I pulled the plug on another CPA. Frustrated by inefficiency, I found myself once again employed as the bookkeeper of my own company - but I hardly ever showed up for work. I had a backlog of nearly a thousand transactions in QuickBooks, five months of credit card statements to reconcile, and despite going to business school I’m still a little fuzzy on the whole debits and credits thing.
This is not what I signed up for!
I’ve been here before. First was the local bookkeeper. Very friendly, but her system of putting receipts into envelopes by month was impractical at best. Then, the outsourced CFO. He had me remotely log into a version of QuickBooks running in his office 2,300 miles away. But I could only log in if he wasn’t using the computer.
I tried hiring my H&R Block guy during the off season. I asked friends for recommendations. I sat through horrible introductory phone calls where I was schooled on Cash vs Accrual accounting. Ugh.
Well, after 13 years as a small business owner, I finally cracked it. Here’s how I automated accounting, canceled QuickBooks, and got back to business.
Step 1: Go Paperless
I can remember so many years that ended with me on the floor of my office - papers stacked wall to wall, highlighters and markers rolling everywhere. What starts as a nice pile on your desk in January grows into a dense forest by December. So, step 1 is to go paperless.
Receipts, documents, business cards - all there and available on all of my devices. Evernote uses text recognition to make everything that I scan searchable, so I can always find what I’m looking for.
For bank, credit card, and utility bills and statements, I use FileThis. FileThis automatically downloads the documents as soon as they’re available and saves them straight into Evernote. Magic.
Step 2: Outsource the Work
Now, once you have all of your important documents organized and easy to find, you’ll need someone to take the work off your hands. Bench is the obvious choice for bookkeeping. It syncs to my banks to download every transaction, and my dedicated bookkeeper is always there to answer any questions that pop up. Bench provides my monthly income statements and keeps my balance sheet up to date so they’re ready for me to review whenever I want.
Bench replaced most of the functionality that I used in QuickBooks, but I still needed a payroll solution. For that, I found Gusto. Gusto sets up in minutes, connects to your checking account, and walks you through adding a few previous pay stubs so that your year-to-date information is correct. It also handles all of my 1099s, W2s, and other state and federal form filing.
Step 3: Automate
Here’s where it gets awesome. First, Gusto has a feature called “AutoPilot.” Turning that on means payroll is automatically processed without even logging in or pressing a button. And, to make sure there is always money in the checking account, I set up an auto-transfer with my bank that occurs a few days before each payroll is run.
Next, I went into Evernote and created public links for the folders that contained my bank and credit card statements. I shared these links with my Bench bookkeeper, so each month he can download my statements as soon as they’re available to complete the reconciliation of my accounts. FileThis puts them in, and Bench takes them out.
Last, Bench recommended a tech savvy CPA that works both in their system and in Gusto. So, come tax time, he has all the access he needs to prepare my returns.
Step 4: Finishing Touches
Beyond going paperless, automating payroll, getting monthly statements, and keeping my books up to date, there are a few other little tricks that I use. My bank, Simple, has a feature that allows me to set a recurring bill pay. I use this feature for consistent monthly bills that don’t accept online payments (like janitorial or landscaping services).
For expenses that vary from month to month and don’t accept online payments, I set up filters to auto-route email bills to my virtual assistant at Fancy Hands. Fancy Hands can make payments on my behalf and charge them to my credit card on file, which is extremely useful.
To track my mileage deductions, I use MileIQ. This app uses location awareness on my phone to remember where I’ve driven. Then, I can categorize the drives as business or personal with a simple swipe.
Set It, But Don’t Forget It
Automating accounting using this process has saved me 5-10 hours per month, easily! But more importantly, this system keeps everything in order so that when I do tune in, I can make useful insights and informed decisions. Instead of wasting time tracking down papers, paying bills, and making phone calls, I can sit down for coffee and take a quick look at my financial statements and account balances.
Accounting is such an important part of business. I just want as little to do with it as possible.
Chris Ronzio helps entrepreneurs organize chaos and get things done. Download a free copy of his latest ebook, 100 Productivity Hacks to Improve Your Business, here.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.