Businesses require people to run. That means that eventually, most businesses require more people. Congratulations, you’re hiring! But now what? Abacus the Accountant tackles finding an employee’s market worth, estimating how much you can realistically pay, and planning for the growth of your business in this week’s edition of Dear Abacus.
“Depreciation” came up in a meeting. A dictionary said it means “allocating the cost of a physical asset over its life expectancy to help companies earn revenue from an asset while expensing some of its cost each year it is being used, representing how much value has already been used.” Here’s what your accountant really means when she says “depreciation.”
Falling behind on your bookkeeping? Abacus the Accountant talks tips and tricks for getting back on track as well as some advice for keeping up with bookkeeping in the future. The best way to avoid falling behind in bookkeeping is to create a habit. Read more in this week’s edition of Dear Abacus.
You’re always a little uncertain when it comes to cash. Can you hire a new employee? Purchase that new technology? Every time you hit that “submit” button on payroll, you’re nervous- will your bank account be able to handle it? Your understanding of your cash situation is foggy. Here’s the deal, you need to establish a weekly cash flow sync up.
Today is Planning day. Like ocean tides, accountant work in a cycle. At the beginning of each month, the tide comes in with a tropical storm of reconciliations and mathematics while they work on month end close. At the end of the month, the tide goes back out and leaves accountants with time to catch up on projects and prepare for the next incoming tide.
You’re hungry to understand where your business stands. You’re thinking about this word “profitability.” You print off your Profit and Loss Statement and look at the top number and the bottom number. Somehow, things are not making sense to you. You feel incomplete, and a little confused. You’re really not even sure if you’re making any money. Here’s the deal. Perfect bookkeeping is not necessarily reporting your profitability.
Your final deliverable for your latest sale was was accepted, and you’re excited to see its impact on your bank account. You take a look and find that nothing really changed. You’re feeling discouraged. This was a big sale, and you were hoping the payout would add some cushion to your cash flow. Here’s the deal, more sales doesn’t necessarily mean more money in your bank.
By having a process to create and maintain employee personnel files, you can make sure you stay organized and meet all the requirements for employee documents you have to have on hand. Here is a process for creating personnel files, including easy to follow directions, tips and tricks, and an ingredients list for the perfect dish. Bon Appetit! Enjoy!
Your accountant is forecasting your cash runway. She says the cash runway is “the amount of time you can continue to operate if you don’t have any money coming in. Let’s say you have $60,000 in the bank and it costs you $10,000 just to operate, you have 6 months before it will run out.” Here’s what she really means when she talks about a “cash runway.”
It is common for startups to be acquired. Acquisitions are rollercoasters of work. They are full of excitement, ups and downs, and sleepless nights. “You can imagine that if one thing goes out of place, the whole process is stalled.”
Today is Study Group Day. On these days, accountants take a step back from their every day work and shift their focus to the broader accounting world. They discuss case studies, breaking news and trends in finance to better explore the world through numbers.
By having an up to date, written record of time your employees take off, you can help prevent disputes if an employee questions their PTO balance down the line. Here’s a recipe for creating and implementing a policy for managing time off (and recording it), including easy to follow directions, three tips and tricks, and ingredients list. Bon Appetit!
Your accountant mentioned “scrubbing the general ledger” the other day. You couldn’t find what it meant on the internet, so you assumed it’s something along the lines of doing the dishes, but on numbers in your general ledger. You’ll probably decide to ask her later, but for right now, here’s what she really means when she says “scrubbing the GL.”
Small business are powerful, but sometimes they are met with roadblocks only their accountant can meet. When an accountant’s expertise, speed, and experience are needed by a client, they will do will do whatever it takes to provide it. Here’s a story of one accountant who enlisted her team to meet a rapidly approaching deadline after work hours.
Today is Catch-Up Day. These are days where the high tide of work accountants usually face is out, leaving them with time to clean up the beach and finish projects they are usually too busy to take care of. Accountants use this time to file paperwork, catch up on their to-do lists, research, and regroup with their team without the threat of a looming deadline.
