How we worked with Iona Handcrafted Books

By PRETTY BOOKS ON August 15, 2022
A window into our work.   Wondering how we can help your small business? These case studies showcase just some of the work we've done with our clients. From catching up on bookkeeping, to helping you understand your financials, to helping you make decisions and prepare for your future, there's a lot we can do. Read more in Case Studies).

Who we worked with

Mychal discovered the art of journal making in Italy in 1993. After her journal was stolen on vacation, she met an artist who specialized in hand crafting leather journals that offered to teach her the trade. She received so many compliments on her first journal that she started crafting them to sell to anyone who asked for one. In 1994, Iona Handcrafted Books was born. Now you can find Mychal’s handcrafted books on her website or in art fairs and expos across the country.

Our initial review

Mychal came to us for help reorganizing her books for 2020 and 2021. She previously worked with a bookkeeper but that relationship ended, leaving Mychal to try to keep up with the books herself. While Mychal is extremely passionate about crafting her journals, finance and accounting is not her favorite part of running her business. As far as money management and scalability goes, it is secondary to her love of art.

Here’s what we noticed when we took a closer look:

  • There was a lot of business and personal transactions in the books, and it wasn’t clear which was which
  • The client had supplemental income from Airbnb
  • A lot of transactions were categorized incorrectly
  • There wasn’t a lot of detail in the categorizations, making it hard to identify what everything was for
  • A lot of the transactions were categorized under an overarching “business expense” rather than being broken down into detailed categorizations
  • Some transactions were missing and unaccounted for in the books… it was as if they didn’t exist

What we did

In order to revitalize the books, we started from the beginning.

Step one: 🔄Sync QuickBooks with the bank account and import all transactions.

Step two: 🗄️Organize the Chart of Accounts (a document explaining how everything is categorized) so it makes sense to Mychal and is easy to understand for her next bookkeeper. This way Mychal can use her books to their full potential and without too much confusion.

Step three: 🗂️Categorize everything, from transportation to supplies to personal expenses and everything in between. This step took some problem solving from the team. If something didn’t make sense for a handcrafted book company to pay for (i.e. moving expenses), we made our best guess at the category and flagged it so we could ask Mychal about it later.

Step four: 🤝Collaborate with the client. After our initial attempt to categorize transactions, we requested the client’s collaboration to review our work and ensure that the transactions were accurate.

Step five: 👀 Reconcile the bank statement against actual transactions, i.e. double check that all the transactions are there and match the bank statement. This is the step where we discovered some missing transactions that were recorded in the bank statement, but didn’t have a match in the books. During this step we also made sure no transactions were accounted for twice.

Step six: ⏩ Create a projection that shows what Mychal can expect in the next six months to a year. This projection was created specifically for her to ensure that it’s easy to use and understand and can provide valuable insight into how Iona is expected to do in the future.

Step seven: 👯 Consult with the client. Here’s where we really get our client onto the same page. We shared our findings, provided advisory, shared our projection, and helped Mychal get her business refreshed and revitalized for the future.

🔹Pro-tip: Get two credit cards- one personal and one business card. Only use your business CC for business transactions. Any moving expenses, lunches out, etc. should be on your personal CC. Another pro (besides making it easier to organize your books) is that some of these things could be a tax write off in your personal taxes.

Here’s what we saw

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The information provided in this post is for general informational and educational purposes only and is not a substitute for professional advice. Consult your financial, business, or tax advisor with respect to matters referenced in this post. Pretty Books assumes no liability for actions taken in reliance upon this information.
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