It may surprise (and even reassure) you to know I don’t use MYOB. I have other software, having seized a one-year-free deal without knowing what it meant.
I now pay for updates each year that cost more than the original program. Worse, I chose a version to handle five staff, who all had to go when my No. 1 client ditched me retrospectively. But that’s another story.
My data can’t fit into a lesser version, so I’m trapped. Worst of all, I don’t use the damn thing!
I hate bookkeeping and I hate Business Activity Statements. I hate them so much I used to think about going back to corporate life – and that’s saying something.
Then I read The E Myth by Michael E. Gerber. His Chapter 4, Adolescence: Getting Some Help, spoke of the joys of hiring a bookkeeper. So I did.
Suddenly, reams of receipts and hours of begging software for mercy were replaced by a prim, efficient gentlemen who visited quarterly for two years. I washed my hands of the whole filthy affair and concentrated with glee on my main game.
This worked fine, until Mr Prim* made a $10,000 error which didn’t come to light until too late. The feasting occasioned by my huge tax return (and all the delights it promised) was replaced by an icy, empty feeling very much like a broken heart.
Mr Prim and I have long since parted company.
The moral, of course, is that you can’t abandon whole tracts of your business without running big risks. You must keep at least a fingerhold of understanding and control in every area. If you can’t, you may not be cut out for this caper.
I see this, but I still hate bookkeeping and its software. Invitations to courses? Binned. Online tutorials? Unopened. It’s pathological!
So, this is a post in which I ask for your advice, opinions and stories. How do YOU handle the black art of bookkeeping?
Paul Hassing, Founder & Senior Writer, www.thefeistyempire.com
* Not his real name.
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Author
Megan from myBRC
March 10, 2009 at 9:58 am
Hi everyone and welcome to Small Business Owner!
Just a reminder if you’re commenting for the first time – your first comment will be sent to the administrator for approval – so you won’t see it straight away.
Once your first comment is approved, all your future comments (submitted using the same email address) will appear immediately.
Keep those comments coming, we love to hear your thoughts and feedback.
Author
Mike Williams
March 10, 2009 at 10:09 am
Paul
Congratulations on the blogging gig – I look forward to many a posts (and in particular the one on getting Twitter to work wonders for my business).
In relation to your bookkeeping I have several comments:
1. I do my own bookkeeping and will be ditching that soon (would have been sooner but failed to give myself my own consulting advice – until I read E Myth as well).
2. I strongly believe you can outsource/subcontract/employ others to do tasks for you. But there are two key requirements: no point outsourcing your core competency that you use to add value to your customers (else you are giving your business off to others); you MUST have measures in place when you do outsource – a point that E Myth also makes. Sure others will make mistakes (like your bookkeeper), but if you are not monitoring and measuring the outcomes you are just abdicating the task, not delegating it.
3. Despite people not understanding bookkeeping, most have a strong grasp of bank balances and profits. I suggest that anyone who lacks understanding in these areas (or doesn’t want to understand) shouldn’t be in business. For the rest of us, if you get others to do your bookkeeping make sure you continue to report and monitor not just what the business is doing(cash balance, monthly sales and monthly profits), but also the implications of what the bookkeeper is doing. Regularly ask critical questions like: “what is my GST and PAYG tax liability this quarter?”, “are my outstanding debtors getting worse?”, “what is my cash surplus looking like next month?”. These questions will often pick up potential mistakes because they will stand out like the proverbial nuts…
Would any of these questions picked up your $10,000 mistake Paul?
Author
Paul Hassing
March 10, 2009 at 10:18 am
Thank you for your very generous response, Mike. With quality like this, we can’t lose! Your penetrating questions would certainly have flagged my drama ahead of time. I now have spreadsheets to track my business finances daily. I’m still scared to venture too far into my software, but I agree that unless I get a grip, I am indeed ‘abdicating’. Thanks again!
Author
Megan from myBRC
March 10, 2009 at 12:08 pm
Hi Paul,
We take your point that bookkeeping isn’t really your thing, but we reckon we should point out that there are thousands of MYOB customers out there who find accounting software and/or their bookkeeper an absolute lifesaver.
