Latest / The 3Bz Podcast - Building Better Business / EP152 - What Your Bookkeeper Wishes You Knew

Transcript

EP152 - What Your Bookkeeper Wishes You Knew · The 3Bz Podcast - Building Better Business

• 0:01
  Hi there business owner, and welcome to the Three BS Podcast,
• 0:04
  the place where we go beyond the numbers and dive into the
• 0:07
  strategies to help you build a Better Business one step at a
• 0:10
  time. I'm your host Stephanie, a multi
• 0:12
  awarding entrepreneur with over a decade of experience in the
• 0:15
  bookkeeping and currency world. If you're a business owner
• 0:17
  looking to streamline, grow and get back the time that you
• 0:20
  deserve, you're in the right place.
• 0:22
  We're tackling real world problems, answering tough
• 0:24
  questions and digging deep into business building secrets in
• 0:27
  just 15 minutes each week. So Are you ready to build a
• 0:31
  Better Business with confidence and clarity?
• 0:33
  Then let's go. Hello and welcome back to
• 0:36
  another episode of The Three BS Podcast, your go to place for 15
• 0:40
  minutes of motivation, education and inspiration to help you
• 0:45
  build a Better Business. If you're new here, hi, I'm
• 0:48
  Stephanie, a bookkeeper and accountant with over a decade of
• 0:50
  experience in the financial world and have been building my
• 0:53
  own businesses alongside this for almost five years.
• 0:57
  Today's episode is slightly different.
• 0:59
  It's not a rant or a lecture, and it's definitely not me
• 1:02
  telling you off. But it is me telling you a few
• 1:04
  things that your bookkeeper probably wishes that you knew.
• 1:07
  And if you don't have a bookkeeper yet, consider this a
• 1:10
  preview, a look behind the curtain of what we wish you knew
• 1:14
  as a business over. Because there are some things
• 1:16
  that make running your business financially smooth, and there
• 1:19
  are some things that make it feel like herding cats in a
• 1:22
  thunderstorm pushing that rock up a hill.
• 1:25
  Now let's avoid those things and make it as easy for you as
• 1:28
  possible. Because having that data, If
• 1:30
  you've listened to any episode of the Three BS Podcast, you'll
• 1:33
  know that data really is the key to helping you build a Better
• 1:37
  Business. .1 is your bookkeeper is not a mind reader.
• 1:41
  I know we seem like it at times, but we cannot guess what that
• 1:44
  £427.00 payment was for. We cannot intuitively know
• 1:49
  whether that transfer was a loan director, salary expense
• 1:52
  reimbursement or I just moved money because it looked wrong or
• 1:55
  I paid on the wrong card. It happens.
• 1:58
  We're all human, but as bookkeepers we're not mind
• 2:01
  readers and we can't see that information from a bank
• 2:03
  statement line on a bank feed. If money leaves your account and
• 2:06
  there is no description, no receipt, no context, someone has
• 2:11
  to chase you. And that someone is usually us.
• 2:14
  The smoother you want your finances to run, the clearer
• 2:16
  your communication needs to be. What I'm not saying is you need
• 2:19
  to send a WhatsApp for an e-mail every single time you make a
• 2:22
  payment. But what you can do is use
• 2:24
  software such as we use apron capture in the practice at
• 2:28
  ABCSUK is take a photograph, WhatsApp that receipt when you
• 2:33
  put fuel in, when you make a purchase, forward the invoice
• 2:36
  straight away. That makes things easier and
• 2:40
  quicker. When it comes to VAT returns,
• 2:43
  come in to do your MTD. If you're a sole trader, once
• 2:45
  that comes into force in April, having that information makes
• 2:49
  our job easier. We don't have to chase you for
• 2:52
  it. And if you start to build the
• 2:53
  habit now, it becomes second nature and you don't even have
• 2:56
  to think about it. If something unusual also
• 3:00
  happens in your business, tell us.
• 3:02
  If you've bought a van, tell us. You've changed your payment
• 3:05
  provider or software provider? Tell us.
• 3:08
  Move banks, We're going to need to know that too.
• 3:11
  And if you start paying yourself differently, tell us.
• 3:15
  Surprises are lovely for birthdays, they're less lovely.
• 3:18
  In bookkeeping, .2 VAT is not a shock, it's a calculation, one
• 3:25
  of the most common phrases we hear as bookkeepers.
• 3:27
  I didn't realise it would be that much when the VAT bill
• 3:29
  comes in. That is really surprising.
• 3:32
  It is simple maths. If your VAT registered, 20% of
• 3:36
  most of your sales do not belong to you, it belongs to HMRC.
