What Your Bookkeeper and Financial Partner Wants You to Know
December 12, 2023
by Shannon Simmons

Managing finances can be as challenging as it is critical, especially in a boutique wellness business. At Fit For Profit, we understand that while you’re dedicated to promoting health and wellness, keeping your business financially healthy is equally important.

And whether we’re working together as your financial partner or you’re working with another bookkeeping company (or just thinking about it), it’s important to know a few things about what it looks like to work with a bookkeeper and financial partner. Here are just a few examples:

The Crucial Role of Timely Communication

Issue: Regular and timely communication with your financial partner is essential. We often find that during busy periods, such as tax season or holidays, responses to emails, including crucial information requests, are delayed. This can lead to significant issues in managing your finances effectively. That means that when you log into QuickBooks to look at your accounts or evaluate your expenses, what you see might not be an accurate reflection of where you are.

Example: We noticed that a client’s management software was recording more sales than what was reflected in their bank account. We reached out to the client, who didn’t respond to our emails for weeks. This led to a $50,000 discrepancy in their bank account, making it really challenging (re: impossible) to balance their books. Thankfully, the client finally reached out and found the “missing” funds. Clearly this is a case where better communication could have prevented unnecessary stress and confusion, on both sides.

Solution: Keep an eye on messages from your financial partner and prioritize responding quickly. Your bookkeeper will reach out to you if they have questions about a transaction or need a password update for logging in. There’s zero judgment; they’re just trying to do their job so you can focus on what you do best!

The Importance of Updating Financial Information

Issue: When you open new accounts, take out loans, or make significant financial decisions, it’s vital to inform your financial partner and bookkeeper promptly. Delaying this can lead to inaccuracies in your financial records, affecting your business’s financial health. We only know what’s in your bank account and what you tell us. The longer it takes for your bookkeeper to be made aware of these things, the longer your books won’t be balanced properly.

Example: A client of ours opened a new credit card for business expenses but didn’t inform us for several months. When we finally updated their books, we found several discrepancies, leading to a rushed and stressful period of reconciliation and many months of incomplete reports for her. This situation could have been easily avoided had we known right when the new card was opened.

Solution: Your bookkeeper’s role is to keep your books up-to-date. When there’s a change in your financial situation, no matter how minor it may seem, they need to know about it. Again, no judgment; just your bookkeeper trying to do their job and keep your books straight.

Understanding the Scope and Limitations of Bookkeeping

Issue: Bookkeepers can manage and organize financial records instantly, even if provided with information at the last minute. This is far from the truth. We block off the first two weeks of every month to reconcile client accounts and often reach out when we have questions about specific transactions (going back to the first point about communication).

Example: We’ve had a client bring us what amounted to a shoebox full of receipts and a stack of bank statements, just a week before the tax filing deadline. Most bookkeepers would have said that the turnaround time was impossible; we were able to get it done to the best of our ability but the limited time frame put pressure on our resources. (Because, let’s face it, a year’s worth of bookkeeping shouldn’t have to happen in a week!) This is incredibly stressful for business owners and requires filing a tax extension.

Solution: Your bookkeeper has a set number of hours set aside each month to work on your books. If they don’t have the information they need to do their work, then they have twice as much work to do next month. And while any good bookkeeper will get your books updated, it will take some time, and many won’t be able to do the work fast enough. Especially if they’re doing multiple months of work. Your bookkeeper will let you know of any deadlines and let you know if an extension is needed.

The Need for Proactive Financial Engagement

Issue: Active engagement in your financial processes is key to uncovering growth and savings opportunities. However, many business owners tend to take a backseat, missing out on these potential benefits.

Example: We worked with a coaching business whose owner rarely reviewed their monthly financial statements, despite repeated meeting requests from us. After encouraging them to take a more active role, they began identifying areas of unnecessary spending. This proactive approach led to a significant improvement in their profit margins and overall financial health.

Solution: It’s every business owner’s responsibility to be aware of their business’s financial standing. That’s why we meet with our clients quarterly or monthly (depending on their agreement with us) to review their P&Ls and Balance Sheets. Be sure to book your call and ask questions when you meet with your profit coach.

Understanding and actively participating in financial management is essential. It’s not just about leaving it all to your bookkeeper; it’s about partnering with them.

Regular communication, timely updates, realistic expectations, and proactive engagement are the pillars of this partnership. By embracing these practices, you’ll not only steer clear of common financial pitfalls but also set your business on a path to greater profitability and success.

Remember, just as you guide your clients towards better health, your financial partner and profit coach guides you towards better financial wellness.