One of the things I like to do once the Christmas festivities are over and the new year has been rung in is to take a look back at how my business fared during the past year. This is a useful activity to do as it not only reminds you of where you are heading but it also gives you a chance to celebrate your successes and little wins which are often forgotten amidst the hustle and bustle of business life.
There are several ways to do this (most very involved and complicated) but last year I found this article in “Flying Solo” by Robert Gerrish** which explains how to review your business year in just 15 minutes. Being a very time-poor solopreneur, this appealed to me very much so I gave it a go, loved it, and will be doing it again this year!
Gerrish explains in the article, that even though you may be the only person working in your business, it is still important to hold yourself accountable for all business outcomes whether they be positive or negative. One way to do this is to review your business year (every year) and Gerrish has provided 5 simple review questions that he claims you can answer in 15 minutes.
In our last blog, we told you about our new paperless bookkeeping system that we now use for our own bookkeeping/accounting. It works so well that we have extended the idea to that of how we store our clients’ records in our desire for a paperless office.
Our system for storing client records used to look something like this picture!
Starting this financial year 2013-14, we’ve decided to go paperless! We’re changing our own bookkeeping processes and also how we keep our clients’ records. In part one of this blog, we’ll tell you about our new paperless bookkeeping system.
Why do we want to go paperless?
We work from a small home office. When I say it’s small, I mean really small! It currently has 2 full filing cabinets, 3 full large tubs housing client data, and a bookcase brimming over with our own bookkeeping records. Basically, we’ve decided that if we don’t go paperless, our small office will just become a glorified archive room dedicated to storing reams of paper (and probably layers of dust!). As we don’t have the option of confiscating the second room in the house for an office, we decided that we should do something now before the paper really takes over and loss of space becomes a big issue.
There are also other reasons why we want to go paperless:
Paper deterioration – over time all paper slowly deteriorates and either falls to pieces or becomes completely illegible. Keeping electronic records solves this problem.
Back ups – our system is backed up every day to an online system called Jungle Disk. Our paperless solution is included in this daily back up. All data is kept safe from possible loss, something that cannot be guaranteed in relation to the paper records. Paper records are at risk from potential threats such as fire, flood, theft etc.
Security – electronic records are protected by the cloud program used to house them as well as by the backup system we use. Again, such security cannot be assured in relation to our paper records.
Search function – we use Google Drive to house our records. Google is famous for its search magic! One of the reasons we chose Google Drive is so we can find stuff easily via the search function. The same cannot be said for our paper records. While they are stored alphabetically and via financial year, that’s about as close as it gets to being able to find anything quickly. Finding data still requires pulling out folders and files and spreading them around the office until we find what’s required – not exactly efficient!
Everything in one place – as I mentioned above, we’ve got stuff stored in filing cabinets, tubs and a bookcase (there might also be folders in the cupboard but I don’t want to look in there!). Our records are all over the shop (office)! It’s tidy but it’s not efficient. By using Google Drive, we can be assured that all data is in one place – much easier to find things!
Easily share data with others – I dropped off our usual 2 folders containing our financial year-end records to our accountant for the last time a couple of weeks ago. His office is a one hour return trip to my house. I told him that next year I’ll be sharing my electronic tax folder with him and if he needs to meet with me, we can do it via Skype! Those who use Google Apps will know that you can share any folder or file with anyone. This means no more printing out documents and no more paper! If the accountant (or anyone else) wants to see a document, it can easily be shared with him and/or emailed as necessary. Goodbye paper and goodbye unnecessary travel!
Our paperless bookkeeping system
As mentioned already, we have decided to use Google Drive as our online storage facility. We use Google Apps in our business so using Google Drive is logical for us. Google Drive gives us 30Gb of space free before we’re required to purchase extra storage – pretty good!
For our own bookkeeping system, this is how we set up our folders in Google Drive:
Create master folder called "e-BAS Accounts Tax"
Create sub folders called "To be paid", "To be entered to Saasu" and "2013-14 FY"
Within the "2013-14 FY" folder, create further sub-folders for each expense category required. These categories are taken directly from the chart of accounts used in our accounting system. This will make it easier to find data later.
This is what we do once a week to keep our accounts in order:
Any paper receipts and/or bills are filed away in a folder (yes paper, I know, I know!) called “to be scanned”.
On “bookkeeping day” in our office, the items in the “to be scanned” folder are scanned using our new Epsom whiz-bang printer which is wireless and connects to our Google Drive. The data is scanned straight to a special folder in Google Drive. From there, it’s just a matter of allocating the files to either the “to be paid” folder or the “to be entered to Saasu” folder.
Any bills/docs received via email as PDF’s are saved directly into the Google Drive tax folder and the emails subsequently deleted.
Any bills needing to be paid and/or entered into Saasu (our chosen cloud accounting software) are dealt with as needed. Once they are processed, they are then filed into the required expense category folder with the “2013-14 FY” folder.
Our experience of going paperless so far…..
