Why Every Business Owner Should Know Basic Bookkeeping
I talk a lot on this blog about leaning into your strengths and hiring talented people to fill in the gaps. And I mean every word of it. Say for instance you’re a hairstylist. You’ve honed your talent and built a clientele based upon your commitment to customer service. And since those are your talents you’ve outsourced all the busy work to other people. Bravo! However, something happens and your salon manager who was also your bookkeeper has to move to Alaska tomorrow and you’re left with a bunch of numbers and spreadsheets you don’t understand. Of course, this is a dramatic example, but crazier things have happened.
Knowing the basics of bookkeeping is essential for any business owner who wants to stay on top of their company’s financial future. Whether you’re a data wiz or financial amateur, here are some reasons you want to know as much as possible about your own books.
1. Vision Casting
It’s really difficult to set a clear and appropriate vision for your company if you don’t know how much money you have. The problem with shutting yourself off from the details of your business’ finances is that you can’t clearly understand what it will take to progress to the next level.
2. Self Protection
Putting one single person at the helm of your company’s financial future is dangerous in a million different ways. First, and most people don’t like to imagine this, people are flawed. And whether you’ve tasked your neighbor or your childhood babysitter with bookkeeping, if you don’t have your eye on what’s money is going where it may have a tendency to walk off. Of course, no one wants to think about the people in their lives being dishonest. But flat out stealing is not the only risk you stand. I heard once that your business should be able to stand the bus test, meaning if your bookkeeper gets hit by a bus the whole thing won’t fall into financial ruin.
3. Building Confidence
Lack of knowledge and experience holds too many passionate people back from pursuing their business dreams! When you can confidently hold conversations and ask questions about your business’ financial health you’ll gain tons of confidence in yourself as a leader. If building confidence is your goal, we offer a very popular Quickbooks Online setup and training that empowers business owners to manage their own finances with the assurance that they’re doing it correctly.
Whether or not you have a bookkeeper, today is the day you can start educating yourself in the basic bookkeeping skills that help you understand your company’s finances. There’s no excuse to be under-informed. If someone else is managing your books, sit down with that person and ask them to walk you through every step of the process. If you’re in charge of your own books, you may consider hiring a bookkeeping service to keep you on track. Contact me today to learn more about our bookkeeping services.