Contributor: Kathryn Freeman, Director of Operations & Sr. Business Coach
When any new contractor starts with Nolan Consulting Group (NCG), often the first question we ask (followed by, is your Vision documented) is “do you have a bookkeeper and can we get financial reports to truly understand your business?” Good bookkeeping is the very bedrock of all that we coach to and, we believe, can give you most of the information you need to make the right decisions for your business. Often we encounter a business owner who is doing the bookkeeping on their own. Our second recommendation is get out of that hourglass and hire a bookkeeper!
When looking at the role of bookkeeper there are a few skills and behaviors that are necessary:
- Between 5-7 years of experience in the software system that you use
- Quickbooks is our preferred system
- High compliance as a behavioral style
- Time for a weekly or bi-weekly meeting with you (if hired as an independent contractor)
- Interpersonal skills (if hired as an employee)
- Some experience in your industry or a willingness to learn about your industry
This role can be part-time or full-time depending on the size of your business and the tasks that your office team can handle. You can also hire a business to assist with the function, like Bookkeeping for Trades. Our thought is your accountant is taking care of your tax needs at the end of each year (or quarter), your bookkeeper is responsible for getting your numbers right in the moment.
As with any other discipline, we recommend a regular financial meeting with your bookkeeper. This agenda, which I call the money in money out meeting, should be a regular look at:
- Days cash on hand (not to include Savings reserve or any tax savings)
- Anticipated payroll
- Anticipated payments on current projects
- Anticipated bills and decisions on what to pay and when to pay it
- Accounts Receivable check, over 30-60-90 days outstanding
Once a month, have a meeting that includes a drilled down look at your Profit and Loss, giving you an opportunity to question your accounts, to make sure that things are being allocated correctly. This may be a part of the call with your Coach or in addition to that call. This is a great place to mention, much of an actual bookkeeper’s role is to complete Level 1 tasks (don’t know what that means, take a listen to our Levels of Work podcasts!): bill paying, reconciling credit cards, chasing vendor invoices. It is your job, as an owner or other executive leader to evaluate the work, question the accounts and hold your bookkeeper accountable.
As your business grows, so too will your financial needs. Work closely with your coach to determine when you may need to move from an outside contractor to an Employee or from a bookkeeper to an Accounting Manager or Controller.
As always, if you have any further questions about what a bookkeeper does or the value that they can add to your business, take a listen to our recent Out of the Hourglass Podcast on this topic or give us a ring, it is one of our favorite topics and we’re happy to connect!