No longer just an accountant but your FINANCE FUNCTION
Wednesday, July 17th, 2019 in: Advice
The world of business, bookkeeping, accounting and technology has changed dramatically in the last few years. The rate of change is set to carry on at an even faster rate. This may scare many new and small business owners but it’s also a MASSIVE OPPORTUNITY.
Bookkeeping has traditionally been seen as something you need to do, in our business we refer to it as ‘compliance’. I always say to clients that there are two different types of bookkeeping. Bookkeeping you NEED TO DO and bookkeeping YOU WANT TO DO. Let me explain the difference below…
Bookkeeping you have to do
This is purely for the reason to submit something to an external body. This tends to be HMRC or companies house. The driver for most people to submit their accounts for example is that they need to be submitted to one or both of these bodies. Let me talk about the Pain & Pleasure mentality of humans also. We generally do more to AVOID PAIN (needs) than we do to GAIN SOMETHING (wants). This means that keeping on top of your bookkeeping and your accounts etc is a priority so that the grim reaper, cough the taxman does not come banging down your door. It’s not fun, sexy or exciting but it avoids the pain of getting in trouble. This has been the main reason small businesses use an accountant, we avoid the pain for you!
Bookkeeping you want to do
This is where things get really interesting, basically anything goes with this. Most small business owners tend to focus on avoiding pain and therefore have no time, money, focus or resources for things that they actually want to do, things that move their business and life forward. We don’t go through business or our lives for that matter to just get by or avoid some form of pain. If this was the case we wouldn’t leave our houses unless we had too!
The tech is now there to have real time data and books up to date. Rather than looking at something that is 3 months or even a year behind which has no real meaning to you now. If you have up to date figures at the bear minimum you can use this information to make decisions about your business. I am not just talking about knowing what your tax bill is, I mean really nitty gritty level details. For example, how much did an average customer pay you last month compared to the prior 6 months, has it gone up. If it’s gone down, why? How many enquiries do you get per month, what is the rate of your ‘conversions’? Where do they come from? How much time have you spent in key areas that drive the business forward last month compared to the month before? I could go on all night…
The key to all of this, is not just to track things for the sake of it, but to move you forwards towards your business and life goals. Every metric, bit of data etc needs to be useful and relevant for you to actually make a decision or improve something in your business. What you can measure, you can manage. I challenge you to change your mentality to focusing on how you can achieve your goals, what got you where you are is not going to get you where you want to be. If you just do the same thing time and time again, you get THE SAME RESULTS.
The picture below gives you an idea of the different levels of bookkeeping. To find out more on how we can help you make this transformation in your business you can visit our outsourcing page.