Accurate bookkeepers understand the bookkeeping cycle and how bookkeeping works. They know how taxes and deadlines can make or break a business and the impact of paying extra tax on it. Real bookkeepers are not data-entry clerks.
In part one of our satirical look at how to pay more for bookkeeping services, we looked at the danger of not giving your bookkeeper adequate and complete information. You can read this blog post by clicking this link.
In part two, of our blog post, we looked at how to leave everything to the last minute and how this ultimately costs you more. Part three examined how to use your business as your piggy bank. You can read that blog post here.
This is all satire, of course.
Now here’s part four of our series on ‘How to pay more for bookkeeping services.’
4 – Make Things Unnecessarily Complicated
Every time a new currency, customer, payment gateway, bank account, credit card, product line or employee gets added to your business, it takes more work to keep things organized and get the bookkeeping done correctly.
This applies to pretty much every business change you make. When building and scaling a business, less is often more.
Speak with your financial team about your operational processes. Make considered decisions and don’t react emotionally. If you’re choosing e-commerce platforms or payment gateways, look at what’s proven to provide quality results.
Ensure the company is accountable and can provide the reports you, your bookkeeper, accountant, and CRA will need. Even reputable companies release new products that aren’t ready for market.
For instance, a well-known credit card company still can’t provide credit card statements (which must be issued within 21 days of the billing period)! Ensure you’re going in with your eyes open and not creating a future headache for yourself. Don’t give into high-pressure tactics. The small savings you might be able to generate in the short term will often cost you later.
When KATA Accounting started, we had “Shiny-App Syndrome,” and before we knew it, we were using far more apps than needed. Although apps can make life easier, there is an overhead cost associated with each one, along with an actual price.
Each app needs to be integrated and managed. You and your team need to learn how to use them. Also, you have to pay for the apps. This all hits the bottom line, and the overhead cost can be challenging to measure.
Another mistake we made was trying to do too many things. Learn how to say “No.”
Since the early days of KATA, we’ve narrowed our focus. We realized that saying “Yes” to everything was a major mistake. Not only did it mean a lot of time learning, creating processes and incurring unbillable labour costs, but it left a few clients feeling underserved – and they weren’t wrong.
Since we’ve narrowed our service offerings, our clients are happier, our team is less stressed, and we’ve grown at a faster rate.
We also had a USD credit card and USD bank account for a spell. Until we did the cost-benefit analysis of the premium banks charge on exchange, we realized we’d need over $200,000 USD in sales to make the fees worthwhile.
If a customer really wants to buy, or if a vendor really wants to get paid, they’ll usually accept your home currency.
Finally, with the advent of business-based shows on television, entrepreneurs are often creating unnecessarily complicated structures that don’t save them money but cost them.
If you’re just starting out, consider whether you need to incorporate or operate as a sole proprietorship or partnership until you have a compelling reason to incorporate.
If you decide to incorporate, consider the structure and if it is completely necessary at the time. There’s no point in founding several corporations and incurring the time and money to take care of them all when one will do.
In our next blog post, we look at #5 on our list -> just don’t pay any taxes (we’re obviously kidding.) Watch for that blog post on how to pay more for bookkeeping services!