Bookkeeper and Your Accountant

Bookkeeping and Your Accountant - MBS Bookkeeping ServicesThere can be confusion among small business owners when it comes to responsibilities between bookkeepers and accountants.  There are some who believe that they will save money by using the services of a professional bookkeeper rather than services of a Certified Public Account (CPA.)  I answer that question with this analogy:  would you ask a nurse to perform open heart surgery, or would you ask a heart surgeon?  Both are critical to the field of medicine just as the bookkeeper and the CPA are both critical to the field of accountancy.  Let me point out a few important differences.

CERTIFIED PUBLIC ACCOUNTANT

A public accountant is qualified to help you strategize and make important decisions so that you can grow your business and avoid some common pitfalls.  A CPA can also help you with strategic tax planning.  Your CPA takes your business financial planning to the next level.  If you don’t currently have a CPA, get one.

BOOKKEEPER

The bookkeeper then implements at the nuts and bolts level the strategy you and your accountant develop.  Your bookkeeper will set up your books and classify transactions that correspond to your business strategy.   At the most basic level, your bookkeeper spends a great deal of time posting transactions to the correct accounts so that your financial reports correctly reflect the financial health of your business.   Other important functions include maintaining reconciled book balances and managing your accounts payable and accounts receivable.   Your bookkeeper must be able to provide you with your current cash position when you are faced with a critical financial decision.   I’ve just scratched the surface.

These are your most basic differences.  But as with all things, bookkeeping professionals have different skill sets and areas of proficiency.  There are many professional bookkeepers who are trained and skilled to help you in many other areas.  These might include budgeting, forecasting, pricing, payroll, training, and so on.  So what should you do?  Your business is your ship and you are its captain.  You should make a list of skills and assistance you are looking for in a bookkeeper and look for someone with those skills.  A good place to start is by asking for referrals from similar businesses or from your accountant.  Schedule a meeting with the Alexandria Small Business Development Center; they have professionals available to advise you.  If you have an in-house bookkeeper, make sure your bookkeeper gets the training she/he needs.  If you are a start-up, meet with your accountant on a periodic basis to be sure you are on track and give your bookkeeper feedback.   Bad bookkeeping means poor output which can mean insufficient data for you to use when making critical financial decisions.  Don’t be penny wise and pound foolish, as the old saying goes.  The little you may save today may cost you plenty in the future.  Be smart and get professional advice.  It doesn’t matter if you keep your own books, if you staff it, or if you outsource… Be Smart!

 —

Sue McLaughlin is the founder and principal of McLaughlin Bookkeeping Services, LLC and MBS Bookkeeping Seminars. Her mission is to offer small-business clients a fair price for bookkeeping services while delivering excellent customer service.

Culture – What is it Good for?

Whether consciously planned or not, your organization has a culture.

In several HR seminars I’ve done for Alexandria’s SBDC, a common comment was surprise at the importance of culture to their organization’s future. Many attendees said they simply had not thought about their culture or its impact on hiring or productivity.

What creates the culture in an organization?

  • First is the vision since many people join (or buy from) because of what they understand the business or organization to be about.
  • Next is what we say about our organization – our story, our values.
  • Third is how we implement our vision and our values.

While other issues of culture may be included, these three give you the basics of the culture in your organization. How are you actively manifesting them?

When I do organizational assessments, I often find a difference between what founders/CxOs say they want as a culture and what their practices actually are. For example, you may have been in a ‘do as I say, not as I do’ work arena – and that is one critical strike against a positive, productive culture.

Aligning your culture, your policies, and your actual practices is critical for success. Sometimes, the culture originally developed is not what you now need. Or worse, the culture you thought you had created is not what you actually have.

As you prepare for future success, take a look at your existing culture.

  • Is it what your organization needs?
  • What you want?
  • How is the desired culture expressed in basic practices and policies?
  • Will the existing culture support your strategic and business plans?
  • If so, great! If not, what are you going to do? How? When?

One of my clients was an ethical, terrific founder who knew his business and had great ideas. He was quite successful at first. But over time, his dislike of and avoidance of conflict led to a culture where all disagreement was avoided. People were retained when they should have been fired, and critical decisions were delayed or left unresolved. And it cost him his business. While extreme, this is not an unusual failure – it happens too often in organizations where the culture has become a hindrance to success. 

