How to Get Your Books in Order

The Executive’s Guide to Carpet Cleaning Part I: FINANCES

The Books, Part I: Approach

(This is Day 1 of a three-day crash course in accounting basics for carpet cleaners.)

No matter how small the business is, every business owner should keep records. If you sell products and services, your personal and business finances should be separate and you should be keeping ledgers. Doing your own bookkeeping is not that difficult. But you need to be disciplined. Build it into your schedule and do everything you can to NOT fall behind. Catching up is way less fun than just printing up a report (trust me on this one). Here are some general guidelines you should consider when you start tracking numbers.

Part I – Approach
There are many ways to keep your books in order. Think about it–the human race has been “keeping books” for over 7,000 years! Luckily, clay tablets have been replaced with much better tools.

Paper-Based Bookkeeping: We’re not talking about your customer list and schedule here. Arguably, that data is more important. We’re talking about money in and money out, income and expenses. You can keep traditional ledgers, but that’s way more work that it needs to be. That’s all I have to say about that.

Computer-Based Bookkeeping: You actually have several options here. Many people use Excel or a similar spreadsheet program to keep their books organized. Other businesses owners use accounting programs, like Microsoft Money or QuickBooks. You could use an industry-specific program such as ServiceMonster, which helps track your accounts receivable, your customer list and your schedule. Or you could follow the lead of some businesses and develop a custom system.

  • Spreadsheets: While this solution can seem easy at first, your business and personal finances operate very differently. What works for one may not work for the other. You’re also missing the boat with reporting and analytics. If you are dead set on this approach, I encourage you to take some bookkeeping and accounting classes at your local community college. Most people already have a spreadsheet application on their computer. If you don’t, there are free versions of office software like OpenOffice available. The most common format is Microsoft Office, which costs roughly $150.
  • Accounting Programs: Just go with QuickBooks if you can. They have the largest customer base and offer an incredible array of products and services. Additionally, most accountants know QuickBooks. They also have the largest pool of integration professionals, meaning that lots of business programs can talk directly to QuickBooks. This comes in handy when you want to avoid any double data entry–entering things in once is challenging enough! If you’re not U.S-based, other accounting programs may work better for you. Simply Accounting is a solid program offered in Canada; however, integrating it with other programs can be a real pain.

    Why waste hours doing your books by hand when programs like ServiceMonster can do them for you?

  • Carpet Cleaning-Specific Programs: When you want to keep all of your data in one place, programs like ServiceMonster work great–they can provide you with scheduling features; customer records with complete invoice histories; sales tracking features; and marketing tools. Most of these programs have accounts receivable (tracking invoices, sales receipts, and payments), but do not support the full array of accounts payable available to accounting programs. Luckily, they don’t have to, since many of these programs work directly with QuickBooks. So you can enter the data directly into ServiceMonster, click a few buttons, and boom–all that information has been transferred. The price range on these types of programs can vary greatly. So can their customer service standards, training resources, and product support. If you go with something that you just install on your computer, you could easily spend $3,000 or more just on set-up. If you sign up with a service like ServiceMonster, you’re usually spending well under $100 per month–and they take care of all the heavy lifting for you.
  • Custom Systems: I used to work for a company that spent more than $1 million on a custom accounting system. It took over 12 months to get it into production. If you’re ready for that kind of investment, call me.

Next Steps: There are many ways you could go “wrong” here. But the biggest mistake you can make is to wait. My advice for you depends on your answer to the following question: what do you need more help with TODAY: recordkeeping or sales?

  • If You Need Recordkeeping Help First: Get QuickBooks now. Learn it. Use it. Then when you are all settled, get ServiceMonster. Having learned QuickBooks first, you’ll know what ServiceMonster is doing when it moves your data from one system to the other.
  • If You Need Sales Assistance First: Get ServiceMonster now. Learn it. Use it. Love it. Then in a few months, get QuickBooks. You don’t even need to know that much about QuickBooks–ServiceMonster will move the data for you and then your accountant will know what to do.

Want to get control of your money? Try ServiceMonster for free today!

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