By using one specific email address for all of your accounting documents, you can streamline the accounting process for your financial professionals and minimize the risk of losing documents if you lose access to an email inbox. Here is a recipe to create an inbox for accounting, including easy to follow directions, tips, and ingredients. Bon Appetit!
You heard the word “intercompany” in an accounting drama on TV. What the actor said it means is “a relationship between separate legal entities that belong to the same corporate enterprise, like a parent company and it’s subsidiaries that makes transactions between them very complex.” Here’s what it really means when they say, “intercompany.”
It takes a community of great minds coming together to solve great problems. When the Small Business Association released new loans under the CARES act, a community of financial professionals, bankers, and their clients had to come together with their own ideas and perspectives to solve the issue of the Paycheck Protection Program: what to submit.
Today is Go See the Client Day. Sometimes, for convenience, an accountant leaves their office to meet a client. Sometimes it’s in their places of business—a plant shop that looks more like a jungle, a retail store’s back room full of boxes, or even a restaurant floor in the middle of the lunch rush. Sometimes it’s somewhere between the accountant’s office and the client’s place of business—a coffee shop, a park bench, or anywhere with a table and chairs (and preferably Internet access). Either way, Go See the Client Day is an adventure. Not only does the accountant get to see their client face to face, they also get to spend some time out of the office, maybe even grabbing a coffee along the way.
By taking out an appropriate and consistent owner’s draw, you will make it easier on your accountant to manage your financials and prepare for your taxes. Being consistent helps make it easier to budget and calculate how much money your business has. Here is a recipe for taking out an owner’s draw that will keep your accountant happy. Bon Appetit!
You overheard an accountant say she’s a “financial controller.” She said that means she manages all finance and accounting operations of a business, from coordinating and directing the preparation of the budget to forecasting to reporting variances to prepping monthly financial statements. Here’s what accountants really mean by “financial controller.”
Some client meetings are simple, and some are analytical deep dives into the operations of a business. During these meetings, key decision makers and their accountants review trends, productivity, and results of their business’ operations. One accountant knew her deep dive with a client was going to take so long that she pre-ordered lunch for everyone.
Instead of a day packed to the brim with number problem solving, analytical deep dives, and model building, the accountants have an easy-going day. This Friday is spent catching up with work and each other, networking with partners, and taking a breather from the hustle and bustle of a busy consulting firm. Here is one accountant’s Fun Team Friday.
By counting your inventory, you can avoid mistakes when you order products for your business. Having an organized process keeps you from ordering items you don’t need or forgetting products you definitely need. Here’s a recipe for a perfect process for counting your inventory, including easy to follow directions, tips, and ingredients. Bon Appetit!
Your accountant mentions “accounts receivable aging.” She says it means “the method of sorting the customer receivables by the due date to estimate the bad debts expense to the business. Accounts receivables arise when the business provides goods and services on a credit to the clients.” Here’s what she really means by “accounts receivable.”
Good communication is imperative to getting things done. When communication is interrupted by a change, lack of understanding, or a faulty system, it can become harder and harder to find the information you’re looking for. Here is how one accountant ended a a seemingly endless game of Telephone by creating a whole new process for paying bills.
Today is payroll day. It is the day accountants clean up employee time cards, get in touch with managers to verify that hours are correct, check paid time off, and submit payroll. While payroll day is not usually very complicated, it can be nerve wracking knowing you’re the one in charge of making sure people receive the correct paychecks on time.
By paying your bills on time, you can make sure you don’t put strain on your relationships with vendors and contractors. The people you work with hold you to a higher standard when you promise the return of payment. If you don’t meet that standard, they might think you are an unreliable partner. Here’s a recipe for paying bills weekly. Bon Appetit!
Your accountant is scrubbing the general ledger this month. She says the general ledger is “the record keeping system of all of a company’s financial data, from debit and credit card spending to expansion, providing a true record of every financial transaction a company makes in its entire lifetime.” Here’s what she really means by a “general ledger.”
