The Accounting Industry is Critically Understaffed
Since 2020, the accounting industry has seen hundreds of thousands of qualified bookkeepers, tax preparers, and accountants retire, quit, or change industries. Worse still, graduates from college and university accounting programs have decreased by 16-18% each year, which is not backfilling those positions.
The 2022 Canadian Census shows that small businesses outnumber accounting professions by 500 to 1. So, if you’ve tried to find a bookkeeper, tax preparer, or accountant and struggled to do so, this is primarily why. There are not enough of us to meet the demand for our services.
The tables have subsequently turned. Small business owners are no longer hiring accounting professionals. Instead, small business owners are applying to see if an accounting professional will take them on as clients!
Now more than ever, it’s critical for small businesses (<1 million in annual revenue) to learn how to efficiently and accurately manage their business banking transactions and record-keeping in-house.
The bonuses to learning to manage your books include:
- Saving thousands of dollars per year compared to paying for outsourced bookkeeping.
- The competence and confidence in understanding your financial numbers will allow you to use that data to make informed business decisions.
- In-house processing means the books are updated more frequently, making data as close to real-time as possible.
- You might not believe me at first, but I can explain why managing your bookkeeping in-house can actually save you time as compared to outsourcing the work to a bookkeeper.
What Each of Us Should Expect When We Consider Working Together
Communication is key!
A bookkeeper is an administrative expert, a cheerleader, a guide, a business coach (to varying degrees), a member of your support team, a software integrator, a third-party teammate, your devil’s advocate, and a liason between your business and the Canada Revenue Agency’s financial policies that you must operate within.
A bookkeeper is NOT a mind reader. Every one of those “hats” worn by a bookkeeper requires constant communication with the business owner and/or the business’s employees.
Both the bookkeeper and business owner must be able to read and respond to complex emails in a timely fashion. Asking questions before making decisions is crucial. Without frequent, detailed, and timely communication, the relationship between a bookkeeper and a business owner will inevitably break down. Try not to think of our emails as managing your inbox. Instead, consider it as passing notes in class, but you’ll never get in trouble! LOL!
Endeavour to follow the straight and narrow path
I’m not your mother. It’s not my job to be your conscience or place any judgment on your business decisions. As a bookkeeper, however, it IS my job to keep you on the straight and narrow path, for your own good. Ideal clients will embrace this!
For example, if you didn’t keep a mileage log this year, you can’t calculate the percentage of business use for your personal vehicle. Similarly, if you’ve lost your receipt for your monthly business lunch at the local eatery, you unfortunately can’t claim those business expenses as meals/entertainment.
The bookkeeper’s job is to help you audit-proof your business books and make the process as efficient as possible.
Know there are no shortcuts, however, solid knowledge saves time and money
Running a business is an inordinate amount of work governed by a complex set of rules. These rules have been implemented so everyone can operate their businesses on a level playing field. There are no shortcuts. However, there are some modern tools that can streamline our processes and subsequently reduce the effort it takes to maintain a good result. Let’s streamline and simplify your administrative processes!
Weigh your options between technology and time
I know you would love to hand me a shoebox of receipts to be sorted every month and subsequently put them out of your mind. Decades ago when bookkeeping was done on paper, that would have been the only way to proceed.
Thanks to modern technology (smartphones, scanners, etc.), there are ways to preserve the receipt images that might otherwise fade from the heat-treated paper they’re typically printed on. Digitizing source documents and backing them up to a hard drive or cloud storage does all but guarantee their existence in the event of an audit. This is undoubtedly the best practice.
However, at the risk of ruffling my colleague’s feathers, I’m convinced that scanning receipts into document management software is a make-work project that small business owners simply do not have the time to keep up with reliably, unless they have hired an administrative assistant or office manager. It’s the number one reason that the bookkeeping falls behind!
With the bank feed connections in Quickbooks Online (QBO) you can spare yourself the time and aggravation of scanning receipts by simply learning how to post and/or categorize your transactions right within QBO.
If we get a chance to meet, we’ll talk more about the risk versus reward debate over “to scan or not to scan” your source documents, but for now, it’s sufficient to say, there are options.
Solid bookkeeping is a powerful tool for business growth and development
We often think of business bookkeeping as a chore mandated to keep the tax man happy, and certainly, to some extent, you might be right. Bookkeeping is not a customer-facing or revenue-generating activity. In fact, it always costs time and/or money.
However, if you have any interest in growing or developing your business you will need the comprehensive real-time data that only in-house bookkeeping can provide, to help you make the strategic financial decisions that will help your business develop.
Not surprisingly, your future investors, bank or credit union, grant programs, and/or small business centres will want to evaluate that information. As a result, producing accurate reporting for your business is crucial.
Do your books tell an accurate version of your business story?
For better or worse, your business books tell a very compelling story. Consequently, it’s up to you to make sure that each chapter moves the plot forward and keeps the reader (aka: investors, grantors, banks, etc.) engaged with the story. Ideally, we want you to have a best seller!
Drop me a line and let’s see how I can support you while you write your business’s financial story.
The fine print:
The information and opinions expressed by Lori K Aitken on this blog are based on her own personal experiences. Please consult your own legal and accounting professionals for specifics regarding how any of the topics covered here may apply to your business’s unique structure, needs, or operational policies and procedures.