We’d be really interested to hear the different experiences that people have had, either with software or a bookkeeper, or indeed any other creative way of keeping on top the black art of bookkeeping…maybe one day we’ll even convert you, Paul
Author
Paul Hassing
March 10, 2009 at 12:16 pm
Thanks, Megan. I totally admit that I’m (a BIG) part of the problem. If you or anyone else can make me part of the solution, I’ll be very grateful!
Author
Soozie
March 10, 2009 at 12:25 pm
Hi,
I can fully understand your situation. I am a bookkeeper who specializes in paper phobics!!!
My biggest triumps to date have been getting these clients to relax & stop stressing about the paper work, followed by them actually looking at the books to assess thier business. After all the books are done for the business first the tax office second!!!
Unfortunately there are a few charletons in the bookkeeping industry that do not have this view & covet the data files, one of my clients previous bookkeeper would not even do a P & L for the manager stating she was the bookkeeper & that there was plenty of money. these people have left a lasting impression on many.
The tricks to finding a suitable bookkeeper
1] Referals referals referals. Ask around
2] Interview them as you would an employee, background checks & all.
3] Find out if they are willing to work with your accountant [Not against].
4] Do they have an understanding that they are purely a number cruncher. Nothing less, nothing more.
if they want to be more than get an accounting degree.
5] find out if they are multi skilled eg are they an accounts recievable clerk, accounts payable clerk or a payroll clerk.
6] Find out what industries they have done books for, if they are familar with your business arena then the I don’t know questions will be dramatically reduced.
7] find out if they are competent with more that one program & if they know how to do books with a pen & paper. ie do they understand the mechanics of bookkeeping or just the program, this can save many a nightmare.
Bookkeepers are an intergral part of your business, but they are only one cog among many.
Have a great day!!!
Soozie.
Soozie’s Number Crunching.
P.S. It also helps if they have a sense of humour.
Author
Paul Hassing
March 10, 2009 at 1:25 pm
I’m knocked out by your comment, Soozie! Thanks so much for taking the time and care to table such useful info!
Author
Soozie
March 10, 2009 at 2:44 pm
Your welcome
Author
Mike Williams
March 10, 2009 at 10:37 pm
Bookkeepers with a sense of humour (said with with a wry smile on one’s face) – a rare breed indeed – and a valuable one!!! Great advice Soozie, its worth turning those points into a Do’s and Don’ts Bookkeepers Checklist.
Author
Paul Hassing
March 11, 2009 at 10:20 am
I fully agree, Mike. I’ll be stunned if the MYOB folk aren’t collating these industry gems as we speak!
Author
Jason
March 11, 2009 at 3:14 pm
Dear Paul,
My (unhelpful) answer to your question “How do YOU handle the black art of bookkeeping?” is:
Never make contact with the ATO!
Aside from some BAS catchups now and then (for which one may be fined for lateness) I reckon not doing the books at all works wonders!
Now – a question for you:
Can you put me in touch with Soozie please?!
Thanks,
Jason from Jeparit.
Author
Paul Hassing
March 11, 2009 at 5:27 pm
Sage advice, Jason! I searched for Soozie online, but to no avail. If you have a website, Soozie, and are keen for new clients, let us know!
Author
Soozie
March 13, 2009 at 2:02 am
Hi,
It’s Soozie. Thank you so much for the feed back on my comments, it’s kind of my soap box, born from the fact that I am usually the one fixing up other people messes & I have to deal with as Paul put it
“(and all the delights it promised) was replaced by an icy, empty feeling very much like a broken heart.”
Note for Jason, I always use the words quagmire or schmoozel with the ATO. You usually get a chuckle on the other end of the line & then you have a wonderfully helpful person. I think they are just so releived not to be getting abused &/or lied to. I have also heard from proffessional quarters that you are right about the not contacting them, if the system hasn’t flagged you it’s because effectively you do not exsist on their radar[yet]. The other alternative is get a really good accountant. They can be an absolute godsend & if they are proactive they will pick up all manner of things & before it is to late. From a bookkeepers point of view they are so much more than a godsend, they allow us to do our work properly & take the pressure off when we are asked questions that require a different skill set.
Note to Mike, I would love to see a do’s & don’ts bookkeepers checklist, although after reading some of Pauls’ work I would be embarressed to try as I was more than a little impressed. Do you think that if I asked him nicely [fluttered my eylashes, sickly sweet smile & syrupy voice]I would have a chance???
