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Outsourcing is all the rage these days. From gigantic corporations all the way down to the solo entrepreneur, it seems like everyone is doing it. If you aren’t doing it, you’re being left behind.
And it’s really true, there’s no way you can build your business doing everything all by yourself. That’s what everyone says.
But you know what really sucks?
When you don’t have the cash flow to outsource.
And what sucks even worse: getting ripped off because you don’t understand what you’re outsourcing. And that could happen to anyone. Just ask Danielle Steele about accounting.
Seriously, there’s no excuse for this. The basic principles of accounting are not difficult to learn, you only need to learn them once, and with a basic bit of bookkeeping experience, irregularities are not difficult to spot on a general ledger.
Wait. Let’s back up a second… “accounting irregularities.”
What does that really mean?
Fundamentally, what it means is this: when you record all the entries in your ledger, there is an easy flow to the numbers. A pattern. A back and forth of debits and credits. An irregularity is just that, a series of entries that looks weird. If you have ever had trouble getting some accounts to balance out correctly, and had to get “a little fancy,” you probably created an irregularity. Go check it and see.
While you’re at it, check to see that your bookkeeper is on the ball. That’s called “due diligence,” and Miss Danielle didn’t do none.
You do know how to keep small business book, don’t you?
Small business book is not that hard:
- Create a chart of accounts. (this IS your business structure)
- Track your time and record against appropriate expense.
- Record outsourcing and cost of business expenses.
- Record revenue.
- Keep books balanced.
If you use software such as Quickbooks, the software will keep your books in balance automatically, which is pretty cool.
Simple, right?
Ok, yeah, the devil in the details.
My main tools are Quickbooks, Clicktime and spreadsheets. Right now, I’m in the middle of revamping my entire bookkeeping process (for outsourcing of course). Fortunately, once you get this stuff handled the first time, it averages out to a few minutes per day. Doesn’t take long at all.
Want more details? Details such as exactly how to break out blogging expenses?
Tell me in the comments.
Hey, Dave!
Excellent way to simplify the accounting process. This is all most of us really need to know. :-)
If my memory is correct, in a previous post you mentioned clocking your time whenever you’re working on a project, using some kind of timing software. Is that what Clicktime is? Or is there something else you use?
Looks like I’m going to need this pretty soon. :-)
Hugs and butterflies,
~T~
I’ve used http://clicktime.com for years, since 1996 in fact. Their affiliate program is too difficult to deal with for me, but I recommend them anyway, without any other reservation. Great customer service and they have been in business since 1999 (iirc). Someone over there will probably send me an email; wouldn’t be surprised if they dropped a comment.
This one of those cases where you have to spend a little money to make money.
Dave Doolin´s last post ..6 Figure Outsourcing
Hi Dave,
I agree that we all must use due diligence when it comes our assets, particularly our money. No one cares about your money as much as you do.
But, Danielle Steele isn’t the first person nor will she be the last person who was taken advantage of by a swindler. It could have happened to anyone as criminals know more ways of getting your money than we are aware of.
I think it’s a shame that someone she trusted stole from her (particularly a long-term employee) , but it’s a valuable lesson to the rest of us to monitor those people we trust with not only our money but other assets as well. There is nothing wrong with hiring people with specific expertise that you do not have, but we definitely do need to be aware of our own finances.
Thanks for sharing the tips,
Karen
Karen´s last post ..Increase Your Negotiation Skills- Is Win-Win The Best Tactic
Heh… yep, definitely. Anyone swindling my books is going to 1. get fired, and 2. get charged. That’s one way I won’t be ripped off.
Dave Doolin´s last post ..Get ahead with Headway theme for WordPress
You will have been off or there wouldn’t be anything to find. You will get even!
ripped off not off. Why can’t the comment say what I am thinking and not what I type?
Ralph´s last post ..Coots Lesson #6: Never Underestimate Sarcasm
Excellent example of needing to know ‘just enough’ before outsourcing. And yes, knowing exactly how to break out blogging expenses would be a huge value. I also know some folks have gotten in tax trouble by not keeping track of how they pay affiliates, so knowing the easiest way to prevent stepping into that pit would be helpful too.
Jean Sarauer´s last post ..How to Turn Life’s Lemons Into Blog Post Lemonade
Jean, since I’m not a CPA, I won’t give advice on what anyone should or should not do. But I can and will show what I do, and detail some of the pitfalls I’ve found.
The hardest thing I’ve found is figuring out how to charge my time. Some of what I write is clearly “content marketing,” some of it is clearly content production. So there isn’t a single account for charging blog posts in to; it’s not quite that easy. Sometimes, deciding which is which can be difficult. For example, this article would be more marketing. Tuesday’s article, production.
Dave Doolin´s last post ..Want to Write Better Here’s how…
I have hated accounting since my MBA days. They lost me when I learned that cash was a debit. Then I had to deal with accountants who make up numbers (they call them accruals). I believe in cash in hand. Everything else is crap. That being said, you have to keep to the government standards (GASB andd FASB) It is a minefield I hope I have the income that will force me in. I know a smart Quickbook expert when I do.
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Ralph, I don’t mind accrual, but I have to admit, wrapping my head around debits and credits was a bit difficult at first. I had to do it for a while, reading it made no sense.
So, yeah, I know a little GAAP, and I also know a little DCAA. And lemme tell you, that’s a P.I.T.A.
Dave Doolin´s last post ..CommentLuv Sales Page Linking- Yes or no- what do you think
I use Quickbooks also. You can also do the same thing by using basic spreadsheets. I export data from Paypal and my online banking accounts. That data is ready for a spreadsheet. All you have to do then is categorize everything.
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I loathe quickbooks. But I haven’t found anything better!
Dave Doolin´s last post ..CommentLuv Sales Page Linking- Yes or no- what do you think
For bookkeeping I am using Excel like spreadsheet with formulas. One sheet where I record transactions (date, sum, debit, credit, name of partner, document name and number). Then second sheet where all data are summed. And formula is like this – =SUMIF(Sheet1!G5:G722;2310;hr!F5:F722) This means if in Sheet1, in column G (from line 5 till line 7) is mentioned account number 2310, then must sum corresponding sum in column F. In column F I write sum from invoice, bank report, cash receipt. Such system is very useful for me.
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