You can create a culture that helps your organization succeed.   But it takes attention and thought to do so.  And to maintain its best aspects, you need to keep your culture in mind  as needs change, as you grow, as your environment changes — all those may require tweaks to your culture.

Should I Hire an Employee?

The decision on whether to hire a person is especially critical whether you are just beginning to grow or need specialists you are not sure you can afford.How do you decide whether or not to hire employees?ASK YOURSELF:  1. Is this work which must be done over a long term?

If the work is on-going and critical to your organization’s success, consider hiring or leasing an employee.  If it is not, consider other options.

Work can be done by independent contractors who specialize in the area, by temporary staffing services, by consultants for a project or a specific need, by an interim executive, by a paid intern, or by sub-contracting.  Would one of these options work better for you?

Too often, small organizations add a non-core position because of short-term or part-time needs and then realize that work has expanded to fill the time, not because of actual necessity.  So a real 10-20 hour a week need has become a full-time employee.

2. Can I afford to hire a regular employee?

Hiring employees who support your revenue or mission growth is smart.  But once you hire, you cannot skip pay periods, tax or legal obligations.  Costs
include the person’s pay and also:
* mandated benefits including: OASDI (‘Social security’ and Medicare), unemployment insurance, workers compensation insurance
* costs for space and equipment for the employee
* pay processing and accounts establishment costs
* legal compliance and risk management costs

Check out your state’s small business services or your local economic development agency – these provide detailed guidance on any local laws you need to comply with.

OK, I want an Employee

Think: What type of work and level do I really need?

Classically, small employers want folks to wear multiple hats.  But the work combinations must make sense and be right for your organization’s needs.

There may be a terrific sales person who is happy to be doing administrative work half of the time but it is unlikely!   Two part-timers or outsourcing one part makes far more sense where the work needs are very different.

The other classic is to want a senior-level person to show you are growing and to get some strategic advice, but want that person to also do basic level work.  A CTO is not going to do programming.  And hiring a CxO of any sort usually results in hiring several more layers as well.  So, you had a Manager of Accounting and one accounting clerk before and now have a CFO and 5 staff, but no more revenues.

Not sure how to structure a position?

Take a good look at similar job ads from larger organizations: what set of skills and requirements do they combine?  Many put fairly detailed descriptions on their website employment section.  Check to see if your trade association offers sample job descriptions you could tailor to your needs.  Ask other business owners.  Ask your vendors in that area for ideas.

Before you add a position, make a clear list of exactly what business necessity creates the need, all specific responsibilities that need to be fulfilled, and what increased revenue will result.

OK I’ll outsource    I don’t need an employee, but the work needs to be done.

Make a list of potential options.  As with an employee, structure the work clearly.  Ask your advisors and network for recommendations.  Current vendors are a great resource; e.g., CPAs often know other services providers, such as IT support, and can recommend people to meet your needs.

Grow Smart!

Hiring people who can contribute to your organization’s growth and success is an important step.  A little thought and effort first to ensure you only add costs you can afford and you spend your money on the best possible solution for your needs will repay you handsomely.  Unfortunately, too often the opposite is true – and having a staff becomes a nightmare of added work, added costs, and negative results.

Ask questions, seek advice, consider alternatives – do all the things that you would do before offering any new product or service to your customers or clients.  You will grow much more successfully with less hassle if you do!

Google to Great Webinars: Google Sites

Using Google to Be Found, Part 1 – Google Sites from Ray Sidney-Smith on Vimeo.

In our first Webinar, we present Google Sites, the Internet giant’s tool to help your Small Business quickly and easy draft, edit and publish a Web site in minutes!

Google describes its product as:

With Google Sites, you can easily create and update your own site. Google Sites allows you display a variety of information in one place—including videos, slideshows, calendars, presentations, attachments, and text—and share it for viewing or editing with a small group, an entire organization, or the world. You always control who has access to your site.

We go over you would use Google Sites to plan and implement a new site, how to modify the look and feel, how to navigate the basic and some intermediate features of the product. During the Webinar, we allotted ample Q&A time with our favorite “Google-ologist,” Ray Sidney-Smith, and had some great questions!

Do you have a question after watching the video? Ask it in the comments below, or tweet @w3consulting and include the hashtag #googletogreat in your tweet. We’ll post a video response to your question!