Note to Paul [fluttering my eylashes, sickly sweet smile & syrupy voice]PLEASEEEEEEEEEEEEE
If any one would like to contact me my email address is sooziedoozie@bigpond.com [Did I mention a sense of humour]
Have a great day!!!
Soozie
Author
Paul Hassing
March 13, 2009 at 6:52 am
Dear Soozie, your comments are so ace! You’re the one with the expert content on this topic. And if you tried, you might find you’re better at writing than you think. You may even have an e-book in you. Did someone say ‘passive income stream’?! Failing that, I’m sure I or someone in here will collate the salient points when the discussion is complete. There’s no way we’re going to let your precious wisdom fall through the cracks into some archive! Thanks again for your wonderful contribution!
Author
Paul Hassing
March 13, 2009 at 7:27 am
Soozie, I just sent the following ‘tweet’ to my 2,442 Twitter followers:
Need a good bookkeeper with a great sense of humour? Check Soozie’s comments in this debate: http://bit.ly/rBvja
I’ll be very interested to hear if you pick up some new clients as a result. For those readers interested in Twitter (and it seems there are many) this may be an excellent case study. Yesterday, a professional sportsperson in another country contacted me via Twitter on the strenth of my Flip Shelton muesli article. You never know where Twitter is going to lead you!
Author
Sonia Cuff
March 13, 2009 at 3:38 pm
I’m going to echo the comments on processes and reporting. I’m currently outsourcing my bookkeeping to Greymouse and will have the following in place:
1) A documented process for within my office on how the paper flow is handled (from supplier invoices, electronic PDF versions of bills through to the thermal paper ‘woolworths & petrol’ receipts. This is actually nothing more complicated than a couple of filing trays, an electronic folder and a scanner .. and what gets scanned, filed and sent and when.
2) Regular monthly reporting back to me to read through (like my profit & loss). I need to understand how much my regular expenses etc normally are, so I can review the appropriate report on a monthly basis to ensure there’s nothing out of the ordinary (or I can at least explain the reason for any hikes in expenses or income).
In today’s wonderful age of technology, bookkeeping no longer has to be done by someone visiting your office. If you know (or can learn) how to scan a photo, you can outsource your bookkeeping remotelyand save yourself time and money. As expressed before though, as the business owner it’s still your responsibility to keep an eye on the financial figures .. which doesnt necessarily mean you have to personally go into your MYOB software.
Author
Paul Hassing
March 13, 2009 at 3:42 pm
Thank you, Sonia! This advice just gets better and better! Megan, would you mind hotlinking the Greymouse URL for ease of access? (I like this bit; it’s like praying!)
Author
Megan from myBRC
March 13, 2009 at 4:36 pm
Done! Happy to help.
Author
Kelvin Davis
March 16, 2009 at 5:34 pm
I totally agree.
As a business mentor I watched businesses fail due to bookkeeping mistakes. Furthermore last year I checked with the ATO and discovered (To my horror) that over 40% of all BAS lodged contained errors. These are also the ones lodged by accountants. (Yes they can make mistakes as well, only human)
IMPORTANT:
• Accurate data entry and coding is the KEY
• YOU ARE RESPONSIBLE regardless of who does your accounts, tax or data entry
• Quality reports on your business will ensure your success or quick identification of cancerous activates.
• The rubbish you get out is not easily understood so you need to (or we) generate usable reports for your business.
• We need to have direct communication with your accountants to clarify and more important rectify past mistakes (And yes.. ! This is MOST of the time)
We started the bookkeeping service to save companies from falling into the same traps and save companies from falling into the traps like you experienced.
You must check out;
1. http://bookkeeping.greymouse.com.au
2. Sassu.com
3. Zero.com [Paul Hassing says: Please see Comment #38 below.]
Regards,
Kelvin
Author, and QUT Business Mentor (Creative Industries)
Author
marisa
March 16, 2009 at 5:47 pm
Hi Paul
got to this site and could not resist in making a comment.
Many years ago i used to have a firm doing our book keeping and a lot of mistakes were made. To the point that I decided to take back the book work and learn to use Quickbooks and do the job myself. Since then, I got a better understanding on what a Company needs and what are the monthly requirements to keep the business running. I helped creating the system for Greymouse so that we could assist businesses such as Sonia’s to do their book work. It is all about systems and making sure that the process is followed. Over the last 18 months we have mastered the systems and check list needed to be able to give the right reporting back to the client, so that while we enter the data in MYOB or other applications, the business owners can be out there getting more business knowing that they will see their P&L and BS on a weekly or monthly basis.
