Especially if someone else is keeping the books!

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Hi! There are many businesses out there where the owner is removed, in some cases almost completely from the bookkeeping. The bigger the business generally the further removed. Even in the largest fortune 500 companies, at some point the CEO will be in contact with the results of the bookkeeping when (s)he reviews the financial reports with the CFO. Where do you think that information gets its start? For most smaller companies the business owner is a lot closer to the day to day bookkeeping – even if they don’t actually get into QuickBooks themselves. Let’s define “smaller” businesses as anyone doing under $10,000,000 in annual sales. Certainly anyone doing less than $5,000,000. IF that is you then there are 5 things you should know how to do in QuickBooks to be sure your bookkeeper(s) are doing their jobs properly.

  1. Run key reports;
    • Balance Sheet, Accounts Receivable, and Accounts Payable Reports
      • A/R Aging
      • A/P Aging
      • Customer Balance Detail
      • Vendor Balance Detail
  2. Drill into a transaction from a report.
  3. Drill around a transaction to see related transactions.
  4. Run the audit trail report
  5. On any transaction detail report, show “Last Entered/Edited (and by whom).

Once you have an understanding of how to do the above, especially once you see in the video how to use this knowledge in a practical sense you will be better equipped to protect yourself against costly mistakes as well as dis-honest employees. In smaller companies the management, particularly the ownership ARE the internal control of the company. This means they are the ones who protect the assets of the company. Just knowing that you know how to run these reports in QuickBooks and drill into and around the transactions which are demonstrated step by step in my screen cast will likely have a bookkeeper feeling less inclined to do anything dis-honest because most people who steal from companies do so thinking they won’t get caught. If I am a dis-honest bookkeeper and I know that you know how to check up on my work I will be less inclined to try anything.

In my experience it is better if you as the business owner are in fact much more hands on. You should run your balance sheet and P&L every month and go through them line by line making sure the numbers make sense. Make sure you can explain them. I have an entire video class that you can download in my School of Answers that teaches you step by step exactly how to analyze your financial information and interpret the numbers in linguistic terms. In other words, what story are your numbers telling you? When you can do this then you have mastered the art of using your financial information to guide you in your interpretation and decision making for your company’s future success.

Please post your comments and questions about the 5 Things Every Business Owner Should Know how to do in QuickBooks. What is your experience? What do You think every business owner should know?