Casart Coverings Finds Inspiration From Maya Romanoff Wallcoverings. Where does your Small Business find inspiration?

After attending a wonderful lecture by Joyce Romanoff, President of Maya Romanoff handmade wallcoverings in March, I am now even more appreciative of their exceptional wallcovering now that I am more familiar with their process and their work ethics. I’ve been admiring this company’s products since I first saw their three dimensional Beadazzled™ wallcovering back in the late 80′s, when I attended one of the Design Houses at the Washington DC Design Center. They have since expanded this line to include Bauble, Geode, Leaf, Leaf Rain, Bijou and Marquetry. In fact, any image or photo can be “bedazzled” with hand applying glass beads over the surface. It’s quite stunning and looks like a beautiful, beaded ball gown.   

Maya Romanoff Bedazzled™ wallcovering

 Bedazzled wallpaper from Design House 2008

Joyce mentioned that their big break came when The Limited used their wallcoverings on columns on many of their flagship stores throughout the country. This helped bring broad public awareness regarding to the unique quality of Maya Romanoff wallcovering because they worked so organically well with the interiors while still making an impact.

All of their wallcoverings are handmade in some way — by fabrication and or applying a decorative finish. We watched one of the Maya Romanoff artisans show us a step-by-step demonstration of two different treatments. Many of the Maya Romanoff workers have been with the company for generations and the business is family run. I was surprised how similar the techniques were to what I and other decorative painters use for wall treatments. The difference is everyone has their own “special” ingredients for their paint wash and the substrates may be different. In this case, the finish, not unlike a brushed-on, sponged-off treatment with highlights, was applied over a clay-coated, crumpled, vinyl wallpaper.

 

The final result glistens. It looks wet but dries quickly with the clay treatment. It is installed flat but the crinkles and pockets of pooled pigment give the impression of a marble-like appearance

The second finish was applied over hand applied wood veneer panels, tiled as wallcovering, which almost seemed too beautiful to retouch.

This beautiful wallpaper can also be installed as ceiling tiles and with that little extra glint of crystal. Get the super glue. Yes, Swarovski crystals can be applied.

Maya Romanoff has quite a progressive history — having been around since 1969, when Maya, the company’s founder, reproduced his tie dyes as wallcovering. He is quite a successful hippie. Since then, they have led the way for producing the largest amount of handmade wallcovering, which requires a  traditional and professionally installation. They also have helped to employ and bring work to help several impoverished countries’ economies and have been given a lifetime humanitarian achievement award for their efforts.

Besides admiring their gorgeous wallcoverings and this company’s ethics, I can completely resonate with their philosophy:

  • They encourage creativity and risk taking while remaining true to business guiding principals.
  • With wall décor trends becoming more luxurious for residential and hospitality, they want their wallcoverings to have fine attention to detail without taking over a room but becoming organic with its surroundings and beautifully blend in.
  • They encourage their artisan creations to have the spontaneity and energy of a work of art.
  • They promote hand painted vinyl and realize wallcovering is not just for walls anymore and can be used on a multitude of surfaces.
  • Wallcoverings can be “green” with sustainable materials, longevity, and low VOC. Many of their wallcoverings will long outlive paint.
  • Their goal is to put the handcrafted back into value and balance handcrafted techniques with machine and technological production.

My fascination and admiration continues and even more so, after sadly learning that Maya now has advanced stage Parkinson’s Disease, so many of their charitable efforts go toward this funding. Take a look at the Maya Romanoff website; they continue to be a source of inspiration.

Although Casart Coverings does not have or could not afford to have this type of handcrafted production, we have designs that have been originally handcrafted. Our wallcovering materials, however, are not handmade and require machines and technology but the two do marry to create our final product. And of course, our wallcovering is removable and reusable and like Maya Romanoff’s can also be customized. We like this personalization part of our business. It keeps us close with our customers and helps us make an even more exceptional product to suit their needs. At present, we are really the only reusable wallcovering company offering such extensive custom services.