Author
Paul Hassing
March 16, 2009 at 6:13 pm
Many thanks for your insight (and scary statistic!) Kelvin. Could you please resubmit your links 2 and 3? They don’t seem quite right and I don’t want anyone to miss your recommendations.
Author
Paul Hassing
March 16, 2009 at 6:18 pm
Hi Marisa; I’m glad you couldn’t resist! You’ve done what I wish I could. Sounds like your initiative is turning into quite a hit. I’ve visited Greymouse and left a comment. I hope this forum helps others find you.
Author
marisa
March 17, 2009 at 9:36 am
Thanks Paul. Got your comments too. Much appreciated. Keep in touch and to everyone else in business, I am looking forward to be able to assist further.
Author
Matthew Addison
March 17, 2009 at 12:27 pm
Greetings,
Professional (read “GOOD”) Bookkeeping is a skill, a talent, sometimes a conundrum.
Many many businesses do their own bookkeeping based on little training, little experience and even less guidance. Many “contract” bookkeepers began ’cause they found some ability in themselves to make sense of their own books, or maybe their employers books, and hence became a “bookkeeper”.
The bookkeeper industry is full of these accidental bookkeepers. The term “Accidental Bookkeeper” is not meant to be a derogatory term ’cause for an increasing number of accidental bookkeepers the ability to develop and progress knowledge, skill and better bookkeeping practice is now more feasible and obtainable than ever before.
Anybody can be a bookkeeper but not every bookkeeper is professional: When looking for bookkeeping assistance check out:
1) Who does the person refer to when something is too hard?
2) How does the person keep up to date and switched on with BEST bookkeeping practices and state of the art time saving effiicent processes?
3) Where did the persons software competence come from? Can they prove it?
4) If a contract bookkeeper – do they have professional indemnity insurance?
Being a professional bookkeeper is more than turning on the computer and punching numbers into software – it is knowing what you know and knowing what you dont know and knowing who to ask the questions so that you can then know!
The Institute of Certified Bookkeepers is all about helping people who do bookkeeping, be professional bookkeepers.
I found the heading “The black art of bookkeeping” an interesting title:
- an “art” yes, although thinking too creatively is stil frowned on in some circles.
- a “black art” if it is meant to be clouded in mystery and unknowing then we truly have missed the point.
Check us out http://www.icb.org.au – a professional association of bookkeepers for bookkeepers
Author
Megan from myBRC
March 17, 2009 at 12:34 pm
Just to add to this great advice, AAT (Association of Accounting Technicians) published an article on myBRC about What to look for in a bookkeeper – another perspective for those considering engaging a bookkeeper.
Author
Paul Hassing
March 17, 2009 at 12:37 pm
I’m thrilled we’ve garnered your expert, industry input Matthew; thank you! Some of my blog posts play on my errors and ignorance; it’s OK to make fun of myself. This ‘art’ is ‘black’ for me, because I’ve failed to grasp the nettle. With comments of your calibre, however, I won’t be in the dark for long!
Author
Linda
March 19, 2009 at 5:47 pm
Account balancing is so awful to me that I quit my accounting course at Uni. The comments are very informative, I appreciate all the time and effort here.
MYOB BLECH.
I prefer spreadsheets and my husband.
But without my husband, I would call my Ex’s mother. I don’t think sh EVER made a mistake.
I really should go take a basic course again.
Author
Paul Hassing
March 20, 2009 at 9:00 am
Great comment, Linda! I did one of the first HR degrees in Australia. The course designers included Real Accounting insteady of Stupie Accounting. 17 out of 18 students failed that unit! So I feel your pain. And appreciate your feedback.
Author
MYOB Certified Consultant
April 9, 2009 at 8:48 pm
once you are locked into one it is an upheaval to move, yet a lot do it.
Author
Paul Hassing
April 14, 2009 at 9:36 am
That’s good to know, Heather. I just had to fork out another $375 last week. That’s almost as much as MS Office 2007! I am seriously going to look into migrating my data to a smaller or different software package in the coming year. This annual, four-pint blood letting drives me crazy! Thanks a lot for stopping by.
