How understanding these roles turned me from always needing to borrow more capital, to having the cash I need, when I need it.

When it comes to managing the finances of our businesses, regardless of the size of our operation the role of the bookkeeper, accountant and CFO are paramount to our success.

I have always had a bookkeeper and a trusted accountant.  I am reluctantly growing into a CFO.

Understanding how a bookkeeper can help me, and then empowering this person to work with me has created an incredible sense of ease and flow, especially in the last 2 years when my personal and business life has been anything BUT easy and full of flow ( can we say cancer and covid one more time)?

Since starting Purple Co, I have ensured that I was always ATO compliant.  I have a fear of getting into trouble, and the idea that the ATO might ‘get me’ was terrifying. Ensuring that I am compliant and financially responsible in my business was where I started.

My Accountant helps me to understand the numbers in my business from the bigger picture. For example, what have we done in the past, and what can we anticipate might occur in the future?

Some of the tasks specific to my accountant include:

• managing my taxation and ensuring that all my records are accurate and completed in the required timeframes.
• manages my yearly ASIC requirements
• reviews my financial data and advises me of risk

My bookkeeper enables my accountant to do their piece of work.

My bookkeeper manages my week-to-week operations (I manage my cash flow weekly).  My bookkeeper in keeping all my records up to date, empowers me to be able to take a more strategic view about planning for expenditures or down times.

For example, October is an important month for me, as I need to increase revenue so that I can get through January and February.  December and January are historically slow months for me. I need to plan for February in October.  I can’t do this if:

• My data is not up to date
• My records are inaccurate
• I have a lot of aged debt

In knowing what my numbers were, I have recently been able to confidently engage with a coach knowing that I have the financial resources to work with this person, so that stops being a distraction from our work together.

I have churned through a lot of bookkeepers in 12 years (9 of them!!!).  I have had quite specific things I want a bookkeeper to do for me, and what I have found is that not all bookkeepers are the same.

Many have their own ways of doing things, and that’s all they want to do.

It also took me a long time to understand that I was asking for a bookkeeper but wanted a CFO. I notice that many health professionals are wanting the same thing.    They are not the same thing.  AND I am the CFO in my business (currently) it’s a role I have had to grow into.

Here are the common tasks that I have a bookkeeper working on for me

1. Reconciling – matching what you spend with invoices and receipts. And conversely matching what income was received with invoices or other payments received notifications.

This helps me know my GST obligations, helps me know my cash flow, and helps me stay compliant with the ATO. We use Xero, and Hubdoc to help us with this, and because of things and stuff, my bookkeeper will also need access to my EHR (Insight), because the integration between it and Xero is not always reliable.

2. Creating a chart of accounts and using it – ensuring that when they are reconciling, they are entering each item into the correct chart in your chart of accounts so that you know

• Where income came from
• What you are spending money on

Getting your chart of accounts established will require discussion with you. You need to be able to make sense of the data that is being provided to you. Your accountant or your bookkeeper might give you a standard or a template to start with, but YOU need to learn how to read this data.

3. Advice on how much GST you need to put aside each week, month, or period of time.

4. Report on outstanding payments, that are either owed to you or that you haven’t paid.

5. Follow up on outstanding payments owed to you (known as aged debtors). However, I have found this to be really hit-and-miss, most bookkeepers I have employed have requested that they do this via email only. I’ve worked with many of them to build scripts. In the end, I trained someone in-house to do this. To me, chasing up money owed is a part of my customer experience.

6. If they are BAS registered, they can prepare and submit your BAS return with you each quarter.

7. They can provide you with a Profit and Loss (P&L) statement – I strongly recommend you learn how to read one of these, then points 1 & 2 will make so much more sense to you.

8. Maintaining all my accounts filing. I task my bookkeeper with the responsibility of saving and  filing all the data we would need should the ATO ever come knocking (we use Xero and Hubdoc for this).

9. Preparing payments – I have my bookkeeper prepare the payments that need to be made, then I can go into Xero and approve them.

10. Create pay slips, and maintain leave records – this can all be done within Xero. I have found that employee records are best set up by an accountant and then maintained by a bookkeeper.

When wanting to engage a bookkeeper I am all about finding someone who I can build a relationship with.  Having clear tasks, responsibilities, and communication expectations has enabled me to build this part of my business operations with grace and ease.

I assume that bookkeepers are competent, the missing pieces for me in the past have been:

• Do they want to work WITH me, or only do things their way?
• Are they willing to inform, teach and mentor me while I am learning how to be CFO?
• Are they reliable, and acting with integrity – because if they can’t do this I cannot trust that my records will be compliant, and that will stress me out.

 

I’ve written this in response to a specific request and I trust you find it useful.  Please note that this blog does not replace financial advice.  I am not a financial advisor. I am not an accountant. I am not a bookkeeper.

I am writing from my own personal experience of over 12 years as a health professional who has her own business.

Learning the money management aspect of running a successful business isn’t always easy.  As health professionals we didn’t go to health professional university to learn how to be a CFO – please grant yourself some grace and compassion and accept that money management and sound corporate governance is something you can learn.

However, I will say, that if you don’t know what you need your business to do for you, then no amount of bookkeeping or accounting expertise is going to help you.  You need to be clear about the vision you have for your business and then know what you need your business to do for you.

Then you can engage with, and empower yourself, your accountant, and your bookkeeper and I can assure you, the sense of cash flowing in your business will become easier.

What has one of your biggest learnings been about working with a bookkeeper?  I’d love for you to share your comments below, maybe there is something that you have used a bookkeeper to do for you that would help someone else to know.

Go be your awesome self

Jo

P.S. Money management is a huge issue; however, it all starts with you. Learning about what you need your business to do for you is VITAL to how you need your cash to flow and your accounts to be maintained. If you would like some help working out what you need your business to do for you, then please schedule a time for a FREE conversation with me here, to see how I can help.