5 Easy Tricks to Reduce Your Bookkeeping Costs
by crystal wilson
Cutting down on costs is a simple way to improve your cash flow and profitability. Here are 5 easy ways to save some green on bookkeeping costs - because why pay more than you need to to find out how much money you have?
1. Unfold your receipts! And make sure they are actually receipts
Okay, so you’re out running errands and making purchases. You are a very responsible business owner, so you are carefully ensuring that all of your receipts are stored safely in your wallet so that you can easily put them in your bookkeeping file when you get back to the office (see #5). Receipts are too long for your wallet, so of course you are folding (or crumpling - I see you!) them to fit. And when your phone bill gets mailed to you (yes, this is still a thing!) it is folded to fit in its envelope.
You could very easily grab your fistful of folded/crumpled receipts, and your folded over invoices (which you have probably placed back in the envelope for tidiness’ sake) and place them in your bookkeeping file folder. Doing this is definitely holding up your end of the bookkeeper/business owner deal - you are providing all of your documentation in one neat and tidy package. This is great!
With one simple adjustment though, you could shave some dollars off of your bookkeeping bill. In order to get the necessary information from these receipt and invoices, they need to be unfolded. There’s no way around it. So, you can pay your bookkeeper their hourly rate to carefully unfold each of your papers, OR you can do it as you place them in the file folder. It’s a time vs money equation, so it’s important to decide which is currently the highest priority, but make sure you are actively choosing your action.
While we’re on the topic of receipts and invoices - your bookkeeper only needs these documents. They do not need packing slips, or shipping labels. Sorting and separating these items from the proper bookkeeping documents also saves time from your bill. You can pay your bookkeeper to pull these out and put them in the recycling bin / shred box OR you can streamline your office process to make sure they never find their way into the bookkeeping file.
2. Consolidate your bank accounts wherever possible
The more bank accounts you have, the more reconciliations need to happen, and the more places a bookkeeper has to spend time looking for transactions that are in question. If you have bank accounts that you no longer use, take a few minutes to chat with your bank and close them. If you have multiple bank accounts for your business consider how you might reduce that number and still achieve the goals you were trying to meet with that banking setup. Talking with your bookkeeper about good ways to do this is a one time expenditure that would save a great deal of time and money moving forward. Another awesome side effect - fewer bank fees! Woohoo!
3. Separate business and personal transactions - and if you mix them up make a note of it.
Keep your personal bank accounts and credit cards completely separate from your business bank accounts and credit cards. I know this seems like a retraction of the last point but it’s the only acceptable exception. Keeping everything seperate, no matter how “small” your business is, is way easier and will save you a significant amount of time and money.
If you accidentally grab the wrong card - like I did last week - just make sure you note it, transfer to correct the mistake, and use my receipt notes as a guide for getting the necessary details to your bookkeeper! Make sure the receipts (not folded!) accompany the statements with corresponding notes.
4. Make Notes
We subscribe to the “He/She who makes the most notes wins” school of thought - and if you join us in that thinking, you will be able to cut a portion of your bookkeeping fees out. A great deal of the time that goes into regular bookkeeping tasks involves chasing down information, asking questions, and getting clarity. Making notes for each receipt, e-transfer, etc will not only save you money, but will also mean you are interrupted fewer times throughout the month to answer important bookkeeping questions. Note things like, what the expense was for, who sent you money and why, what client an expense should be attributed to, etc…
5. Prepare documentation (invoices, receipts etc.) as you receive it, and provide it to your bookkeeper at regular intervals
Very few people enjoy hurrying to gather wayward papers that are necessary to prepare for a looming deadline. Very few people get stressed out at the prospect of reaching for a conveniently located file folder that they know contains all of that information. Develop a system that sees all invoices, receipts, payment slips, tax documents etc… collected consistently in one safe and tidy place (you probably need one physical and one electronic version of this place). Work with your bookkeeper to identify the ideal intervals for the transfer of documents. This allows your bookkeeper to plan their time out well to work on your file, and it allows you the freedom of knowing when your file is being worked on and when you can expect to know the outcomes or receive your desired reports. Having a reliable system means that fewer dollars are spent adding in data that was missed/forgotten previously, double checking for “missing” paperwork, etc. Fewer hours = fewer dollars. Win!
I know none of these tips really sounds like a great time. But, once you get into the habit of following these routines it will actual reduce the time both you and your bookkeeper spend on your file. That means you earn more time AND a lower bill. And THAT sounds like the beginning of a REALLY great time!