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There are certain tasks that as a business owner, you should delegate. Bookwork is one of them – I highly recommend that you have a bookkeeper to take care of your bookwork. This could include:

• Processing of invoices for both suppliers and customers
• Processing of payments for both suppliers and customers
• Processing of payroll
• Reconciliations
• Reporting

Does this absolve you of looking at your financials? Absolutely not! A mentor of mine said, “You can’t expect an outstanding job if you’re not willing to inspect”. So what should you actually check and what skills do you need to perform checks properly?

You should at least understand how to get reports out of your accounting system. Your bookkeeper should be able to show you how to do this.

You should check the following reports:

• Aged payables report (this will show you the suppliers outstanding)
• Aged receivables report (this will show you the clients who owe you money)
• A bank/credit card reconciliation report that will show all reconciled transactions that have appeared in your bank/credit card account
• A Profit and Loss report
• A Balance sheet report

So, do you need to know how to read them? Yes, unfortunately there is no easy way around this. You do need to learn how to analyse these reports for yourself. You are in business and you should not have your head in the dark about how your business is performing financially. It can all turn to sludge very quickly – some industries quicker than others. You can get yourself into debt before you know it, if you don’t pay attention.

Some of you might be saying that you didn’t “get into” business, you just “fell into it”. You just want to do your thing, not this “business of business”. I understand, because I see it all the time. If that’s the case, you need to make sure that you surround yourself with knowledgeable and trustworthy people who can help you. Why do I say “trustworthy”? Simple, if you take your eye off the ball for just a moment, a less than trustworthy individual has enough smarts to be able to fleece you. Blind trust is not an option when you are dealing with individuals. Select your team members carefully – you need to see them as an integral part of your team.

This brings me to the next step. Always pay your own bills (I know it’s a chore, I dislike it myself) unless you have the utmost faith in your designated person. Ideally the person has been working with you for some time and you have completed reference checks. You can set up your bank account so that there is a “two person” authorisation. Your bookkeeper can create the payment and then the final check and “send” can be processed by you.

As your business grows, you need to broaden your checking procedure to make sure everything is above board.

A good idea is to segregate your financial tasks amongst your team members. One person enters information, another processes payments and another reconciles the accounts. This ensures that everyone is checking in with each other.

Always remember that your business is YOUR responsibility, not your bookkeeper’s, not your accountant’s, yours. Of course, they can guide you and educate you but the buck stops with you.

What if you have an assistant either virtually or in person? How do you manage to assign tasks that relate to purchasing goods and still keep a close eye on what’s happening?

The answer is credit cards, particularly in their name on your credit card account. Ideally each card transaction is shown separately, allowing you to keep tabs on purchases being made. If you’re not comfortable with this arrangement, you could have your assistant make payments and submit expense reimbursement forms. Not all assistants are financially viable enough to allow for this arrangement so that too can determine the method used.

In summary, you do not need to know how to do everything, but you need to know enough so that you can “inspect” what is being done and know where your business is at. Don’t delegate and think you can forget about it, you need to check your results. So, as well as the saying, “Always be marketing”, I have another – “Always be checking”!

There are many things you should plan, but what should you plan for your business? Planning comes in many forms, and combined can provide you with a blueprint to keep your business moving forward.

I consider there to be a few areas within your business that can benefit greatly from planning including a financial plan, marketing plan and a resources plan.

Before you start creating these plans, whether you’re a new business or existing, it pays to revisit your vision, mission and values for your business. These can sometimes be tricky to define. My mentor gave the simplest definition I have ever come across:

• Vision - what are you and what are you becoming?
• Mission – what do you do? What business are you in?
• Values - what words encompass your business values?

If you haven’t worked this out yet, it can take time and a few attempts. Sometimes your business evolves in a different direction and when revisiting these, you find that they are not congruent with where you’re at now.

Therefore it’s a good idea to revisit your vision, mission and values at least once a year.