— Ashley Spencer

 

Today in Small Business History: Architecture Loses a Genius. We Learn How Not to Run a Small Business

Portrait of Frank Lloyd WrightFrank Lloyd Wright died today, April 9, 1959. He worked for the acclaimed Adler & Sullivan architectural firm throughout the latter decades of the 19th century, under the mentoring of the great architect Louis Sullivan. In 1893, after departing with some dramatics from his employer-architecture firm, as his Wikipedia article states, “Wright established his own practice….” And, while we may have lost one of the greatest architectural geniuses of our Nation yet on this day, we gained some valuable insights into how (as well as how not) to run a Small Business from those years after 1893 when Wright ran his firm.

 

FUNCTION OVER FORM

Louis Sullivan coined the phrase, "Form ever follows function."
Louis Sullivan coined the phrase, "Form ever follows function."

Frank Lloyd Wright was the force behind Usonian-styled housing design and what he believed was the way in which to overcome the great housing problem. Clearly, this was inspired by his mentor, again Louis Sullivan, who coined the phrase, “Form ever follows function.” We’re lucky to have one of the examples of this style of design right here in Alexandria, Virginia, the Pope-Leighey House, which was reconstructed and moved to its current place in southern Alexandria off of Route 1.  You can visit the Pope-Leighey House to see the tour and experience the brilliance of Wright’s design. Contrary to his architectural beliefs, the principles of utility in designing a house was also not apparent to Wright in his own finances. If you read his biography, you learn that he forgot about the basic principles of business–to turn a profit. He loved to live and dress lavishly and died penniless. His legacy is great but not because of his financial wealth. In business so often we forget that utility is much more important in Small Business than looking perfect. Let Wright be a lesson for us all.

Pope Leighey House - 1940 - an example of the Usonian architectural style of Frank Lloyd Wright
Pope Leighey House - 1940 - an example of the Usonian architectural style

 

 

RELATIONSHIPS MATTER

Though his relationship with Louis Sullivan was challenged, he still paid for and buried his former employer and erstwhile-friend when he died, also impoverished and alone in a Chicago hotel on April 14, 1924. Relationships matter in Small Business, much more than with big brands, even when the professional relationships are strained. Many small businesses in the United States are started and grown with the people we know and trust; even more are built with family members (husbands and wives, brothers and sisters, children and extended family). These are relationships worth preserving, even when the business of life impacts the personal. You never know when you need your former business colleagues, family business partners and long-time friends turned business associates to bury you, but you know that day may come.

FAIL WITH GRACE

One of the most vital traits for every successful entrepreneur is our ability to persevere in the face of repeated failure. Perseverance requires a belief you learned something from the prior failure to make your next plan a success. Frank Lloyd Wright suffered losing one of his wives and adopted daughter in a house fire; his subsequent rebuilding of the house was also burned down a few years later. He rebuilt the home (Taliesin III) even though he suffered a loss of some half-million dollars in 20th century currency! Frank Lloyd Wright also had two failed marriages, another failed relationship that virtually ruined his career here in the United States, and still managed to publish the great portfolio that made him famous in Europe. In the face of adversity, it seems that Frank knew how to fail with grace, brush off the dust (read, gossip and backstabbing), get back up on the horse and charge forward into the next chapters of his life. We should all be so lucky to have such resilience.

 

While Frank Lloyd Wright may have made some great mistakes in his life, he still stands as a great lesson for us today as Small Business owners.

 

Louis Sullivan photograph courtesy of Wikipedia
Frank Lloyd Wright photograph courtesy of Wikipedia
Pope-Leighey House photographs courtesy of cliff1066™ 

Hiring the Right Professional

Wow! I'll Buy One! cartoon by Clay Butler

 

Delegation is a skill that when done properly, saves you time, creates a circle of support, and enables you to achieve much more than you could on your own.

Hiring the wrong person wastes huge amounts of money invested in people not capable of delivering what you need them to do. It also steals massive quantities of time you did not budget. Women have particular difficulty delegating–as they often don’t want to burden others who may have full plates, are afraid to ask for what they need, and are hesitant to be too probing when interviewing.

My client, Emily, came to me with a history of poor delegation experiences. Whether hiring a handyman, housekeeper, assistant, or architect, she always ended up shocked and disappointed at the work they produced, feeling like all the dollars (and hours) she and her late husband had invested went swooshing down the drain.