Author
Zoe Freeman
April 29, 2009 at 9:57 am
Hi Paul,
I was the same, and had the same problems with outsourcing, though not to the same amount. I then discovered web based accounting. http://www.saasu.com meant I kinda fell in love with bookkeeping as it made it so much easier.
I’ve since had to have it wrenched off me so I can get on with managing a growing business, but the web based aspect means my bookkeeper, my accountant and my staff are all working on the same file at the same time, so there’s transparency and I can go in and check things out to make sure it’s all kosher.
I now spend the time I used to spend bookkeeping in generating reports and learning more from my accountant about projections and budgets.
Plus my bookkeeper is a trusted friend and qualified accountant so I’m pretty lucky in that regard
Author
Paul Hassing
April 29, 2009 at 10:03 am
Dear Zoe, I’ve never heard of such a thing! I now realise that the Saasu link provided earlier was mispelt. I will check this out with interest. Many thanks for your visit and comment!
Author
Kevin V Russell
May 2, 2009 at 9:22 am
Whenver a client comes to me and says they are not happy with their current software and they would like to move I try to get them to be as specific as possible. Both of the major software programs have very definite strengths and weaknesses and work better for some industires than for others. They also have far better support networks so that it is easier (and cheaper) to get the right advice. Changing from one accounting system to another can be a HUGE headaache so unless the payoff is significant or unless the business has simply outgrown the current offering, there may be other alternatives worth considering. There are add on solutions that can help to collect, analyse and present the information in new ways. A good bookkeeper / consultant will be across a lot of these as they may have had exposure to many of them. Not that I have anything against accountants but they are not the last word on accounting software. Some of them have only ever been exposed to one software suite and may not be able to provide the ongoing support for management reporting, budgets and the like.
Author
Paul Hassing
May 2, 2009 at 1:36 pm
Thank you Kevin. Comments like yours are a wonderful eye opener. I can’t see what you do, though, as there’s no URL behind your name. Please feel free to link to your site if you wish. Others have reported good new visitors from doing so.
Author
Paul Hassing
July 7, 2009 at 1:58 pm
LATEST RANT: I’ve had a murderous morning trying to help my bookkeeper update my accounting software. After accidentally sending me two copies instead of one, the supplier is now saying I can’t have one copy on my two home/business PCs. Worse, though I fork out nearly $400 per annum for the privilege of using their software, their help line was ENGAGED when I rang multiple times to untangle the missing installation/activation/validation/eternaldamnation code situation. Arrrrgggghhh!!!
Author
Megan from myBRC
July 7, 2009 at 2:08 pm
Ah Paul, couldn’t resist the opportunity to say…that’s what you get for not using MYOB
Author
Paul Hassing
July 7, 2009 at 3:41 pm
Fair call, Megan! I was sorely tempted to cross over to you today. But I must preserve my journalistic objectivity – even at the expense of my health and sanity. Thanks for sticking the boot in when I was down…
Author
Stephen Hamilton
January 11, 2010 at 5:20 pm
Just a note: I suspect when Kelvin linked to zero.com above, he probably meant xero
Author
Paul Hassing
January 11, 2010 at 5:23 pm
You’re a good man to have in one’s corner, Stephen. Many thanks for your eagle eye!
Author
Pam L
February 20, 2010 at 10:34 am
Hi Paul
I work in the industry and recruit as well. Screening of your bookkeeper is everything. They need to be professionally accredited and come with references. I personally wouldn’t accept any reference other than from an accountant who had a long association with the bookkeeper.
And on the other hand I find giving the business owner education as part of the service (basically accounting for non accounts – in simple terms and lots of analogies) has been a big winner. Although bookkeeping may not be the reason they went into business, they are still responsible for what is happening in their business. The business owner education approach as part of the client service which allows them to be able to self-sufficient in the audit process after the work has been done and before it is submitted!
Author
Paul Hassing
February 21, 2010 at 10:32 am
Great to hear from you, Pam. I appreciate your perspective which, having read a great deal on this topic since posting, I’m now better qualified to appreciate. Best regards indeed. P.
Author
buhalterine apskaita
May 28, 2013 at 9:45 pm
I started to do bookkeeping and I just can say that I hate it too