Bookkeeping. An often overlooked area in the business- and yet, it can dramatically affect the success or failure of the organization. Most business owners tend to back burner the accounting in lieu of the “here and now” items - such as sales, marketing, meetings, etc… and because of procrastination or lack of insight, some organizations suffer because of those mis-managed books.
The Effects of Bad Bookkeeping
We’re seeing this come up in the media all the time now- horror stories of how businesses were subject to an internal hire committing fraud, or how a company went bankrupt after discovering their finances were a complete disaster after years of compiled errors. Take this article by the New York Times for example. It was reported that Philadelphia’s government had the "worst accounting practices among the nation’s 10 largest cities, with $924 million in bookkeeping errors alone last year”. The article goes on to discuss how this was the outcome of issues surrounding their internal controls, and that there is still "$28 million unaccounted for”.
How Automation Will Change Accounting
Clearly there were a ton of issues that went unattended for far too long, but no one wants their business to fall victim to circumstances like these. Sloppy bookkeeping can result in an audit, halt of processes, bankruptcy, and the company folding altogether. So how do you continue to run your business, as well as worry about the nuances of bookkeeping and accounting? There are a couple of options.
Make and internal hire—This isn’t a role to take lightly. Bringing on a competent bookkeeper requires a thorough screening, interviewing process, and some level of management. Being the most traditional approach, some companies have part time or full time bookkeepers being managed by the business owner directly, or another team member such as a Controller. Keep in mind- for every internal hire, there are associated costs and risks. Don’t forget to factor in overhead such as benefits, insurance, sick time, taxes, etc… Remember- this person/department is fully managing the money in your business- so be sure it’s the right fit! And always have a backup plan for turnover!
Hand everything over to your CPA—A Certified Public Accountant (CPA) provides guidance on accounting principles, the tax effect of business transactions, provide formal or informal auditing services and are a second set of eyes to ensure all bookkeeping has been done properly. They typically also handle your end of year filings. Chances are, you’re already working with a great CPA, so they’re a trusted partner. Some CPA’s will be willing to manage the books for your business, but most prefer to focus on the more advanced accounting. The benefit of separating the two responsibilities includes eliminating any conflicts of interest, getting a higher level of service from each party, as well as keeping everything cost effective. Most CPA’s have a substantially hire hourly rate than standard bookkeeping providers.
Outsource—Outsourcing accounting or bookkeeping means you can allocate more resources to the tasks that add value to your core competency as a business. You are also able to get more experienced guidance. Outsourced accounting firms/ bookkeeping firms can’t call in sick, or just stop showing up one day. Not to mention, there is no longer a need to consider vacation days or payroll taxes. Some of the more “old-school" outsourced firms are compiled of a team of bookkeepers working remotely, which can inhibit your ability to communicate with and control someone outside your company- and you may feel like you’re losing oversight of business spending and activities without having the ability to stay “plugged in”
Botkeeping℠—This is a relatively new practice, which combines the best overall options for today’s business owner. Botkeeping by definition is the use of machine learning, AI, and robotic process automation to perform bookkeeping and accounting tasks automatically. At Botkeeper, our clients get the best of all worlds- an outsourced model, which allows for them to have 360 degree visibility into their finances 24 hours per day, while keeping overhead costs low- on average reducing the accounting spend by 30-50%. The botkeeping model allows for the technology to do the basic work- while the Senior Accountants oversee and provide their expertise as needed. The bottom line? While no one is predicting things will change overnight, automation will continue to make a lot of tedious workplace tasks much simpler. Filing taxes, investing, gathering data, and generating reports in a business context will be much, much easier.
How Botkeeping℠ Sets You Up for Success
The importance of making the right bookkeeping decision for your business should not be underestimated. Aside from the obvious benefits of taking the "Botkeeping" route, there are additional perks as well- like not having to abandon your existing accounting software! Botkeeper can integrate directly with your Quickbooks Online, Xero, or other accounting platforms. You’ll save time, minimize risk, reduce costs, and gain a valuable partnership that supports your passion for growth. Make sure your business will never fall victim to sloppy bookkeeping!
Are you ready to learn more about how to keep yourself plugged into your company’s finances?