The latest: she’d hired a fitness coach to put together an exercise and nutrition plan for her. Her assumption was she would get a complete program – a month’s worth of workouts and a month’s worth of menus. She expected instruction on the workouts and recipes to go along with the variety of menus. After paying a small fortune, you can imagine her shock, when all the fitness coach sent was an exercise book describing different types of exercises she could do, shopping guidelines, a handful of meal suggestions, and links to online websites with recipes. In analyzing the history of their communication, we discovered where Emily had gone wrong–she’d been very unclear about what she’d hired the fitness coach to do. I suggested Emily reach back out to the man, explain the mistake, and ask what it would take to get what she wanted.

Here’s what she learned:

It took me a while to work up the nerve to call Bill. I had a really hard time getting in touch with him, too. I finally heard from him after a few phone calls. Seems he has a different approach to fitness coaching – I was looking for a structured, detailed plan. I would show up, he would tell me what to do, and I would head home and follow his recipes. Bill’s approach is based on giving me the tools to make improvements. He doesn’t coach his clients through the workouts, and he doesn’t have the “bank” of recipes in his database I’d assumed he did. He believes in cooking based on ingredients I enjoy eating the most. Ah, well. Looks like she was never the right match.

Based on my experience in looking for the right assistant, I provided Emily with an organized process for improving her batting average with future hiring of the right professional.

  • Define your expectations. Sit down with pen and paper and ask yourself the following: How will I measure success for the money I am investing in this person? What do I expect they will bring to the project or task that I can’t do myself? List the time, skills, and talent you imagine this person needs to do this job (i.e. creativity, flexibility, speed, integrity, etc.), and devise questions that will probe at their skills in each area. Being crystal clear on what you want makes it easier to recognize the right resource when you find it.
  • Interview based on historic performance, not future vision. When interviewing, we often ask questions in hypothetical terms–e.g. “How WOULD you do something…”which only produces answers based on what the candidate thinks you want to hear. History (or behavior) based interviewing stems from the belief that the greatest indicator of future success is past behavior. Try asking for examples from past job experiences, using questions that begin- “Tell me about a time when…” or “Give me an example of a moment that…” You’ll be amazed at what you hear. By listening to each candidate’s detailed stories of what they have ACTUALLY done, you are in a FAR BETTER position to evaluate if they are a good match for your needs, and have the experience to deliver on your goals.
  • Comparison Shop (at least three candidates). Emily had hired this fitness coach without doing her homework. It was on a whim, after hearing about the experience of a friend of hers who had recently moved to a retirement community in Florida. Emily was so enamored with the experience her friend had received, and she assumed all fitness coaches operated in a similar fashion. Always interview at least three candidates, so you have options to compare and contrast. Shopping allows you to pick the person who is the best match for your specific needs, and often helps you learn what is reasonable to expect.

Taking the time to be clear and methodical when hiring, may take longer up front, but it could surely help save you beaucoup dollars (and precious time) in the end.

Workshop Recap: From One to Many — Smart, Effective Hiring – Patricia Frame of Strategies for Human Resources

Attendees of Small Business Hiring Workshop at the Alexandria Virginia SBDC

Alexandria SBDC hosted their monthly Brown Bag Workshop yesterday and it was a packed house! Patricia (Patra) Frame of Strategies for Human Resources provided a higher-level prospective with some well-conceived, practical lessons for hiring practices for Small Business entrepreneurs new and growing. If you haven’t yet, you should check out Patra’s blog post, Hiring the Talent You Need to Succeed, that was published last week here on AlexandriaSmallBusiness.com. Here’s our Twitter transcript and summary video, and I’m sure the slidedeck will go live on the Alexandria SBDC website soon. We hope you can join us at future Brown Bag workshops or via our live Twitter conversations!

TWITTER TRANSCRIPT

David Martin of Gold Works Custom Jewelry Design and Repair discusses his hiring needs
David Martin of Gold Works Custom Jewelry Design and Repair discusses his hiring needs

We launched our first foray into live-tweeting on Twitter at this workshop with the hopes of engaging Small Business entrepreneurs in Alexandria that cannot make it to the event but would like to participate and learn with us anyway. While live tweets will never outweigh the benefits of attending in person (think of the free, one-to-one networking opportunity!), being with us via Twitter is a great way to market your business, generate Twitter buzz around content for your target audience, and to learn and share virtually with your fellow local businesses.

Click the link to the right for the transcript: Tweetchat for alexvasbdc hrsmarts 2012-04-03

SUMMARY VIDEO