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Sunday, February 24, 2008

Who's Watching YOUR Money? 7 Tips for Hiring the Right Bookkeeper

While Im a strong advocate of hiring virtual assistants, there are two things that no entrepreneur should ever fully delegate: marketing and bookkeeping. The marketing and the bookkeeping of your business can easily make or break you (just think new Coke and Enron). That said, if bookkeeping is not your forte, hire someone to do it you will save so much in frustration just be sure to keep your fingers in the books.

If you choose to hire a bookkeeper, keep the following in mind:

1. Get QuickBooks.

For ease of use, I highly recommend using QuickBooks and hiring a QuickBooks ProAdvisor. QuickBooks ProAdvisors have taken certification exams to insure that they know the system. I have used QuickBooks both for myself and my clients since 1996 and highly recommend it for its ease of use/understanding.

The online version is great in that you can see the latest version of your books at any time and eliminate the annoyance of emailing files back and forth and wondering who has the latest version.

2. She must see both the forest AND the trees.

You want your bookkeeper to be detail-oriented AND to see/understand the big picture. She needs to know what happens consistently every month and update your books without bothering you for items she should know about.

At the same time, she needs to be astute enough to see the larger picture and warn you of any impending problems before they happen. If you purchase a piece of equipment, she should know how to properly enter it into your bookkeeping software to avoid problems and therefore save time and money with your accountant (and the IRS) later on.

3. She must know your industry.

You dont want to have to train your bookkeeper on your industry language, standard industry income or expense categories or other basics. The more up-to-speed she is, the faster she can hit the ground running and the sooner you will have good data. If she doesnt know your industry however, be sure to give her a rundown of lingo and how you refer to your customers/clients/tenants in order for you to get the most meaningful reports out of the gate.

4. She must provide timely reporting.

In hiring your bookkeeper, insure that you put in a provision for when you want to see monthly financials. The date will depend on when your bank month ends give her a few days after that date to reconcile your accounts and produce reports. At a minimum, you want to see a profit & loss, balance sheet and cash flow statement.

Take the time to review the reports so you can spot any irregularities before they blossom into problems. Not sure how to read a cash flow statement? Get a check/electronic funds transfer (eft or auto debit) transaction detail instead. It will help you see where the cash is going.

5. She must know accounting terms and still speak English.

Your bookkeeper needs to know the difference between assets, liabilities, income, expenses and equity and be able to provide your accountant with the necessary data upon request. At the same time however, if you are not numbers oriented, she also needs to be able to explain the financial statements to you in plain English.

6. She must be trustworthy.

Hiring someone to keep track of your bookkeeping requires a level of trust between you both. You need to feel comfortable that she will keep track of your information and maintain your confidentiality. At the same time, if she pays your bills and has access to your bank accounts, you must also trust that she will not abuse that privilege. And make no mistake, it is a privilege to have someone (particularly in a virtual relationship) trust you with their finances, their checkbook and their business.

Good business sense demands that you protect yourself just in case. I highly recommend that, in addition to a confidentiality agreement, you insure that your bookkeeper is bonded and you get a copy of that bond.

7. She must have great communication skills.

If your bookkeeper will be communicating with your clients and vendors, she must represent your business as you would. Whether virtual or in-house, its critical that your bookkeeper be a positive force that further enhances relationships. The question of money can, at times, be a sensitive matter. You need someone who recognizes that and communicates appropriately.

Always remember these are your books and this is your business. While you may hire someone to manage the details of tracking your finances, and should do so if this is not one of your strengths, the ultimate responsibility for oversight is yours. Michael E. Gerber of the E-myth series said it best: Delegate, dont abdicate.

Copyright 2006 Sandra P. Martini

Sandra P. Martini

How To Get The Best Credit Card?

Different people have different needs. Depending on who you are and your circumstances, the best credit card deal for you will vary. I will take you through the things you should be looking for, but for the best current deals I suggest you check Money Savings Expert regularly (http://www.moneysavingexpert.com).

Credit cards allow you to spend a certain amount of money at an interest rate that will be charged every month. The spending amount that is available to you can be seen differently. Some see it as an additional amount to spend, some see it as a risk-free' borrowing opportunity. Credit card spending is not a free' spending opportunity, as you will need to pay this money back. This money does not work like a loan, as the amount available to you is not all cash. However, it can be treated as a loan' and this concept will be explained later.

