January 29, 2019
You know you have to review your books, it’s an important part of owning a business. But you also know you need to drink plenty of water, move your body and clean your home and that doesn’t necessarily happen as often as it should either. We don’t always do the things we need to do, even when we have the best of intentions (trust me, I’m right there with you). I know you are busy running your business and life, so how often do you really need to review your books? The answer, it depends.
Some businesses deal in fewer, but larger transactions. Some have a high volume of smaller transactions. The number of transactions coming into your business each day will determine how often you need to get in there and deal with your books. Do you have a ton of transactions each day? Then get in there daily and make some progress, even if it’s only 20 minutes a day. Your bank account a little less busy on a daily basis? Make a point to jump into your books once a week and get caught up. I find that this is a perfect Friday afternoon wrap up to the work week.
If cash is a bit tight in your business I recommend you pop into your books daily. You need to know exactly where every dollar is going as it’s leaving. This helps you make timely decisions about your business. Maybe you realize you need to cancel that software that you hardly ever use, or maybe you notice that you’re collecting the most money from one particular service right now and you can double down on selling that one. If on the other hand, you’re in a steady cash position you can look at your books once a week and be fine.
(NOTE: Not sure how to keep up with your bookkeeping? Download the Ultimate Checklist to Keep Your Bookkeeping Simple now and finally get caught up)
Please, for the love of all the spreadsheets, do not look at your books less than once a month. That’s 12 times a year, no matter how busy you are you can handle that, I mean seriously. If you review your books less than once a month you’re missing out on on-the-ground information about how your business is doing. You don’t know where your money is coming from or where it is going in real time. There's no way to make financial decisions based on real-time data if you’re always working in the past.
Keep up with your books frequently enough that the thought of having to catch up doesn’t scare you. Does catching up on your books once a month leave you dreading the amount of work it’ll take? Then look at it more often. If once a week keeps the amount of work in check then perfect! Maybe every two weeks keeps the dread in check, go with that. Jump in enough that the task doesn’t become overwhelming and stressful.
Hoping into your books at any frequency leave you drowning in dread? Sounds like the perfect task to hand off to nerd who loves it!
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