I was recently asked to compile a list of information needed prior to terminating a bookkeeper.  I’ve compiled a list of things that you may need to retrieve from your bookkeeper, controller, or office manager below.

Even if you have no plans to terminate, pretend like you are firing your bookkeeper or controller and start getting access to anything you currently don’t have access to or cannot easily obtain without the help of the person you are terminating.  It’s important to have control over this information.  What happens if the office manager gets hit by a bus tomorrow?  Your business needs to keep humming along regardless of who is sitting in the bookkeeper/office manager/controller chair.

Termination Retrieval Checklist

Password/Login Retrievals

• Email Account and Aliases
• Computer Password
• Voicemail Password
• QuickBooks/Accounting System Administrator Password
• Bank Account Access
• Payroll Administration Access
• Credit Card Account Login/Access
• Worker’s Comp, Health, Life, and other insurance Logins
• 401k/Retirment Plan Administrator Access
• Merchant and/or PayPal Account Access(es)
• Customer Portal Access(es) (client invoicing systems)

Physical Access/Retrievals

• Keys to office
• Keys to file cabinets
• Keys to mail box
• Laptop
• Cell phone
• Credit Card(s)

Documentation

• Location of unpaid bills
• Location of check stock and deposit slips
• Status of invoicing
• Current copy of cash flow forecast
• Location of sow’s, purchase orders
• Depreciation Schedule
• Working papers/monthly reconciliation files
• Current payroll information
  • Changes to employee records
  • Vacation requests
  • Expense reports
• Location of employee files
• Location and status of tax filings, especially local taxes
• Location of new hire paperwork (insurance, 401k forms, employee handbook, etc)
• Status of 401k/Retirment Plan Contributions

Contact information

• Bank
• Worker’s Compensation Agent
• Health Insurance Agent
• General Insurance Agent(s)
• Third party administrator for Section 125/132 benefit plans
• 401k/retirment plan
• Merchant account

It’s common for small business owners to measure their financial health based on their income statement or bank account balance and deem their business “fit” if the bottom line looks good.  To reveal why this approach can be deceptive, let’s apply a dieting metaphor.

Only looking at the bottom line is the equivalent of “sucking it in” when you look in the mirror.  Sure, it looks like you’ve lost some weight, but what happens when you exhale? You might appear skinny for a moment, but that version of the situation isn’t accurate.

In terms of your business’ health, the balance sheet is the “real” you.  Think of the income statement (also called the profit and loss statement) as your diet log.  It tells you how well you did in a specific time period—last week, last month, or last quarter.  We all know that there are good weeks and bad weeks on a diet.  If you only look at one week or month, are you getting a true picture of your overall health?  Of course not.

The balance sheet, on the other hand, is based on everything you’ve ever done.  In our diet metaphor, it accounts for how much you’ve exercised and what you’ve eaten over your entire lifetime.  The sum of all that information is what you see when you stop sucking it in.

To understand this metaphor, you need to understand what the balance sheet is and how it relates to the income statement. Your income statement contains information about what has occurred in the current period.  Revenue, cost of goods sold and expenses are some of the account types found on the income statement.

To get an accurate picture of what’s happening in your business, you must adhere to the matching principle.  That means you record expenses and cost of goods sold when you have earned the revenue that they are related to (if an expense is not related to revenue, you record it during the period it is used). The balance sheet accounts hold these revenue and expense items until the period in which they are earned or used.  We use accounts such as prepaid insurance, customer deposits, and accrued payroll to classify these things on the balance sheet.

Income statement accounts only reflect transactions in the current accounting period.  At the end of the period, the net profit or loss is moved to the equity section of your balance sheet (to retained earnings).  This means that the balance sheet reflects all prior period revenue, cost of goods sold, and expenses in the form of retained earnings.  The equity section also shows how much you’ve invested in and drawn out of your business.  The equity section, therefore, shows what the company is worth to you.

So, how do you know if your business is “over weight”?  Take a look at your debt to equity ratio (total liabilities divided by total equity).  Compare that to your industry average and you’ll have a pretty good indicator of your business’ weight.  Too much debt and not enough equity means your business is, in fact, overweight—even if your current period income statement looks healthy and you have money in the bank. Because everything shows up on the balance sheet, you can rely on it to depict the financial health of your business.

~Kelly

I have recently acquired a new hobby. I bought a glass kiln and I’m experimenting with fusing glass. On Saturday, I went to the local glass shop with the intent of purchasing a mold to slump a vase. I walked in the door and was immediately greeted by the owners who asked what I was looking for. I told them I needed a handkerchief vase mold and they responded that they didn’t think they had any. A look on the shelf confirmed it.

That’s it. The end of the story. I REALLY wanted to buy a mold. I had money in my pocket and I was ready to hand it over to them. They had great service until they didn’t have the inventory item that I needed. Then they dropped the ball. They sent me to a competitor. No, they didn’t say “try our competitor” out loud, but they didn’t offer me any other options. They could have said: “we can order one for you” or “the next shipment is due on XXXX”, but they didn’t.

