Why Your Bookkeeping is Behind and How to Fix It
Bookkeeping is something that stays on your to-do list all the time. I say this from experience because I've been there; I'm a bookkeeper and I've even put my own books off in the past. I know how we get so busy doing the things that we enjoy, we work with our clients and our customers, and we're really excited about the work we do. As for me, I keep my client’s books up to date because I love it and that invigorates me. But, I would let my own bookkeeping go to the side, and though I don't do that anymore, I have done that in the past.
Clients regularly come to me and say that they haven't touched their books for a while and that they know they need to get these things up to date, and I always ask them why they think that they put it off. I usually get one of three answers, and I'm going to go over those with you and help you to navigate through how we can fix those.
Reason #1: “I just don’t have the time.”
Life is just crazy, right? Maybe you've been sick. Maybe there's been things going on in your business, or your family, and you just don't have the time.
I hear that all the time, but I'm going to drop a few truth bombs on you here. I'm gonna give it to you raw because I'm not a sugar coater. The truth is that we all have the same 24 hours in a day. We all have the same seven days a week, but it's up to us to decide how we're going to prioritize our time. So you do have the time, you just have to figure out if it's a priority and your books definitely should be on that priority list.
The Fix: Make a List
What are some things that you need to do to get your bookkeeping caught up? The first thing may be that you need to gather your bank statements. If you're using a credit card, you need to gather those credit card statements as well.
Then, you need to figure out what you need to do and where to start. How many months are you behind? Once you know that, you can come up with a plan. I don't want you to say “I'm going to pencil in next Wednesday to get all of this caught up.” That's not realistic. If you've put it off for a long time, and you say you don't have the time, then doing everything in one day is really not realistic for you. Maybe set aside 15 to 30 minutes per day to get your bookkeeping caught up, gather all the records, and go through the process of actually getting your bookkeeping done so that you can catch up and try to get on a schedule that is realistic to maintain moving forward.
Reason #2: “I’m waiting to find a perfect bookkeeping system.”
I hear this from those who are overwhelmed by all the options and simply don't know where to start. There's QuickBooks, there's Wave, there’s Xero, there are spreadsheets… maybe I should just do it with a pen and paper because I'm an old-fashioned person. So, you just keep thinking this in your head: I'm just waiting on the perfect system, I’m waiting on the perfect system.
You're probably spending more time waiting on the perfect system than just picking something and going with it. Right? The truth is, no system starts off perfect. No matter if you've picked QuickBooks, Wave, Xero, or a spreadsheet, doing it on pencil and paper - nothing's going to start off perfectly because you're going to have to customize every single system to your business.
QuickBooks does come with a chart of accounts, which is all your expenses and your income and all the good stuff. It does come pre-programmed, but you need to customize it to your business. Spreadsheets come pre-programmed, but you need to customize it for your business. Wave and Xero: same thing.
The Fix: Consider Your Options, Pick One, and Get Started
So, there's no system that's perfect. I want you to really think about the systems that are out there for you and your business. And I'm gonna go over a couple of things with that that I want you to consider:
How much time is it going to take you to learn that system? I'm going to tell you, that QuickBooks is great, but you are going to have to invest time to learn QuickBooks. It's not a sign-up, get started type of program. They make it seem that way, and from the outside, it looks like you can, but you really shouldn't do that. Xero is the same thing. Wave is the same thing. And even spreadsheets -same thing. You're gonna have to take a little bit of time to figure it out, so you need to consider how much time you have that you're willing to invest in it?
The second thing to consider for your bookkeeping system is whether or not you have access to it right now? Can you download it right now? And not only can you download it right now, but do you have the computer capabilities needed? For example, if you want to use QuickBooks Desktop versus QuickBooks Online, do you have the equipment and financial means right now to pay for those monthly costs? QuickBooks Online is a monthly subscription - can your business sustain that right now?