Well, in short, it works! The trick is to make sure the above system is done each week. Leaving it until there are loads of docs to scan and/or enter into Saasu would be problematic and painful. The only thing that we found difficult at the start was throwing out original copies of bills once they are scanned. Our inherent need to file away paper caused us some anxiety when it came to actually dispose of the paper bills/receipts – we really did find this difficult weird as this may sound! Now we do it without batting an eyelid – anxiety gone! We are trying to be as “green” as possible and we use old bills for scrap paper (yes scrap paper is still useful!) and pop others into the paper recycling bin. Our next step in the process will be to buy a shredder for shredding sensitive paper documents. My daughter tells me that she can use the shredded waste as a base in her bird’s cage which is good recycling in my book!
Since writing this blog and trialling the paperless system described above (so, 3 months ago), I would like to report that it really does work! Anyone thinking about doing this should absolutely get on board! There is definitely much less paper and much less time spent filing it (or trying to find places to put it). The best part of going paperless for me has been the search functionality. There have been at least 2 instances where I needed to find invoices fast and just by typing a few keywords in the search box in Google Drive, I was able to find the documents within seconds – brilliant! I have also purchased the shredder I spoke of above from Dick Smith – a great addition to the paperless system – it also shreds old credit cards and CDs/DVD’s – very useful!
What would I change?
Well, actually not that much! The only thing I think needs to be changed is the way I’m recording the date on each file. At the moment I save each document as e.g. 27.01.14_name of file_$amount paid. This is okay except that when I look at a long list of documents saved in this way, I cannot easily sight a particular document by date quickly – quite a bit of eye scanning is required. So I’ve decided that I’ll keep on using my current format until the end of the financial year and then after that, I’ll start using this format which should eliminate the above issues e.g. 2014.01.27_name of file_$amount paid. With just one change of how I record the date, I should be able to easily sort and find documents quickly – well more quickly than I can now 🙂 If I think of any other changes I can make to enhance the paperless office experience, I’ll be sure to let you know with further updates on this blog. Bye for now!
The other day I visited a client who told me about Load & Go Visa Cards. He was looking for a way to better handle giving petty cash to employees for minor business-related purchases. It wasn’t that he didn’t trust his employees with the cash, it was more that the physical handling and recording of cash purchases was becoming difficult to maintain and as a result, some purchases were not being recorded at all. My client wanted a more efficient system for petty cash purchases and after some research came across Load & Go Visa Cards from Australia Post. These are rechargeable pre-paid Visa cards to which you add your own funds up to the value of $999.00.
There’s a big push at the moment to outsource every task in your business that you don’t want to do. While this concept has merit, there is one business task that you probably shouldn’t outsource, your bookkeeping.
The end of the financial year (EOFY) is a busy time for business owners. There are many things to finalise and prepare. To ensure your business is ready for the EOFY, we have prepared answers to 9 questions small business owners may have about the EOFY. We cover things like small business expense deductions, record-keeping, documents you need to prepare for your accountant and much more.
We have created a PDF fact sheet for you to download. Here it is, enjoy!
Okay so you run a small business and things are super busy! You’ve got lots to organise – employees, clients, projects, supplies, website, marketing and dare I say it, yes, the bookkeeping and tax compliance tasks! Some business owners prepare their own books but many are outsourcing the task to professional bookkeepers instead. Some prefer to employ an onsite bookkeeper but others have chosen to use the services of virtual bookkeepers. They have done this for various reasons, the main ones being:
As small business owners, they are probably operating a home-based business and do not want someone regularly coming into their home/family space.
They operate from a formal office which does not have the space for another worker, desk and equipment etc. or
Their business is primarily mobile and as such, they don’t really utilise a physical office.
So just what is a virtual bookkeeper and how does virtual bookkeeping work? What are the pitfalls or cons or virtual bookkeeping? Today we answer these questions and more……..
A virtual bookkeeper is someone who works remotely, utilising current technologies and the internet to complete bookkeeping and other tasks for his clients. Virtual bookkeeping is not location-dependent. A virtual bookkeeper can offer services to clients Australia-wide (or perhaps worldwide), without leaving his office. The internet, current technologies and cloud services all make this possible. At e-BAS Accounts, while we do have some local clients whom we see in person, we are essentially virtual bookkeepers and maintain clientele in several Australian states even though we are Victorian-based. To ensure the virtual relationship runs smoothly, we use a system which we will share with you today. Here is a summary of how our virtual bookkeeping system works. If you would like to read the extended version, head here.
Done well, the virtual bookkeeping relationship can be very beneficial for both the bookkeeper and the business owner. Done poorly, the virtual relationship will fall over leaving all concerned a little worse for wear. So are there any pitfalls to virtual bookkeeping? Unfortunately yes, as with any system, things can go wrong. Here is our list of common pitfalls:
Many SMEs are outsourcing their bookkeeping and BAS tasks to professional bookkeepers. This frees them up to get on with running their businesses and gives them peace of mind that their bookkeeping is correct and compliant. It’s a great thing to do especially if you loathe bookkeeping! While some SMEs prefer to employ an on-site bookkeeper, many are turning to virtual bookkeepers for assistance. So just what is a virtual bookkeeper and how do you work with one?
