Your small business is thriving; you’re growing rapidly, your profits are on an upswing, and you’re starting to get a handle on inventory, payables, and receivables. Your customers are happy and the potential for scalability seems good.

In the back office, you’ve decided that you have enough volume to hire a part-time in house bookkeeper to ensure all your transactions are properly recorded and all your financial reports are prepared accurately and on a timely basis.

So is your bookkeeping all taken care of? Be careful. An in-house bookkeeper is an important step to ensuring your business is healthy from a recordkeeping perspective. But it’s not the only step. For instance, does your bookkeeper know everything he or she needs to know to ensure all transactions are properly categorized?

If you’re not answering a lot of questions from your bookkeeper, you should probably have a level of concern. If you are answering a lot of questions from your bookkeeper, you’re probably not spending your time as productively as you could be.

So what now? If hiring a bookkeeper isn’t enough to “check the box” on financial recording and reporting, what is?

Those unwanted “uncategorized” transactions

Business transactions, by their very nature, can be surprisingly ambiguous. Often, a book entry will go “uncategorized” because a bookkeeper can’t determine, from the receipt or other records, how to categorize that transaction. A good bookkeeper will keep track of these uncategorized transactions and not let them accumulate, but rather ask for the details so that they can be booked properly on a timely basis. If this is not done and the uncategorized transactions accumulate over time, this will result in inaccurate financial statements and cause problems cash flow forecasting, because it’s tough to predict spending needs if it’s not clear what the company resources are being spent on.

But even the best bookkeepers can let the uncategorized transactions pile up because they hit roadblocks in tracking down the information they need or can’t get their questions answered. It would be annoying for any business owner to be fielding a phone call—while at a sales call appointment —from the bookkeeper asking about a $400 expenditure that there would be very little hope of instant recall as to the nature of that expense because it was made 3 months ago.

Those complex transactions

Some transactions are simple to decipher and enter. Some, just are not. There are transactions that have moving parts and might involve different departments of your company accompanied by timing issues that simply are just confusing to someone with bookkeeping knowledge. It is more the case than not that any small business owner will not know how to guide the bookkeeper for proper recording and tracking of these complex transactions. And, what if you don’t have an “on call” arrangement with your CPA firm or they are simply not interested in fielding questions from a bookkeeper? Where does that leave your bookkeeper’s work? Inaccurate and incomplete.

Time to get some oversight

Resolution Accounting has staff accountants with accounting degrees who know the answers to questions any bookkeeper would be asking. With our oversight services, we can help your bookkeeper understand how to record the complex transactions. We can assist in developing protocols for proper recording of transactions that will eliminate the pile up of those unwanted uncategorized transactions. This will keep the calls you have to field to a minimum. We add to your peace of mind by ensuring that timely and accurate financials can be produced.

You’re going to have questions in making decisions as your business grows

Part of having a healthy financial back office is getting answers to the questions you have as the owner, be they about items on the balance sheet, profit and loss statement, or future cash flow. For instance questions like ‘Can I afford a new piece of equipment now that will increase productivity, or will that put too much of a strain on our cash flow? If so, when will our cash flow support this level of capital expenditure?”

Your bookkeeper is probably not going to be able to answer that question. And frankly, there’s no reason why he or she should be able to. That’s not what you hired a bookkeeper for and in general these higher level financial scenarios are outside of the skill set of a bookkeeper. However, if you have a firm providing experienced personnel for your accounting oversight services, the answers to these questions are well within their level of expertise.

Again, hiring a bookkeeper is an important step toward the financial health of your back office. But consider broadening the scope where that back office becomes a resource that helps you in growing the business to achieve greater profits and give you more peace of mind.

It’s time to call Resolution Accounting today

Remember, every small business needs a bookkeeper. Don’t fall into the “Founder’s Trap” and try to do everything yourself (unless you have an accounting degree). And even once you hire a full- or part-time bookkeeper, consider working with a firm like Resolution Accounting to help oversee and supervise your bookkeeping department—which will increase your reporting accuracy and your peace of mind.

Serving the entire Philadelphia region, including King of Prussia, Exton, the Main Line, Malvern, Chester County, Montgomery County, West Chester, Conshohocken, and more, Resolution Accounting offers Philadelphia-area small businesses accounting oversight services, as well as bookkeeping services, and the cost might be much less than you think.

Find out why businesses and individuals highly recommend Resolution Accounting by contacting us.