now? Every line costs money even when it is not in use. The mobile phone plan you signed for when you had 10 sales reps, now you have 5, do you need that many minutes on ...

While the basics of bookkeeping are obeyed by accounting software, software companies that have many different versions of software for example, an entry level, mid level and high level version, add additional features to get more form the bookkeeping basics, for example, project costing and invoice printing. The software company usually ends up trying to force you up their different levels by withholding useful features from a lower level version. The price the lower level version is set very low to entice you into their product range, knowing that you will most probably stay with them as changing your accounts software is a major task. They also sometimes tease you with a feature that half works in the mid level version, but to get to use the full feature you need to buy the highest level version. People fell betrayed by their account software supplier. They feel that all the software company wants is to confuse you and in so do so get hold of more of your money for no extra benefits. During the week I got hit with a few problems because software that looked like it could do the job fell down at the last hurdle, as the feature we needed was only partially available and the Sales rep who sold the software to the client had left the business suddenly. We spent a lot of time figuring out work arounds. And while we did find work arounds ...

You need to have target dates for your accounts. When will you have all your sales invoices printed and sent out to your customers. When will you have all your purchase invoices passed and entered into your accounts system. When will you have a Profit and Loss statement and Balance Sheet completed. When one of the deadlines is missed, say, not all the bank payments are entered in the accounts system, then you are not able to prepare a Profit & Loss Statement, perform a Bank reconciliation, know if all your suppliers are paid and if they were paid the correct amount, and how do you plan your cash flow. The other problem for me is that if I go to my client office to prepare monthly accounts but instead spend my time getting everything up to date to allow me to complete my primary task of preparing a Profit & Loss statement and Balance Sheet, then client does not get the best out of my time and I don't get everything done that I wanted to do. So how do you overcome this? I have prepared a list of tasks that the client is responsible for completing and I have a list of tasks I am responsible for. I will not visit the client until they have their tasks done and when I do visit them I must complete my tasks before we move on to anything else. In this way we both ...

What if I told you that you could access your accounts software from any computer anywhere in your business or anywhere in the word, even if you only have a single user (one user) licence. That is only one person at a time can have access to the accounts of your business. What you need is a network and be sure that your accounts software can be setup to run over a network. This week we set up a network where four computers could access the accounts system, but only one person at a time could use the accounts software. What this gave us was the ability to work from any computer to do our accounts and all our accounts data was now on a server that is being backed up every night. We no longer have to rely on a person remembering to do a backup or to leave on a computer at night to allow a backup to run. The server stays on all the time which means backups are done and we can turn off all the other computers at night. Having a computer network allows you to store all your information in one place rather than spread across multiple computers in your office. Your word processing documents and your spreadsheets are automatically available no matter how many computers you connect to your network. This also allows all these files to be backed up quicker and more securely as ...