I’m certain this local mom & pop shop needs my business, but they are lacking some pretty basic customer service skills. The absence of those skills is costing them money. I witnessed this very thing happen to another customer on my previous visit. I wonder how much revenue they’ve inadvertently given to their competitors.

Today’s exercise: Think about your customer service procedures. Are you doing everything you can to keep your customers, make them happy, and reap the revenue rewards?

I was talking with my daughter today and she declared her math paper was “chop filled” with information. I asked her if she meant “chock-full”. She replied: “No, kids in my class say chop filled. It’s chop filled, mom.” I could almost hear the “duh” behind her response.

Are you chop filled with with information too? Do you act as though you know everything and no outsiders could possibly understand? I think we all behave this way in at least one area of our lives or business. Often it’s not even intentional. We simply don’t know what we don’t know, so we assume we DO know. For your business to be successful though, it’s imperative to show a little humility. Admit to not being the expert on everything. Ask for help.

I work with a business consultant from time to time. The advice I get is often the same advice I give to others. Sometimes even when we do know the answer, it’s hard to implement the solution for ourselves. Gaining perspective from an outsider can yield great results even if you DO know the right answer. An outsider can often provide clarity or insight that you have overlooked. Sometimes we’re just too close to the problem to see the best answer.

In summary, don’t pretend you know everything and exercise some humility. Keeping an open mind is critical to your business success.

~Kelly

I recently began attending a peer group.  The question for our meeting this week is: What book or resource has been essential to your business success?

Interesting question.  The word business in the question automatically sends me down the business book path.  There are a lot of great business books, but have any of them been “essential” to my business success?  I’m not sure.  Certainly there are great ideas in many books, certainly some books are inspirational.  I just don’t know that I can say one business book has been “essential”…without it I wouldn’t be successful?

I pondered the question for a day or so. I reviewed the books I’ve read and the ones that creep to the top of the list.  I couldn’t commit.  A lot of them were helpful or gave me new ideas, but I’m not convinced any of them were “essential”.

Then I realized my error; I was only thinking about business books.  What about other things I have read?  I reviewed my bookshelf again and I realized which book, for me, answers the question: “The Last Lecture” by Randy Pausch.

This book really drives home the importance of living your dreams, seizing the day, and remembering what’s most important in your life.  It’s a reminder that how “success” is measured is up to you.  It’s doesn’t have to be about the money (although that’s a nice side effect).  Redefining success is the whole reason I have my own business.  I’ll tackle my definition of success in a future post…

What about you?  What book or resource has been essential to your business success?

~Kelly

Do you manage your business by the bank balance? Many busy entrepreneurs do but what we know is that managing your business by your checkbook is like managing your personal health by the scale. While the number on the scale is a helpful indicator, it certainly doesn’t mean you’ll get a clean bill of health from your doctor. Join us to learn about other financial tools to help you see, understand, and manage your business’ financial health.

Topic: Beyond the Bank Balance – Create a Dashboard to Manage Your Business for Profit & Growth!
Date: Wednesday, June 9th
Time: 11:30am-12:30pm PDT (2:30-3:30pm EDT)

Click here for more info

I have a confession to make.  I constantly struggle with work-life balance.  Like many of my clients, I also find it hard sometimes to work on my business instead of in my business.

I was raised in Michigan with the good old farm work ethic.  We work hard, we work long hours and we don’t stop until the work is done.  Translation: Work is hard, work is NOT fun.  Intellectually, I know that work can be fun when you’re doing what you love.  I know that I need to spend time on my own business.  I know that my kids are growing fast and I need to focus on them too.

Intellectually, I know what I need to do.  I know what will make me happy and what can grow my business.  What I’m working to overcome is the guilt associated with redefining work.

When you become a mom, you are suddenly bombarded with feelings of guilt.  Am I doing the right thing for my kids?  Why didn’t I see THAT coming?  For me, this guilt spills into my business as well.  It’s a very definite part of my problem with work/life balance.  I guess my business is like another child.  A child that has a whole different set of needs.  A child’s needs that are at odds with my actual children.

Actually, my business is like two children.  There’s the “client work” child and the “business growth work” child.  Each of those children have different needs too.  So I find myself with 4 children screaming for my attention… Izzy, Parker, Client Work, and Business Work.  Mom guilt is at an all time high!

I’m working on this issue, but guilt is a powerful emotion.  I’ve been working with a great consultant (Kathie Nelson, Connectworks) to better align my business with my goals so all work can feel fun and inspiring.  I’m getting a pretty good grasp on that, but getting over the guilt of enjoying my work is still a challenge.   Writing this post while client work beckons, knowing that children will be home in only 7 hours, was no easy task this morning.

What about you?  Do you suffer from guilt in your business?  How are you meeting the needs of all of your “children”?

~Kelly

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