Bookkeeping is a funny thing. Business owners either know how to do bookkeeping and are comfortable making the day-to-day entries - or they do not know how to do bookkeeping and don't want to have anything to do with it.
The good news is that bookkeeping is one of the easiest jobs to delegate. If you are not comfortable doing the bookkeeping, hire a Virtual Assistant and let them do most of the work. A Virtual Assistant can probably do most of the bookkeeping work in 4 or 5 hours a week. That estimate depends on the bookkeeping services that you want them to do.
One of the benefits of a Bookkeeping Virtual Assistant is to Create and Send Invoices.
In another of the Blog articles on our website,
Tasks That You Can Delegate, we talk about the 3 general types of tasks that are the best tasks to delegate. The 3 general types are:
- Anything you hate to do.
- Anything that you can't do.
- Anything that you shouldn't do.
The Cause
For some business people, bookkeeping might be included in all 3 of the general types of tasks to delegate. Some business people simple cannot understand the basic principles of bookkeeping. That means that they can't do their own bookkeeping. By logical extension, if they can't do bookkeeping, they also hate it and shouldn't do it.
And that is a problem. Especially if you are the founder and manager of your own business. If you are very, very lucky, one of your business partners will understand the principles of bookkeeping and can do this important work in an accurate and timely manner.
If you don't understand the principles, hate it, and shouldn't do it, that usually means that you don't keep up with your bookkeeping. If you don't keep up with your bookkeeping, it causes all sorts of other problems - problems that are a lot more serious. Let me give you an example.
The Effect - The Rule of Unintended Consequences
We have a guy that works on our air conditioning. We will call him Bob. Bob is a very personable guy. He is very easy to like. He always has a smile on his face and a happy demeanor. If you are an a/c person in a state like Texas, with the heat and humidity, you are almost guaranteed that you can make a good living.
Bob started in the a/c business working for someone else. He worked and learned. As he worked and learned, in his mind he always had the desire to provide a higher standard of living for his family. Once he had a good bit of knowledge and experience, he started his own a/c business.
Starting his own business should have been the start of a higher standard of living for his family. Instead, it is when his problems started.
All the time that Bob was working for the other company, someone at the other company was doing the bookkeeping. Bob never considered the fact that when he started his own company, he would have to do the bookkeeping. Bob wasn't the guy to do that. He hated bookkeeping so much that he didn't even balance his personal bank accounts.
It seems to me that bookkeeping for Bob is caused by 1 or 2 reasons. Either Bob hates to do bookkeeping or maybe bookkeeping is something that he just can't do. Either way, bookkeeping is something that Bob just should not do. I have spoken with Bob about us doing his bookkeeping for him as a Virtual Assistant. He says that he can't afford us.
When we need our a/c serviced, which is at least once a year, we call Bob. Bob usually arrives at our house on time for his appointment. After Bob does the work and leaves our house, it takes literally months until we get an invoice.
Apparently Bob hates bookkeeping so much that he constantly puts off doing the work. Once a business owner gets too far behind in sending out the invoices, there are all sorts of ramifications.
As the owner / operator of the business, if the time between the completion of the work and the creation of the invoice is too long, you tend to undercharge for your work. You can't remember exactly what you did or all the parts you used. If you can't remember, human nature is to err on the conservative side. The net result is that you probably are not charging for all the work or parts that you use on every job. It quickly starts to add up. It has a negative effect on the profitability of your business.
Your business has to pay your vendors upfront or within 30 days to buy the parts and supplies needed to do the a/c work. If your business is not up to date onj send out invoices and collecting outstanding invoices, and then they are borrowing money to pay for the parts then need for the 90 days or longer that it takes to create the invoices and to be paid by the customer.
From my perspective, if it takes Bob 60 to 90 days after he does the work to send me an invoice for that work, I can't help but assume that he is in no hurry to be paid.
I'll give you another example. The coil on our a/c unit went bad. The part is under a warranty, but we have to pay for the labor and Freon. Bob has a well earned reputation for not paying his bills on time. So the parts house will not give him the replacement coil on credit. Bob must pay for it when he picks it up or when he brings in the broken coil. Bob obviously cannot pay for the $1,000 coil when he picks it up. So he wants to come to our house, take out the old coil, drive about 60 minutes to the parts house, exchange the coil, drive the 60 minutes back to our house and reinstall the new coil.
Bob charges us for the time he spends on the job. But Bob's time on my job includes an extra 2 hours of drive time to drop off the old coil and pick up the new coil - all because Bob cannot do his bookkeeping on a timely basis.
The Solution
We could solve Bob's bookkeeping issues very quickly and easily.
We could setup an online bookkeeping system for Bob. Bob's company has 1 employee. We could setup Zoho One for $45.00 per month. With Zoho One, Bob would have access
Each time he completes a job, he could send us a text or message that includes a list of the charges. We can then create a draft of the invoice and have it waiting online for Bob to approve that evening. Once we have Bob's approval, we can then send the invoice to his customer.