All posts by David Maher

Importance of Bookkeeping

Bookkeeping, yuck! I have not found a business owner who enjoys the process of bookkeeping, unless they are bookkeepers, and some of them don’t really enjoy it. It is something all business owners and entreprenuers must do, or have done for them. They see it as an expense and of little value until tax time. I would like to help business owners and entreprenuers see this as an investment in thir business rather than a necessary administrative expense.

What is bookkeeping? Dictionary.com defines bookkeeping as the work or skill of keeping account books or systematic records of money transactions (distinguished from accounting). via Bookkeeping | Define Bookkeeping at Dictionary.com This is a good basic definition. Today, many bookkeepers and accounting applications take the information recorded through the bookkeeping process and presents it in reports that are beginning the “Accounting” process.

Why is this important? There are several reasons, but they all hinge on the need for accurate bookkeeping. Let’s look at some of these reasons.

  1. Business Planning
  2. Tax Reporting and Compliance
  3. Business Descision Making
  4. Cash Flow Management
  5. Building Business Value

The business functions mentioned above can have a dramatic effect on a business. Tax reporting and compliance can cost a business thousands of dollars if it is inaccurate or not taken care of in a timely manner. Cash flow management provides for a better cash flow, offsetting one of the main reasons businesses fail. Business planning sets the direction for the business and helps generate profits. Business decision making is enhanced with good bookkeeping and reporting to help make sure decisions are based on factual, accurate information. When all these are working together, the value of a business with good cash flow and profits, increasing, builds value for the business.

While the list isn’t comprehensive, these functions are part of a successful business model. I will expand on these functions in future posts to help you better see the value. 

Please feel free to comment below. I will appreciate your input.

 

My Story as an Entreprenuer

Let’s start with a story about a new business owner. It’s my story. Several years after I graduated from college with a Bachelors of Business Administration (BBA) degree with a specialty in Banking and Finance. I went to work for a savings and loan management training program when I graduated. I became a branch manager at the ripe old age of 21. After a couple of years, I changed jobs, I went to work with IBM in their small computer division. This is before the personal computer. Computer technology was advancing quickly and prices were coming down for much better technology. IBM was slow to deal with the changes in the marketplace and I decided to go back into banking. I joined a local commercial bank, as a Vice-President in lending. I setup a real estate lending department, I also handled commercial lending (business) clients and made individual installment loans as well. My dad bought a small sign manufacturing business several years after he retired because he wanted something to do with his time. After several years, he wanted help and I decided to join him. His strength was sales, mine was business finance and I was mechanically inclined. So here we were working together. He handled sales, mom was the receptionist, and I handled the accounting and production. We had several production employees.

Dad and I made a good team in many respects, we had different strengths and weaknesses, which helped round out the different hats business owners need to wear. After being in business together for several years, we began to have some conflict. Dad and I disagreed about several things relating to the business, eventually leading to me making an offer to buy him out, which he accepted, and I took over the company. 

Over the next several years, I learned a lot from the school of hard knocks. I did some things well, and I also made a lot of mistakes. As a business owner, you have to wear a lot of hats. You have to deal with sales, collections, banking, purchasing, paying bills, managing the business cash flow, human resources, payroll, production, and paying taxes to everyone.

A typical day started around 5:30 to 6:00 AM, reviewing what work needed to be completed that day, making sure we had everything needed for when the employees showed up. I would heve to make sure they all knew what needed to be done. After the work started, I was on the phone taking orders, making appointments to generate new business, then I would have the small emergencies that needed to be dealt with. I felt like a fire fighter a lot of the time. Fridays were always crazy days, invariably I would be busy doing something I thought was important, losing track of time, and then I would look up…sometime an hour or so before the end of the day, and I would have one or more employees standing at my office door wanting their pay checks. Writing payroll was always a hassle and time consuming. I usually worked 12 hour days, plus or minus a little, and many times, I would work on weekends to make up for the things I wasn’t able to complete during the week.

So why do I mention all this, to let you know you are not alone. I have experienced many of the issues that face a small business owner. I understand feeling overwhelmed, and I found that there are options to help…it’s called outsourcing. I hired a company to help with the bookkeeping so I could focus on other aspects of the business. that helped. I eventually brought on a partner, then ultimately sold out to him. 

I started my current business GG Technologies in 1999. Originally I started out in Dallas, TX providing computer hardware for small businesses and helped with networking. I found most of my clients really had 2 areas they really lacked expertise, accounting and technology. I started helping them with the accounting as well. I would help them clean up their accounting issues. Initially I worked with whatever accounting application they used, but over time, I decided to focus primarily on QuickBooks since the majority of my clients were using it or wanting to use it. I became cerified as a QuickBooks PorAdvisor in 2003. I also got certified in QuickBooks Point of Sale with version 2 in the same year. I have certified in everything QuickBooks offered since. I am currently an Advanced QuickBooks ProAdvisor, Advanced QuickBooks Online ProAdvisor, QuickBooks Enterprise ProAdvisor, and QuickBooks Point of Sale ProAdvisor. What does this mean for my clients, I know QuickBooks products and how to make them work. I can help them select the correct QuickBooks product for their business needs. I can help them setup QuickBooks, clean-up quickBooks when it is not providing good information. I can train clients to use QuickBooks properly. I also can provide bookkeeping services.