• 3:41
  And if you treat that like available cash, your future self
• 3:43
  will panic. You'll struggle to pay those VAT
• 3:45
  bills and I cannot tell you the amount of times I've seen that
• 3:49
  happen with business owners. A good bookkeeper will tell you
• 3:52
  roughly where you stand long before the deadline.
• 3:55
  But it's also your responsibility to have A and
• 3:58
  look into it and be aware of that information.
• 4:01
  If your turnover increases, your VAT increases.
• 4:05
  If your margins shrink, your stress increases too.
• 4:08
  And it's also important to note that yes, you can reclaim some
• 4:11
  of the VAT on your expenses. Not everything you purchase it
• 4:15
  has VAT. Wages and staff costs, for
• 4:18
  example, don't have VAT. Your postage in most cases is
• 4:24
  exempt if you use Royal Mail. Different for couriers.
• 4:27
  But again if you're a business that quite heavily sells
• 4:30
  products, your postage is one of your main expenses.
• 4:34
  If you're a product based business that sends things out.
• 4:38
  Expense is not going to reduce your VAT bill.
• 4:41
  Same with your wages, it's not going to reduce your VAT bill.
• 4:45
  Which means it's not a simple income minus expenses.
• 4:48
  And 20% of that is what you pay VAT.
• 4:51
  It's the Vatable transactions that matter.
• 4:53
  So ignoring the dashboard does not change the numbers.
• 4:55
  It's important to know and stay on top of that.
• 4:58
  Now a good bookkeeper will say to you, OK, on average you
• 5:02
  actually pay 17% of your income. By the time all the expenses
• 5:08
  have taken off that are are allowable for VAT, then you can
• 5:11
  start putting 17% away instead of 20%.
• 5:14
  But these things will fluctuate. And we will always say a good
• 5:17
  bookkeeper will always tell you to put 20% away, especially for
• 5:20
  the first quarter when you're working with them, so that they
• 5:23
  can help calculate that for you. But you know, you've got your
• 5:25
  VAT money saved plus a little pot that's yours every quarter
• 5:29
  #3 receipts matter more than you think.
• 5:31
  And we're going back to that .1 of we're not mind readers.
• 5:34
  We don't know what you are spending and we don't know what
• 5:38
  the lines are on the bank statement that coffee might be
• 5:42
  allowable, that lunch might be allowable, that random Amazon
• 5:46
  purchase might be allowable. But without a receipt, I can't
• 5:50
  justify that. And your bookkeeper cannot
• 5:51
  justify that too. And more importantly, without
• 5:54
  proper categorisation on your accounting software into your
• 5:57
  balance sheet and profit and loss, you can't see patterns.
• 6:00
  Expenses are not just about tax savings, they're about decision
• 6:04
  making too. If you don't know what you're
• 6:06
  actually spending on software, what you're actually spending on
• 6:09
  subscriptions, travel or contractors, how can you manage
• 6:12
  your margin properly? How can you make decisions on
• 6:15
  that business? Clean data equals confident
• 6:18
  decisions, and messy data equals guesswork, and guesswork means
• 6:22
  you are not going to be able to build a Better Business.
• 6:23
  If your software increases as most do on an annual basis.
• 6:27
  We need to be aware of that. If you're buying things from
• 6:31
  Amazon that is stationary, that will go in a very different
• 6:34
  place on your profit and loss and balance sheet in your
• 6:36
  accounting software than if you're buying stock on Amazon
• 6:39
  that you're going to resell or materials on Amazon that you're
• 6:42
  going to use to turn into a product to sell. 4 Late
• 6:44
  information creates expensive work.
• 6:47
  Bookkeepers don't mind working hard.
• 6:48
  We don't even mind working to a short deadline.
• 6:51
  What makes things difficult is working reactively.
• 6:54
  If we received 10 months of backlog 2 weeks before a
• 6:56
  deadline, that's no longer bookkeeping.
• 6:59
  That's damage control. And damage control costs more.
• 7:02
  And I don't mean just as an invoice from your bookkeeper.
• 7:05
  And it's not because we're being awkward.
• 7:07
  Urgency compresses time, increases the risk of making
• 7:10
  errors, and removes the ability for us to think strategically
• 7:13
  about managing your business. If you want calmer year ends and
• 7:18
  quarters for VAT, you need consistent information flow.
• 7:21
  That's why we all talk about putting your bank feeds into
• 7:24
  your software. So whether you use Zero,
• 7:26
  QuickBooks, Sage, Free Agent, any of those accounting
• 7:29
  softwares, we get you to connect your bank to the bank feed,
• 7:31
  which means at most we're a day behind.