What’s a Virtual Bookkeeper?
A virtual bookkeeper is someone who works remotely, utilising current technologies and the internet to complete bookkeeping and other tasks for his clients. Virtual bookkeeping is not location-dependent. A virtual bookkeeper can offer services to clients Australia-wide (or perhaps worldwide), without leaving his office. The internet, current technologies, and cloud services all make this possible.
How to Work with a Virtual Bookkeeper
Some business owners are hesitant to use a virtual bookkeeper because they just don’t understand how the whole process works. They can’t get their heads around using a bookkeeper who lives in another town or state for their bookkeeping needs. So just how does this virtual thing work? For the virtual relationship to be successful and beneficial, the virtual bookkeeper must have a proven system in place which nurtures this success. Here is the virtual bookkeeping system we use at e-BAS Accounts:
1. First Consultation
After the initial contact with a new client, an appointment is set for the first consultation. This meeting can be held via telephone, Zoom, Google Meet, and other video conferencing apps e.g. Any Meeting. At this meeting, the client’s bookkeeping assignment is discussed in-depth and created.
2. Legal Stuff
A client and confidentiality agreement is drafted and sent to the client via email, mail, or fax for signing. Once the agreement is signed, the bookkeeping can begin! Some practices call this an engagement letter.
3. Accounting Software
Clients can choose between desktop-based platforms like MYOB or QuickBooks and cloud-based software like Xero, Saasu, or MYOB Live Accounts. Desktop data files can be emailed (file size dependent), shared via Dropbox, uploaded to our secure online storage facility, and/or sent via mail on a USB drive or CD format. Cloud-based software files are shared with us via an invitation that the client sends to us to become a user of their file online.
4. How Clients Send us Source Documents
Firstly, we send our clients a checklist to help them prepare their source documents for us. We list all data required and provide guidance on how to organise this data before sending it. Clients use various methods to send their bookkeeping documents to us! These include:
Our free secure online transfer system via our website. Clients are provided with login details and can upload/download their files to us anytime. This of course means that some data needs to be scanned first by the client in order to create files for upload. Many new printers/scanners can scan documents quickly and in bulk and we recommend that our clients purchase one of these machines in order to do their scanning. If clients don't want to do this then we also recommend that they use Shoe-boxed, an online scanning service. Files created by Shoe-boxed also have the added advantage of being able to sync across to online accounting platforms like Xero and Saasu which is a great time-saver!
Adding their documents to Dropbox. Dropbox is an online storage facility that users can share with others as required. Clients simply share their accounts folders with us and we can access the information from the Dropbox account on our computers. Another online sharing service is Box - this is an alternative to Dropbox but works in a similar fashion. Google has announced their file storage offering called Google Drive which works in a similar fashion to Dropbox - another option!
Posting their documents to us via Australia Post's Express Post. Some clients also choose a courier service to send documents if they have lots of documents. Some client simply fax their data across to us although this becoming less common.
Emailing data. (Some files are too large to be emailed so other methods such as those mentioned above are used instead).
5. The Bookkeeping Stage
Once we receive the client’s documents, we get to work! We will process the data into the client’s chosen accounting software whether this is cloud-based or desktop-based. Clients are kept up to date with the progress of their bookkeeping assignments on a regular basis via email and/or telephone.
6. The Reporting Stage
Once all bookkeeping is complete, we process various financial reports for the client. We then send these reports via email or share them via the client’s chosen method e.g. Dropbox.
7. Monthly Meetings
Every client is required to attend a monthly meeting at which the previous month’s bookkeeping is discussed. This is compulsory as communication is the key to a successful virtual bookkeeping relationship. Because we do not see or visit our clients regularly (sometimes never!) in person, it is possible for the virtual relationship to fall over – “out of sight, out of mind” as the saying goes. Not only are these meetings necessary to ensure that nothing is forgotten or misinterpreted in relation to a client’s accounts, but they also ensure there is a personal level of contact maintained between the bookkeeper and client, something that no amount of emailing and texting can accomplish!
8. Returning Data to Clients
Data that is posted to us is posted back to clients at no cost to them. Data that is shared with us via Dropbox (or another sharing app) is retained in the shared folder at the discretion of the client and data which has been uploaded to our secure online storage facility remains in the client’s account until such time as the client may wish to terminate the bookkeeping agreement.
So that’s how we make virtual bookkeeping work at e-BAS Accounts! Does this work 100% of the time? No of course not! Things do go wrong but most of the time this system is fail-safe. It allows us to operate a successful virtual bookkeeping business that is not location-dependent all from the comfort of our lovely seaside office here in Torquay, Victoria! Perfect!
In business cash flow is number one. Without it even the most successful business can slowly go under. Integral to maintaining good cash flow is ensuring that debtors pay their accounts in a timely manner. This can be easier said than done and sometimes things just don’t go to plan. Debtors don’t always pay their accounts on your terms for one reason or another.
What’s a Virtual Bookkeeper?