A Holistic Approach to Accounting
We find that people often look at their accounting only as a necessity so they can file a tax return at the end of the year. And when people are looking to outsource their accounting, they are looking for a "bookkeeper," or someone to enter the transactions so that the books are done come tax time. We take a more holistic approach to our clients’ accounting, it is a piece in a much larger puzzle, and it is truly a foundational piece. And just like a jigsaw puzzle piece, if you look at it by itself, it doesn’t give you the full picture.
If you stop at simply getting your tax return done each year, you’re missing out on the true value your accounting can provide. The financial reports for your business tell a story, if you know how to read them. They can tell you how healthy your business is, who owes you money, who you owe money, which revenue stream is performing well, how much it costs to run your business, whether you’re profitable, and so much more. If you never look at the reports, or if you don’t know how to read them, then you’re running your business with a blindfold on. We work with our clients to make sure they are getting the financial information they need and in an understandable format. One of our main goals is to help educate business owners on the finances of their unique business.
Also, as a small business owner, your business and personal life are completely intertwined and connected. As a result, you can’t effectively identify the goals of the business without first understanding your personal and family goals. For example, when you’re setting your revenue and profit goals for the business you need to also examine the financial needs of your family. How much are you wanting to contribute to your family expenses? Are you wanting to generate enough income to contribute toward retirement, college savings, vacations, buying a house, etc.? Or what if you want to be able to spend more time with your kids, or take a month-long vacation? Those personal goals may impact how you build and structure your business. Without starting with a review of the personal side, you may not set appropriate goals within your business. We work with our clients to examine the whole picture.
We believe that when used effectively, your accounting can provide you the clarity you need to manage your business, the insight to make a plan, and the guidance you need to grow. Thus, the three phases of our holistic approach:
Clarity - Plan - Grow
Step 1 - Gain financial clarity in your business.
This means getting clear on several key things within your business:
Where are you now in your business? Are you profitable? What are your revenue streams? Where are you spending money?
What are your overall goals for your business?
What are the current systems you are using to operate and support your business?
These may seem like obvious things for a business owner to know, but we find that many people get so bogged down in the day to day activities of running their business, they don't take the time to take a step back every once in a while to look at the bigger picture. That's why when we work with clients we do exactly that - we take a step back.
We look at your accounting to see if it is up to date and accurate. We also look at it to see if your accounting system is tracking the information that is useful and meaningful, not for the tax preparer, but for you, the business owner. Your financials need to provide YOU with insightful information about how your business is performing.
We talk about your overall goals for your business and your family. For small businesses the two are very interrelated, so you can't look at one without considering the other. How much do you need to make to contribute to the family finances? Are you getting enough time off to spend with family? What are your long-term goals for the business? What kind of impact do you want to make with your business?
We look at all of the systems you’re using in your business. You know, all those different software subscriptions you're paying for! Are they working together to accomplish things effectively and efficiently? Are they set up to integrate with each other so you're not doing double work? Are there things you’re paying for that aren't really working or you aren't using? Are your different software’s integrating with your accounting system when applicable? It's easy to sort of hodge podge systems together over time as you slowly add things, but sometimes it's beneficial to look at them as a whole ecosystem to see if improvements can be made.
Once you have CLARITY in your business, then you can move on to the next phase.
Step 2 - Make a plan!
Once you have clarity around where your business currently is and what your overall goals and vision are, then you can tackle the next key phase, make a plan!
Research has shown that businesses with a plan are more successful than those without. When you think about it, it makes sense. A road trip is more likely to be successful if you have a plan before you leave.
A party is better when there's a plan, rather than just hoping people show up and food appears. So why do so many businesses operate without a plan? Running your business is likely one of the biggest things you'll do, why wouldn't you put together a plan?
A plan allows you to be more intentional with the actions you take in your business on a daily, weekly, monthly, and annual basis. When you have a plan, you know what the priority is of the tasks on your list, and which things are unimportant distractions. When you have a plan, you are much more likely to accomplish your goals.
We work with clients to put together a plan based on your specific and unique goals. And then we work with you to hold you accountable to those plans. We also put together a method for tracking your progress so we can determine when modifications need to be made to the plan. It's not a set it and forget it kind of thing. It's a living and ever changing thing.
Once you have a PLAN, and are executing it (that's important!), then you experience the next phase.
Step 3 - Grow your business!
You don't plant a seed in the ground for it to stay hidden under the dirt, right? We plant seeds so we can see them grow into beautiful flowers and trees. Your business is like a flower, it started with the seed of an idea, and it is meant to GROW! Everybody's flower is unique based on the soil it's planted in, the water it receives, and the sun that shines on it. The actions you take in your business, the systems you use to run it, the clients you work with, the employees you hire, all contribute to how your business will grow and what it will become.
It isn't just one thing that creates success, it is all of the little things taken as a whole that create profound success.
This is why we take a holistic approach to accounting. Your accounting by itself will not lead to success in your business, but when it is seen and used as a piece in the bigger puzzle it can have a huge impact.