• 7:35
  We can see what happened yesterday on the bank statement,
• 7:37
  which gives us a really clear picture of what your business is
• 7:39
  doing. Bookkeeping works best little
• 7:42
  and often, so giving us a pile of receipts and a shoe box once
• 7:45
  a year isn't going to cut it. And also, once MTD comes in, if
• 7:49
  you're a sole trader or a landlord, you're going to have
• 7:52
  those quarterly deadlines anyway.
• 7:54
  So we can't be waiting till the last minute because those
• 7:57
  quarters don't change. With VAT you there's three
• 8:00
  different sets of quarters you can choose from and we often
• 8:03
  align them with your year end. So we can have a VAT period that
• 8:06
  ends in February, we can have a VAT period that ends in March.
• 8:08
  That means we can spread our clients work across the year.
• 8:11
  With MTD, those quarters are set in stone.
• 8:14
  They're run by a calendar year. Every single sole trader and
• 8:17
  landlord that is brought into making such digital will have to
• 8:20
  submit with the same deadlines you do, Which means bookkeepers
• 8:23
  and accountants have to be more strategic with how and when they
• 8:27
  do that bookkeeping for you. Which is why we need that
• 8:29
  consistent information flow #5I talk about it all the time on
• 8:33
  the podcast. Profit is not your bank balance.
• 8:36
  You can have money in the bank and still not be profitable.
• 8:39
  You can be profitable on paper and feel like there's no cash in
• 8:42
  the bank. Your bookkeeper isn't just
• 8:44
  recording history. We're helping you understand the
• 8:47
  story of your business. Now, there's a there's a saying
• 8:51
  that's thrown around a lot and that's turnover is vanity.
• 8:54
  Profit is sanity. Cash is king.
• 8:57
  Now I want to tweet that slightly Turnover is vanity,
• 9:00
  profit is sanity, but cash flow is the reality of what's going
• 9:04
  on in your business. Many times we buy things with
• 9:08
  3060 day terms. When we send out invoices, we
• 9:11
  may have terms with our bigger customers when we ask questions.
• 9:15
  As bookkeepers, we're not trying to be difficult.
• 9:17
  We're trying to protect you from blind spots and those sticky
• 9:20
  things that 'cause you excess stress and panic.
• 9:23
  Number six, you don't need to know everything.
• 9:26
  I don't know everything, but you do need to engage.
• 9:30
  You don't need to become an accountant or a bookkeeper, and
• 9:32
  you definitely don't need to love spreadsheets, but you do
• 9:35
  need to look at them and not bury your head in the sand.
• 9:38
  A quick monthly review, a basic understanding of revenue versus
• 9:41
  costs, and a rough idea of upcoming liabilities.
• 9:45
  As a bookkeeper, I can absolutely go through that with
• 9:47
  you, but you also need to understand it to a degree to
• 9:51
  help you with your business because I'm not there holding
• 9:53
  your hand every single day. Financial avoidance is so
• 9:57
  common, but avoidance creates fragility.
• 10:00
  You're not stable as a business owner, and if you're looking to
• 10:03
  grow and build a Better Business, which I presume you
• 10:05
  are by watching or listening to this podcast, having that
• 10:08
  engagement with your numbers will create that stability to
• 10:11
  help you grow #7 I think this one's going to ruffle a few
• 10:14
  feathers, but boundaries protect both of us.
• 10:17
  If your bookkeeper asks for information by a certain day,
• 10:20
  it's not flexible. There's a reason for that.
• 10:22
  There's a workflow, and when clients respect timelines,
• 10:25
  everything flows nice and easily and you get a better service
• 10:28
  because of it. When deadlines start to drift,
• 10:31
  work starts to back up, and stacked work increases those
• 10:34
  mistakes we talked about earlier.
• 10:36
  Good financial support is a partnership and we can truly
• 10:39
  help you build and scale your business sustainably and
• 10:42
  confidently, and we can make huge impacts in your business.
• 10:46
  This is not a handover though, it has to be a partnership.
• 10:50
  Boundaries are something that a lot of business owners struggle
• 10:53
  with. So scope creep is so common in
• 10:55
  our in our industry as bookkeepers and accountants
• 10:58
  where a client will ask you to do something extra, provide you
• 11:01
  an extra set of management reports, give you a list of
• 11:03
  debtors who owe you money, start chasing that client that hasn't
• 11:07
  paid. That's scope creep and you need
• 11:10
  to be charged for that and we need to charge for that as
• 11:12
  bookkeepers and accountants accordingly.
