We talk a lot about the importance of having solid accounting processes and procedures in place to govern your bookkeeping. We discuss how bookkeepers, controllers and CFOs can be strategically aligned to produce advanced insights into even the most complex accounting structures. But we don’t often spend a lot of time on the downsides in the accounting department—partly because the topic is often pretty negative in the grand scheme of things. After all, the vast majority of our clients end up coming to us only after experiencing some of the worst problems in accounting and bookkeeping.
While there may be something to be said for experiencing “the bad” in order to fully appreciate “the good”, we would always prefer our clients avoid hardship if possible! So we compiled that many varied reasons that clients have sought our services in the past so that you can learn from their previous mistakes and problems—and hopefully avoid them in your own business.
Lack of bookkeeping processes & procedures
This is a classic and the most common among our prospective clients. It is not easy to setup and maintain a comprehensive list of all the bookkeeping tasks, accounting processes and administrative procedures required to ensure your bookkeeping runs smoothly and on time. After all, we have a 10-person team solely dedicated to this job when onboarding a new client—trying to do this with limited staff lacking experience in process management is likely going to be nearly impossible.
Wondering if a lack of bookkeeping processes is your problem? If you answer “Yes” to one or more of the following questions, it may very well be.
- Your books are not closed on time or on the same day each month
- If the bookkeeper quit, no one would know how to pick up where he or she left off
- Your accounting staff is manually managing data in multiple systems without integrations or synchronization
Inaccurate or late financial reporting
Stop us if you’ve heard this before “Well, this report isn’t entirely accurate because we don’t really know if …” Yes, we have heard that one too—from many of our clients who are never quite sure that even their balance sheet is correct—and that’s after they deal with whether or not they’re receiving it on a regular and timely basis. This may be your problem if any of the help describe you:
- You don’t know your exact profit margin
- You have not been able to implement job costing or department tracking no matter how hard you try
- There is a lot of red on your P&L
Inability to forecast or budget
Cash flow forecasting? Well, maybe you know what is in your bank account today. As for the rest, many of our clients have no idea what their 12 month forecast really looks like when they first grace our virtual doorstep. This might be your problem if any of the following sound like your company:
- Your AR Aging Report is non-existent or updated
- Bill payment is happening offline and without oversight
- You cannot reasonably predict your expected future sales due to lack of clarity in revenue data
Poor or non-existent accounting technology integrations
Every business owner we know dreams of perfectly synced systems and beautiful data flowing from one area to another. In reality, it usually looks like a post-apocalyptic nightmare when trying to run reports using data from more than one system. How do you know if this is your problem? Simple:
- You know your program is capable of a feature you need but no one has been able to get it to work
- You use Excel for the bulk of your accounting management
- Your company tracks time and expenses on paper
- You have problems in time tracking, job costing, expense management or payroll (to name a few)
Personnel churn, lack of internal expertise and even theft
This is the hardest culprit to admit and the most important to rectify. Your accounting data is only as good as the people touching it. From losing your bookkeeper to an inability to scale advanced bookkeeping skills to outright theft, the personnel problem is the worst offender of bad bookkeeping problems. You can tell if you have personnel issues if:
- Your bookkeeper was once an internal admin promoted to bookkeeper or given bookkeeping tasks without proper training and oversight
- You aren’t getting reports you request because there is a communication breakdown (i.e., your bookkeeper doesn’t understand what you’re asking for)
- You get data, not insights, when you ask for basic reports
- You cannot account for certain expenses and transactions appearing in your records
If you recognized one or more areas as potential problems in your company's bookkeeping, we are here to help. Request a services consultation to review your current issues and how AccountingDepartment.com has helped clients like you.