The title of this blog was taken directly from an email conversation between a mentor and a start-up business owner. This new entrepreneur knew it was essential to seek out a professional mentor that had, as he put it, done this many times before. In this particular email he had two questions for his mentor.
Do you actually charge interest on overdue invoices?
Sometimes I charge interest. I expect that you have been phoning and nagging at least weekly. If not, you must.
I’ve got a student who has agreed to help me out part time – she’s perfect in that she has great skills and is super flexible. Only we haven’t come to any terms about her employment/contract/whatever. I think the easiest thing for me to do is to sub-contract her, but I’m not sure if there are any pitfalls to this idea.
- It is my understanding from my bookkeeper that if you hire someone on contract and they do not have other sources of income you may be declared their employer and have to pay Payroll Source Deductions retroactively. If you hire them as an employee, you have to pay Payroll Source Deductions monthly for the previous month’s pays.
Do you have a book keeper?
Didn’t think I’d need a bookkeeper….maybe I do. If only I had time to find one.
- You do need a book-keeper.
This mentor had learned from building a successful business a bookkeeper was needed. Answers to these questions are possible through outsourcing to a professional bookkeeper and implementing a computerized bookkeeping system. It is imperative to invest a little of that start up money on quality and accurate bookkeeping records.
You’ll be on top of the game and the competition with a simple click of a button or a phone call to your bookkeeper. Your financial statement and month end reports fulfill the checklist of a well managed company for all stakeholders. The institute of Professional Bookkeepers of Canada www.ipbc.ca is a great resource to help you find a qualified bookkeeper.
Monitoring the progress of your business from the beginning stages is critical for new businesses to grow and you need to prepare a cash flow plan. A professional bookkeeper can help you prepare budgets, cash flow plans and a break-even analysis by looking at your projections of revenue over variable and fixed costs.
With accurate bookkeeping you will be able to check on progress such as increased profitability tracking, accounts receivable monitoring, and controlling expenses. How does the data compare with your projections? Are you on track or falling behind?
Clean tax records will keep you and your business in good standing with your banker, investor and Canada Revenue Agency.
Your bookkeeper and accounting software will provide monthly financial statements and reports that provide a precise road map of which direction to take your business in the future. No more sleepless nights wondering if you have made the right decisions. You will feel confident with the numbers to back you up. Start focusing on what matters and hire a professional bookkeeper today. The rest will follow!
Dianne Mueller CPB
Soma Small Business Solutions