There are many and varied techniques for goal setting and planning for a new year. Let’s look at a few of my favourites:

The first method (I learnt this from Chris Brogan (http://www NULL.chrisbrogan NULL.com/)) relates to selecting three keywords that encompass what you want to achieve for the year. You then take your three words and map out how they can be achieved including strategies to achieve them, any distractions that may impede you, the projects to achieve the strategies, what the achieved goal (or partially achieved goal) looks like and the next step required to continue on the goals path. You can read more about this here (http://www NULL.chrisbrogan NULL.com/wiring-yourself-for-success).

The second method involves a one page document which includes summaries of your goals. You put this single page somewhere so you can see it every day, to make sure you are working on tasks that relate to achieving your goals. This will ensure you aren’t getting distracted and working on non-goal related items.

New opportunities can arise that perhaps don’t fit within your existing goals (otherwise known as bright shiny objects!) but could be awesome opportunities. So how do you determine whether they should be pursued?

Simply refer back to your mission and vision. Is the opportunity in line with these? Just by looking at this can take the shininess off an opportunity and put it back into perspective.

Once you have determined your three keywords or goals, what else needs to tie in with these?

A financial plan can entail:

• Budgets
• Forecast
• Cashflow forecasts

Depending on your needs (and what you’re actually going to use) will determine which reports you require. All of these reports can assist you in maintaining your goals and keeping yourself on track. You’ll also discover what other requirements you may need to achieve them.

A marketing plan can entail:

• Your target market
• Marketing strategies
• Marketing tools to utilise
• Marketing calendar to map out all promotions etc

A resources plan can entail:

• Business organisational chart (even if it’s just you in most positions)
• Resources required based on marketing plan
• Resources required to achieve your goals
• Resources calendar to map out when resources are required

Once you have these plans in place, you can map out the tasks that would be required on a monthly, weekly and daily basis. Your calendars will help to focus you on deadlines to achieve tasks by. If you start monthly and then break it down to weekly and then daily tasks, not only will your goals feel more achievable but you’ll actually be making daily progress. This will give you a big buzz enabling you to maintain your focus and momentum.

All three of the plans above require greater explanation. I will explain these in greater detail in further newsletters!

So start today, start planning, it can take some time if you really do get into the nitty gritty but if it gives you a year’s worth of focus, wouldn’t it be worth it?

In a separate article on planning, I considered the three areas that benefit greatly from planning and thus review:

• Financial
• Marketing
• Resources

There’s no point spending time creating plans for these areas of your business if you’re not going to review their status. This is your reminder to review, but where to start?

Start with your goals. What were your goals? How are they tracking? Perhaps you wanted to attract four new clients per month, launch a new product line or increase your average daily sale by $X amount. Whatever the goal, it must be tracked so that you can see its impact on the financials. Let’s take each of the theoretical goals just mentioned and discuss them further:

Goal to attract new clients

Goal = 4 new clients per month
Actual = 2 new clients per month

If you have a look at your sales revenue you should probably see an increase. If it is static or has reduced, there may be other contributing factors such as reduced fees, other clients lost or maybe an invoice has yet to be generated. Now if you hadn’t measured your goal and thus looked at the impact on your financials, you may never have realised that you had missed invoicing someone or the huge impact that lost client has had.

Goal to launch new product line

Goal = new product line launched by April 30th
Actual = delayed for 1 month due to supply issues

If you have a look at your profit and loss statement, you’ll obviously see that there is no revenue relating to that product. Your sales by product would indicate this as well. But what probably appears in the profit and loss are expenses associated with the development of this new product line (technically they could be assets but I won’t go there!). Now, as there is no revenue from that product yet, the results (although actual) are distorted due to this fact. Now you can see how analysis of those goals gives you vital information for the story behind your numbers.

Goal to increase average daily sales

Goal = increase average daily sales by $2 per day (large volume of transactions)
Actual = increased average daily sales by $2 for first week, but then dropped back.

Let’s start with the analysis of achieving the goal one week of the month. Perhaps you ran a promotion for one week to promote a particular product line. The effect was great, for a week at least, but then you stopped promoting that product for whatever reason. In other words, you dropped the ball and you undid all your great work!

In the profit and loss reports you may show a slight increase in expenses associated with this promotion. The extra revenue generated for the week will also appear, but it may not cover expenses incurred, which makes the promotion look like it did not work. This may not be a fair assessment. If you do not monitor and perhaps tweak any marketing or promotions for your business you will not see the translation into net profit. Enthusiasm, consistency and effort are major components of effective promotion and marketing.

