Scenario: Controlling cash & credit
Alison is trying to decide how to handle bookkeeping for her business. Which choice do you think is best?
Alison has just started a house painting company and needs to set-up and maintain a bookkeeping system. She could do it herself, but doesn’t have any real experience. She could hire a bookkeeper or accountant, but that would be more expensive. Her helper, Fred, has computer skills and bookkeeping experience and has offered to do the work, but Alison is worried about the security of her accounts and money.
The consequences of your choice
See the consequences of this choice for Alison and hear what the coach has to say.
“After considering different ways I could become a better bookkeeper – taking a class, reading a guidebook or learning a software package – I talked to another small business owner and my banker for advice. They suggested I hire a bookkeeper to tutor me. She set up a system that’s easy for me to understand and then taught me how to use it. It was hard to find the time to devote to this, but I’m glad now that I did it.”
This advice worked out well, despite Alison’s busy schedule. She was smart to make sure her recordkeeping system was easy for her to understand and maintain.
The consequences of your choice
See the consequences of this choice for Alison and hear what the coach has to say.
“Oh boy, did I make a mistake! Fred set-up a complicated system that I didn’t understand. Then, six months later when he moved away, I had to spend hours getting it straightened out because he was so disorganized. At least he was honest. I realize now that another bookkeeper could have stolen money from me because I wasn’t paying close attention.”
This situation was bad but could have been even worse! When Alison decided to use Fred to keep her books, she needed to pay close attention and limit his access to her accounts and cash. More than a few business owners have lost money because of employees who were disorganized or dishonest.
The consequences of your choice
See the consequences of this choice for Alison and hear what the coach has to say.
“This turned out to be a good choice. I made sure that my recordkeeping system is easy for me to understand and maintain. I also made sure that I’m the only person authorized to sign checks or use the company credit card. Fred is good at the computer work, and that let’s me focus on other aspects of the business – without worrying about losing my cash or good credit.”
Good choice! Even though Alison decided to have Fred keep her books, she wisely restricted his access to her accounts, cash, and credit. She also made sure her bookkeeping system is easy for her – the business owner – to understand.
Click the Next button to learn how to create a business budget.