Other very important concepts that have to be understood before getting a credit card, is 0% offers. There are two kinds of 0% offers: on purchases and on balance transfers. The first one allows you to spend the money provided to you by the credit card without paying any interest for a certain amount of time. So, for example, if the credit card gives you a limit of 500 for three months, then you can spend 500 against this credit card and not be charged interest for the first three months since the credit card was opened. However, once this period of time expires, you will be charged the credit card interest rate. This interest differs depending on the credit card, so if you intend to pay this interest, then you ought to look for the lowest interest rate available. Paying interest can be avoided, unless you have already overspent too much and are using credit cards to pay off other credit card interest. In this case you should call some of the debt consolidation companies and try to get some your credit card debt written off. Another reason why you might be in the position of paying interest is because you forgot when your 0% free time' ended. If this is the case, you will be informed about this with your first bank statement. Transfer your balance to a different bank or pay the debt off and avoid any further interest payments.

For those of you who don't have interest payments, you can take advantage of the 0% purchasing and make some money. You need a good credit history record to make this work and you also need to be disciplined. The easiest method is to do all of your normal spending against the credit card, while putting the money that is coming in into an interest-earning savings account. For example, if your credit card company lets you borrow 2,000, and you have 1,000 coming in as a salary every month, then put the 1,000 into a savings account and do all of your purchasing with a credit card. There are a few things to watch out for: credit card companies will charge you for cash withdrawals; your cash limit is much lower then the full available credit; and choose a savings account from which you can withdraw easily. At the end of the 0% purchase period, you will need to return all the money that you have spent against your credit card. You should have that amount available in the savings account by then, plus interest. The interest gained is your earnings for this transaction. You can earn even more if you chose a credit card with a cashback deal. This deal will pay you interest on all of your purchases made with the card. However, you should remember, that this is a money-making technique, rather then a spend more' opportunity. There is a more complicated trick of making money from credit cards, details of which are outlined by Money Saving Expert (2006).

If you are making money from the credit cards, there is no need for you to get card protection insurance, as you should have enough money to pay off the credit card debt at any time. At the end of the 0% purchasing period, you can also transfer the balance to a different card provider. This is known as 0% balance transfer, but you will be charged a fee for these transactions, usually around 2%. However, these fees vary, so you need to check the conditions. There are a few things to watch out for: the credit limit offered by your bank also includes your purchases. For example, if the new credit card offers you a 2,000 limit, with 0% balance transfer for 12 months and 0% on purchases for three months, and you have transferred 1,500 from your old credit card, you only have 500 to spend on this credit card. The second thing to watch out for is your credit score. "Most lenders' scoring systems aren't sophisticated enough to detect that you're playing this free-cash game. Yet multiple applications, especially at the same time, coupled with high outstanding debts, even at 0%, will diminish your ability to get competitive credit, so the most important thing is to spread card applications out" (Money Savings Expert, 2006).

However, if you are in the position where you are already fighting the interest payments, as has been mentioned before, the best thing to do is to call debt consolidation experts. In any circumstances it is best to pay off the most expensive credit and store cards first (i.e the ones that charge the highest interest rates). Furthermore, avoid opening any new credit cards to pay off the debt. Instead transfer your high-interest debt to lower interest rate credit cards. For example, if your credit card interest rate is 16%, while your store card rate is 25% per month, transfer the store card balance over to the credit card.

Whatever your circumstances, when you do open a new credit card always look for the longest 0% balance transfer and 0% purchase period, lowest transfer fee and interest rate charged afterwards. The limit offered to you will not only depend on your salary and credit rating, but also on the company that you go with.

Finally, do not forget don't play the credit card game if you cannot control it or have a high debt already.

References

Money Savings Experts 2006 "Card Trick" [Available from]: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1076883546,34894 (Accessed on: 10/11/06)

Money Savings Experts 2006 "Card Card Shuffle" [Available from]: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1102335753,51771 (Accessed on: 10/11/06)

Money Savings Experts 2006 "Credit Card Newbie MoneySavers Guide" [Available from]: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1103212597,43859, (Accessed on: 10/11/06)

Copyright © 2006 Verena Veneeva

This article was written by Verena Veneeva professional writer working for http://www.coursework4you.co.uk

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