As you can see, not only is reviewing your goals important from the stance of checking where you are on your journey but it also helps you read and understand the story behind your numbers. Unusual occurrences or nuances will come to light that you may not have discovered if you had not measured your goals and achievements.

You can also see the importance of “reading” your numbers and trying to understand them. Your tax accountant will probably not know about the internal occurrences relating to your goals and thus cannot interpret those results for you in that manner because they base it on the clear hard facts.

They may ask you questions to determine any factors affecting the accounts and this is where your responsibility lies. You need to understand how what you are doing (or achieving) in your business affects your financials. If you are unable to see and learn the connection between your actions and your financials, then ask for help. Speak to a management accountant or business coach. Speak to someone that can assist you to understand the story behind those black and white (and sometimes red!) numbers.

Once you get to the stage where all of your business numbers are sorted, you must then find a way of making sure that they stay organized at all times. To do this you need to develop a maintenance process. In just the same way that you need to make sure that the weight that you shed during a diet actually stays off, you need to ensure that your figures stay organized too.

In order to keep your business in the best of health, you must be able to access accurate, current figures as and when you need them. This means that the maintenance of your data has to be given priority – it needs to happen on a regular weekly basis. The first thing to do is to select a day for doing the task.

Whether you do it yourself, or you delegate it to your bookkeeper, you must nominate a day and stick to it. For example, you could pick Tuesdays as this is the day when you pay your salaries and it pays to do your tasks in one fell swoop.

Let’s make a note of the actions that need to take place.

1. Your paperwork must first be gathered together prior to it being entered into the accounts program. Most businesses will enter all outstanding supplier invoices into the accounts software package as a prerequisite to getting them paid.

2. In order to facilitate this you should first collate into the following categories:

(a) Invoices awaiting logging onto the system.
(b) Invoices already paid in full.
(c) Supplier statements.
(d) Customer invoices (raised post sale) OR
(e) The day’s registers and (for Retail) all EFTPOS receipts.
(f) Bank statements.

3. As regards points (a), (b), (c), and (d), manila folders make good files; fast and simple to use – just jot the
name of the file on the front for easy reference. Only keep one week’s worth of papers in each file.

4. For the daily register and EFTPOS receipts, a large A4 envelope is sufficient and works well in keeping all of those loose bits of paper in one place. It’s best to simply jot the date down on the top left hand corner. You can keep the envelopes next to the till-points so that at week’s end you can simply gather together all the envelopes pertaining to that particular week and take them back to your office for processing (once the daily reconciliations have been completed of course).

5. Just as a useful tip, leave the manila folders close to the recycling bin. That way, when you go through the day’s mail, you can ditch any junk straight into the recycle bin rather than letting it clutter up the desk or accidentally finding its way into the general rubbish bin. Efficient, and green too! So, when Tuesday rears its ugly head, just grab your manila files and:

(a) Log the supplier invoice details onto the system.
(b) Record any supplier invoice payments made.
(c) Process customer invoices and/or EFTPOS receipts.
(d) Balance the bank and credit card statements.
(e) Action supplier payments. It is good practice to get into the habit of doing this on one specific day per
week.
(f) Pay any employees salaries

6. Job done! – And when you are finished, all you should be left with is a set of empty manila files, all ready and waiting for the next week’s exercise. By keeping to this routine, you will find that it will be a doddle to stay on top of things.

7. On a regular monthly basis (generally at the end of each month), you should check the statements sent in by your suppliers. This is how you verify that the information you have entered on the system in terms of invoice detail, amounts, and payments made, are accurate. This is a task that can easily be delegated.

8. Remember that the maintenance routine laid out above only operates efficiently when done on a regular weekly basis. If you find that you don’t have the time to keep this going, then you need to cast around and see if there is someone else that you can delegate this important routine to. Don’t lose sight of the fact that it’s “horses for courses”. Do what you do best. By sticking to this concept, you will not only enjoy your work more, but you will operate much more efficiently. It’s all too easy to end up being a highly paid bookkeeper when you should be steering your business.

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