• 11:13
  It's really important that we have our boundaries in place and
• 11:17
  we respect them. And the same for you as a client
• 11:21
  of ABCSU K1 of the first questions we ask on our new
• 11:24
  client form is what's your preferred method of
• 11:26
  communication? Many people nowadays don't like
• 11:30
  me to pick up the phone and call them.
• 11:31
  They want a WhatsApp or a voice note or an e-mail that they can
• 11:34
  pick up in their own time. Particularly if you've got a
• 11:36
  business that runs outside of normal working hours, you have
• 11:40
  caring or parents or responsibility, you're not going
• 11:42
  to want me calling you at 3:30 because you're in the middle of
• 11:46
  the school run. And that increases your stress
• 11:48
  and pressure. And the whole point of having a
• 11:50
  bookkeeper in your business is to help you and relieve some of
• 11:53
  that pressure and stress around the financial arm of your
• 11:55
  business. With #8 I'm hoping that this
• 11:58
  sort of fixes any feathers that I've ruffled with #7 we want you
• 12:03
  to win. This is so important.
• 12:05
  Your bookkeeper is not waiting for you to slip up.
• 12:08
  We're not trying to find holes in your business.
• 12:10
  We're not judging your spending. We're not secretly horrified by
• 12:14
  your Amazon history. We want your business to grow.
• 12:17
  Because when your business grows well, sustainably and
• 12:19
  profitably, that's a success story for everyone involved.
• 12:23
  You get to achieve your goals. As your business grows, you're
• 12:26
  going to need more support, so our business grows too.
• 12:29
  When we do suggest changes, systems or tweaks, it's because
• 12:32
  we can see patterns that you might not.
• 12:35
  We don't have the emotion that you have in your business.
• 12:38
  While we still care and we sit in your numbers daily, we don't
• 12:42
  sit in the delivery daily, which means that we can see things
• 12:45
  from an outsider's perspective. But with all the information
• 12:49
  that's inside your business that only you and your bookkeeper
• 12:52
  know about together works better than separately.
• 12:55
  And I really want you to take from this episode that having a
• 12:58
  bookkeeper in your business is having an extra cheerleader,
• 13:01
  having someone to keep you accountable.
• 13:03
  It's a non negotiable if you want to grow and scale and build
• 13:06
  your business. So the real wish, if I could
• 13:09
  summarize all of this episode of what most bookkeepers wish
• 13:11
  business owners understand, then it's probably this.
• 13:15
  Having clean finances reduces stress more than motivation ever
• 13:19
  will. You can visualize your six
• 13:21
  figures. You can journal your mindset,
• 13:24
  but if your numbers are unclear, your body will know.
• 13:28
  Clarity is so underrated. It makes such a huge difference.
• 13:31
  It is so powerful when building and scaling a business, and your
• 13:35
  bookkeeper can help you with that 110%.
• 13:40
  If you already have a brilliant bookkeeper, do send them a thank
• 13:43
  you message today. I promise you they're really
• 13:45
  going to appreciate it. And if you don't and your
• 13:48
  finances currently feel like a mild guessing game or you don't
• 13:52
  feel like you're getting the support you need, it might be
• 13:54
  time to change. You'll find all the ways to work
• 13:57
  with us at ABCSUK. In the show notes, you can book
• 13:59
  a free 15 minute discovery call to see if we're the right fit,
• 14:02
  to see if what you have is what you need.
• 14:04
  Or if you don't know what you need, then we can figure that
• 14:06
  out together. If this episode helped you to
• 14:08
  understand the partnership better between bookkeeper and
• 14:11
  business owner, please do like, follow rate and review wherever
• 14:15
  you're listening to it. Subscribe on YouTube and hit
• 14:17
  that notification bell so you know when the next episode goes
• 14:20
  live. Even better, share this with
• 14:22
  another business owner who needs to hear it.
• 14:24
  I'm Stephanie. This is the Three BS Podcast and
• 14:27
  I'll see you next week for the next episode.
• 14:29
  Bye. And that brings us to the end of
• 14:32
  another episode of the Three BS Podcast.
• 14:34
  I hope you found it useful and that you're walking away with
• 14:36
  some motivation, inspiration or education to help you build a
• 14:40
  Better Business. Don't forget to subscribe, leave
• 14:43
  a review and of course, connect with us on social media for more
• 14:45
  insights, tips and behind the scenes content.
• 14:48
  Your next step in building a Better Business is just a click
• 14:51
  away. I can't wait to connect with you
• 14:52
  and I'll see you on the next episode.
• 14:54
  Bye.