Most people assume there is a blueprint for the way you do accounting. While math and spreadsheets are almost always involved, sometimes the scope of an accountant’s work goes way beyond that and into identifying relationships, eliminating redundancies, and auditing companies. Solving puzzles like these require accountants to use their thinking caps.
By creating an organized process for collecting on aging invoices, you can maintain your payment schedule and stay professional when dealing with clients who owe you money. Here is a recipe for collecting payment on invoices that will keep you on track and professional when dealing with customers, including directions and tips. Bon Appetit!
So your accountant is talking about “balance sheet reconciliation.” She tells you it means “a balancing of the amount on your balance sheet GL accounts and the details that make up those balances, while ensuring that any differences are adequately and reasonably explained.” Here’s what she really means when she says, “balance sheet reconciliation.”
Communicating complicated analysis in a way that is easy to understand is a skill accountants are constantly working on. Being able to translate their complicated processes and findings to an audience that does not understand accounting is a challenge, especially when these findings contradict the existing beliefs of the clients they are speaking to.
Today is Bookkeeping Day. These are the days accountants record massive amounts of transactions from various bank accounts and credit cards for their clients to map the movement of money within a business. Accountants define every transaction based on what it was for into a variety of categories to show where money came from and where it is going.
By creating a clear policy around employee reimbursement and recording these transactions, you can easily repay employees and have written proof if there is a dispute down the line. Here is a recipe for implementing a process for paying back your employees, including easy to follow directions, tips and tricks, and ingredients you need. Bon Appetit!
Your accountant is collecting all receipts from the year. He says they are a “a written proof of purchase of having received an agreed upon amount of money, goods, services, etc. that can be physical or digital, but should be kept organized because they’re important throughout the year.” Here’s what he really means when he talks about “receipts.”
Trouble shooting numbers and solving mathematical issues is a large part of an accountant’s job that is often overlooked. Sometimes, the problem lies deeper than the math. Sometimes the problem is in the process followed to find the calculation. One accountant’s problem solving revealed a deeper issue with a client’s process: a lack of understanding
Today is Accounts Payable Day. Accountants spend the day gathering bills for their clients for utilities, services, vendors and more. They collect receipts for employee reimbursement. Accounts payable day is monotonous, and mostly consists of an accountant signing in and out of online portals to download invoices and input numbers into Quickbooks.
By having an organized process for storing receipts, you don’t have to waste valuable time searching for them. Upgrade from the shoebox! Here’s a recipe to get your receipts into storage and you back into your business, including easy to follow directions, tips and tricks, and an ingredients list you’ll need to make the perfect dish. Bon Appetit!
So your accountant is working on “accounts payable aging.” He says it means “a report that shows what bills you still owe vendors, how overdue they are, and how much you have to pay right now to stay on top of them,” but all you hear is “bills, bills, bills.” This is what your accountant really means when he says the words “accounts payable aging.”
Accountants frequently stay late or work on weekends to meet urgent and important requests from their clients. Due to the nature of these requests, even the smallest task can be so integral to a business’ future that accountants have no choice but to help. Here’s a story of why one accountant paused a family game to send her client some paperwork.
Today is client onboarding day. These are the days accountants take the reins from their account management team and meet their clients for the first time. Client onboarding days start with a lot of research into the company and what they do, preparation, and quite a few meetings to discuss its needs, priorities, and expectations of the accountants.
By keeping all your accounting related documents together in one folder, you can help streamline processes like filing taxes and audits. Here is a recipe to save time by keeping all your documents in one organized accounting folder on your company’s server, including easy to follow directions, tips and tricks, and ingredients you need. Bon Appetit!
So your accountant is talking about “bank statement reconciliation.” He tells you that it means something along the lines of “reconciling bank accounts with financial reports,” “deposits and withdrawals,” and “truing up your transactions,” but all you hear is static. Here’s what he really means when he talks about, “bank statement reconciliation.”
It’s easy to think that accountants spend most of their time behind a computer analyzing data for clients they don’t get to know. What people don’t realize is that accountants spend sometimes years cultivating relationships with their clients. Over the course of five years, one accountants’ professional relationships transformed into a friendship.