YOU COULD BE MISSING OPPORTUNITIES

Making the right decisions for your business is wholly dependent on having the right information, whether big or small. Sometimes, that information takes time to curate because you have to update things in your “ledger” to make sure you know exactly where things stand.

While some delay in updating records is pretty common for business owners, the reality is, there are times you need to make quick decisions (both operationally and investment-wise).

If you don’t have the most updated bookkeeping that could mean missed opportunities, or even worse, lost money from making decisions based on incorrect information.

And that’s why I want to talk about real time bookkeeping services today – something that more and more businesses are taking advantage of (and you should too).

But first let me take a minute to wish all those in Florida my heartfelt condolences and encouragement as they face a long road ahead. Even with relief efforts (including the IRS’s extension of estimated payment and filing extension deadlines to February 15), it’s a lot to face.

And with times like these, it inevitably gets you thinking.

How can I guard my business from disaster?

There are fail safes you can put in place regarding your insurance and finances to help insulate you, should you be affected.

And while we’re at it, let’s talk about why real-time bookkeeping is equally good for your business…

Real-time Bookkeeping for Up-To-Date Decision Making
“It sounds extraordinary, but it's a fact that balance sheets can make fascinating reading.” - Mary Archer

Should you expand or contract your business? Hire or lay off? Which of your customers are the most profitable? What’s ahead for your taxes? Have you improved or lost ground over the past few years?

Your small business runs on you making the right decisions – and making the right decisions is even more effective when you can do it with speed.

Imagine if you had the income statement, balance sheet, and other information faster so you could in turn make key decisions faster. This is how keeping your books in real time (or something close to it) could help your business save time – and money.

Differences in record-keeping

It’s easy to confuse bookkeeping with accounting. Yes, the jobs of both bookkeepers and accountants can overlap, but the two tasks perform distinctly different jobs for your company.

Bookkeeping is the on-the-ground, in-the-trenches recording of your business’s transactions and the gathering of financials you need to keep your operation running. Bookkeeping usually involves recording transactions (sales, expenses, and so on), reconciling bank accounts, AR (Accounts Receivable) and AP (Accounts Payable), and helping prepare financial reports. Real-time bookkeeping does all that faster – in many cases, actually as it happens.

Accounting involves more analysis of records and financials that the bookkeeper has generated, checking for errors, and trying to gain and gauge strategic insights. (Given the interpretation and expertise required, accounting is likely to involve more senior experts.)

How can you tell if real-time bookkeeping would help you? One clue might be if you’ve found yourself not regularly looking at your company’s financial and performance reports. Other signs might be losing exact track of invoices because of out-of-date AR or not regularly reconciling accounts or missing small transactions. All this adds up, potentially to the point of making decisions based on financial info that is out of date – and all but useless. Faster information could help you make better business calls.

Real meaning of ‘real’ time

Real-time bookkeeping services relies on two cutting-edge business technologies: cloud computing and artificial intelligence (AI) to rapidly produce documents such as your income statement, balance sheet, sales reports, and so on. You should typically have the info in your hand no more than 72 hours after a transaction or event – often sooner. Ideally, AI automatically records transactions as they occur with no time drag and no chance for the information to get stale or forgotten. You then use the cloud to store your books on a remote server that you and your team can see, over the internet, whenever you want.

The speed and the access combine to help you make clearer and more far-sighted decisions more quickly. For example, you won’t have to wait until the end of the month to start an initiative and later have to walk back an initiative because negative numbers eventually appear – you’ll know going in what has the best chance to work.

Other advantages:

• Cost. Real-time bookkeeping services start in the low-to-mid three figures a month – a chunk of change, but still cheaper than hiring your own bookkeeper (not to mention the expense of even finding and interviewing someone successfully these days …). Automating repetitive tasks such as data entry, expenses management, and invoicing drastically reduces human labor.
• Accuracy. Of course, automation reduces human labor’s twin cousin: human error. It also creates an audit trail to backtrack the source of any errors.
• Tailoring. With direct deposit and debit links to your accounts, your books will more quickly reflect how your company is doing right now. This also makes it easier to put your financial picture in front of prospective lenders and investors.
• Taxes. Beyond just compliance, both bookkeeping and accounting can put you in a better situation to tax plan and project, including where you can save money throughout the year.

What to ask

Big names in real-time bookkeeping services include our favorite: QuickBooks® Online…plus, Bookkeeper 360, Bench, and many others. Questions to ask these providers include:

• What’s your experience in my industry?
• Will I have to learn a new software?
• What’s the full range of your features, and how much extra will I have to pay for them?
• Do you have other customers I could speak with?

This move toward real-time bookkeeping could save you time and money – both of which you can plow back into your business, where they’ll do much more good.

BE THE ROAR not the echo®

Janet Behm