The third and the most important of these three things to consider is whether you actually going to use it or if it is going to be one of those other subscriptions that you've signed up for and you never use. I talk about that a lot because I see it so often in businesses: when I onboard them and we start going through their books and they haven't looked at things forever, they're paying fees out the wazoo for subscriptions that they've never even opened.
So make sure that you're going to take time to learn whatever program you or system that you choose, make sure that you can afford that system and you can download it right now, and that you are going to commit to using it.
Reason #3: You're afraid of making mistakes.
Wow, have I heard this excuse or this reason that your books are not up to date! You're afraid of making mistakes and we've all been there. We all avoid things that we're afraid of. We're afraid of failure, so we just put it off. If I don't worry about it, out of sight out of mind, and bookkeeping is one of those things. Maybe it's because it's just intimidating, and business finances, business bookkeeping, can be extremely intimidating for those who don't like numbers. They don't like banking, they don't like the checks and balances of things. They're creative, and a lot of people on my client list are creatives, and their brain just doesn’t work in that way!
Or maybe, you're just you're afraid of the compliance side. So you're afraid that you're going to make some mistakes in your bookkeeping, that is going to roll into mistakes in your taxes, and you're going have Uncle Sam on your back. But, we all learn from those mistakes. We have to fall down and bruise our knees to get back up and figure things out better for next time.
So the truth in this is, that you're likely making more mistakes by waiting and rushing. For those of you who wait until the last minute to do your bookkeeping and bring it all together for taxes, you're only doing bookkeeping for compliance. You're likely making more mistakes than doing it monthly because now you're rushing, you're stressing, you're just trying to pull it all together. You're also very likely to miss out on so much in tax strategy. You're paying Uncle Sam way more than you should be and you're not able to use those numbers all year long to make more money. The magic is in the numbers. The strategy is in the numbers. The planning is in the numbers, but if you don't know your numbers, you're not going to be able to use them to help grow your business.
The Fix: Make a list of all the reasons why.
What are you really afraid of? Don't just say “Well, I'm scared. I'm gonna make a mistake.” What are you scared of? Are you scared of Uncle Sam? Are you scared of an audit? Or are you just worried that you just don't have a clue what you're doing? It may go back to systems, it may go back to lack of time.
Get it out. Send me a DM and tell me what you’re scared of or write it down and then I want you to reflect on those things. And then you need to make a decision. And the decision is going to be one of two things: Either tackle these fears by Googling and doing research, or asking a professional. Google doesn't always give you the correct answers.
So, I want to tell you a couple of things about what I can help you with. We offer monthly bookkeeping services for small to large businesses, and anywhere in between. We offer virtual CFO services as well, so if you're looking at getting your bookkeeping done and you want to outsource it.
We would jump on an introduction call, get to know each other, and make sure our personalities jam. We'll talk about your business, your systems, and what you are looking for in your bookkeeping. Then, we would do a diagnostic review of your books, if you have any books in QuickBooks right now. After that, I would let you know what I found in your books, what needs to be changed, and what we would do moving forward.
Every month, my team and I would do all of your bookkeeping for you, so you don't even have to go into QuickBooks if you don't want to. We would meet once a month, where we will actually go over your financials line by line. You'll also get a video from me every single month that will go over your finances. We'll go over the goals we’ve set in our original kickoff goal-setting meeting, and you will know where your business stands every month and what you need to do month-to-month to grow your business.
I've saved my clients thousands and thousands of dollars; they pay for their services with the money that they save in taxes or increased revenue. So, if this is you, go ahead and set up an intro call by clicking here.
If you’ve decided that you’re not ready to outsource, but need a system and QuickBooks and Xero are just really overwhelming; if you need something extremely streamlined that you can customize for your business that doesn't cost an arm and a leg, then you need to download my Calculated Tax Planner. This spreadsheet is completely customizable and has so many cool features. Best of all, it's less than the cost of one single month of QuickBooks, and you can use it all for this year and then you can copy it and use it again for the next year.
