Congratulations! You have added a valued advisor to your business team! Now what??
A relationship with a bookkeeper can be anywhere from a casual, regular meetup for coffee type relationship to an intense, live in, family member relationship to something somewhere in between.
No matter the extent of arrangement between you and your bookkeeper, there will be ground rules laid out for you to work with. These are designed to give you, the client, the best value & result for your business.
Unlike your engagement with your Tax Accountant which is usually for a short period each year, you will be collaborating with your bookkeeper more often, & more in-depth, throughout the year.
For clients who only require 4 quarterly BASes to be reviewed & lodged each year (client doing the weekly bookkeeping) - as a bare minimum you will need to provide bank & credit card statements covering the quarter. The sooner you can feed these to your bookkeeper, the sooner they can verify bank reconciliations, review & forward queries to you. Once queries are answered your quarterly BAS can be sent to you for signing, then lodged.
As the scope of service increases (monthly?, weekly?) the flow of information between client and bookkeeper also increases and the communication between you will intensify.
Your bookkeeper will outline to you what, how and when they require information and documents from you. This may include:
It is very important that clients keep to the schedule & routine set by their bookkeeper. Bookkeepers have worked hard to develop efficient client/bookie workflows with the aim of achieving timely reporting & lodgements. Delays in provision of documents, information or answers to queries have a knock on effect that then delays reporting & lodgements.
Your bookkeeper is a part of your business team! They bring their skills & experience to help you keep up to date with reporting obligations, have ready access to current business metrics, and help you to look forward & grow your business. They need you to play their game for you get to get the best out of your game!!
We all know that businesses are cyclical. The skill is knowing your business’s cycles, when it will be up and when it will be down and how to manage into the future. Some business owners are better at this than others. Too often a business will enjoy the rewards of an up cycle and then hit the down cycle with no plans in place. Suddenly payments from customers slow down. The simple equation is then … less money coming in, less money to pay suppliers. But should it be that way? Maybe a business extends its borrowings to keep up, or negotiate new terms with suppliers, or just not pay them at all until more money comes in.
A solid client/supplier relationship that may have been in place a long time can very quickly sour with non-payment. A business can suddenly find themselves without some corner stones (ie product and/or service suppliers) that make their business happen.
If you find your business in this position you need to look at what is happening. You know income has slowed down, but have your expenses? Some expenses will not shift very much if at all. But other expenses should fluctuate with the cycles. Business owners also fall into the trap of not compromising what they take out of the business. Is it realistic that your own ‘income’ remains at the same level when business is down? Is it realistic to expect your suppliers to become an impromptu line of credit?
Businesses that do not plan ahead for their cycles can quickly find themselves with additional credit that now needs to be serviced and poor (or non-existent) relationships with suppliers. This will effect your customer relationships and it also makes it so much harder to get back into an up cycle. It really takes the fun out of having your own business!
What can you do?
- Have a BAS Agent/Bookkeeper on your team
- Maintain good communications with your customers & suppliers
- Recognize your cycles and plan for them
- Know which expenses should fluctuate
- Keep your bookkeeping up to date at all times
Now is always the right time to review how your business is going today, tomorrow and into the future. Don’t put it off. You do not want to have to rob Peter to pay Paul! It is the beginning of the new financial year so sit down with your BAS Agent/Bookkeeper and schedule regular discussions and reviews of your business. Your goal should be not only to survive the ups and downs but also to strengthen your business in the coming year and avoid those downs.