I went from spending 20 hours every month figuring out my bookkeeping to only 1hr. All I do is send Paperless Books my receipts and bank statements and they handle they rest.
Meet the Owner
Melissa is a wellness coach in Burlington, Ontario who has helped hundreds of cancer victims with their fight against cancer. Having experienced and fought cancer herself, she made a business to help those battling cancer navigate the physical, emotional, and mental stress associated with cancer diagnosis and treatment.
This wellness coach sells wellness courses to her clients. Prior to subcontracting bookkeeping, she worked alone and did the bookkeeping herself. The business is relative small and is easily managed by one person.
The owner uses Quickbooks only as her main bookkeeping tool. There is no payroll and as a sole proprietor, she files HST/GST at the end of the year. She also uses stripe as her payment gateway, and Digital Course Hive to manage invoices.
As her business grew, she was looking to outsource bookkeeping and as other business tasks. This would allow her to focus more time on growing her business.
The Challenge
When Melissa approached us, she described her need to grow and make more money. In order to do this, she needed a way to outsource some of her tasks, get clear on her finances, and reduce the time she spent on bookkeeping.
She mentioned she spent over 20 hours on bookkeeping. Most it was figuring out how to properly categorize transactions, and assign the correct tax amounts. She also was not sure about what she had done in the past and needed a review of her previous bookkeeping work. Because of her lack of bookkeeping knowledge, she was not able to generate monthly financials to track her growth. Lastly, filing taxes was a challenge because she didn’t know how to setup and properly assign taxes sales taxes for both her sales and expenses.
Melissa finally understood it was time to hire an expert who could manage her bookkeeping so she could focus on business growth.
The Solution
There were a few bookkeeping goals needed to be reached with Melissa’s business. These included the following:
- Catch up and review prior month bookkeeping
- Properly setup sales taxes
- Fully manage bookkeeping
- Reduce time spent on bookkeeping by about 90%
- Produce monthly financial reports for the business
- Maintain bookkeeping on a monthly basis
We used 3 main steps to solve Melissa’s problems. These were onboarding, learning and maintenance.
Onboarding Business to Paperless Books
The first phase of solving Melissa’s problem was to onboard her. For us, this meant understanding her business flow, and adapting it as our own. At this stage, we gain access to all the software and accounts that make her business run. We then analyze how each software and account communicate with each other in order to optimize them.
We started the onboarding by gaining access to her books. This included access to Quickbooks, Digital Course Hive, Stripe, and CRA account. We also agreed on a way to share documents. The majority of the time in onboarding was spent optimizing Quickbooks.
Learning About The Business
Once we’re set up with all the necessary accounts, we started with reviewing prior months bookkeeping and also caught up with outstanding bookkeeping months.
Review and Cleanup of Quickbooks
First, we started our review with the chart of accounts to make sure that all relevant accounts have been set up correctly. While doing this review we noticed a few misplaces categories and corrected them accordingly. We also noticed the sales tax module in QuickBooks was not turned on, and so we turned it on, and set up the correct taxes for her business. Since her sales were made throughout Canada and worldwide, we set up sales taxes for all provinces.
A crucial part of setting up sales tax was making sure that the correct sales tax were being collected on sales. Unfortunately, this was not done using the sales collection platform, Digital course hive. We instructed Melissa to collect sales taxes on the digital course hive platform, based on the locations in which the clients made the purchase. This allowed the collections of sales tax to be automated and more accurate. Unfortunately, we would not be able to adjust any incorrect sales taxes that were collected prior to on boarding Melissa. However, she can be reassured that accuracy was taxes will be collected on sales moving forward.
Once the sales taxes were properly set up, we started review of prior months bookkeeping and also completed any prior month cleanup or catch-up. We completed a years worth of bookkeeping cleanup.
Establishing a Monthly Bookkeeping Workflow
Once the cleanup is done, we wanted to establish a flow that will allow us to properly account for sales and payments in Quickbooks. Since sales were not captured in QuickBooks directly, this is what we did to bring sales and your relative payments into QuickBooks.
First we would have to download every invoice created in digital course of every month and upload them into QuickBooks. From there we would download the payments from stripe and upload them into QuickBooks as well. By doing this, QuickBooks would automatically match each invoice to each payment. This also reduced any chance of manual data entry, and somewhat automates the reconciliation of sales and payments. Since stripe and digital course hive were not able to directly integrate with QuickBooks, this was the best method proposed.
We also had to sort out how to match source documents to transactions coming in from the bank. For this we used the receipts module in QuickBooks. Melissa was instructed to upload any receipts she wanted to claim into QuickBooks using the receipt module. Our team would then match the receipts to the transactions coming in from the bank feed. This ensured that documents were securely attached to each bank feed transaction for audit purposes.
For bank statements, we asked Melissa to upload the bank statements each month to the Google share drive. These would then be used to reconcile various bank accounts in QuickBooks.
If there were any questions or team could not answer, a list of questions would be sent to Melissa once a month to review and get back to us with the answers.
This entire process with them, repeat every single month.
The Result
The changes we made to Melissa’s monthly bookkeeping workflow, allowed her to do the bare minimum when it came to bookkeeping – sending us documents so we can handle it. She no longer has to spend hours figuring out whether her books are done right or wrong. By outsourcing her bookkeeping to professionals, she can now confidently receive monthly financials and get a clear picture of her business health.
The below describes summary of how Melissa’s bookkeeping was before versus how it is after outsourcing to people as books.
| Before Outsourcing to Paperless Books | After Outsourcing to Paperless Books |
|---|---|
| No reports to assess financial health | Monthly financial reports |
| Over 20hrs doing bookkeeping | Only 1hr per month sending source documents |
| No source documents attached to transactions | Source documents attached to every transaction |
| Sales invoices not tracked in Quickbooks | Sales invoices tracked in Quickbooks with payments |
Melissa reshaped how she viewed bookkeeping. In order for her to grow, she needs to see bookkeeping as a tool to monitor her financial health. Not as a time consuming task for her business.
By outsourcing her bookkeeping to Paperless Books, she is now able to receive monthly financial reports that allow her to monitor her business health. No longer is she spending hours navigating bookkeeping. Instead, that time can be spent growing her business. Her books are now audit ready as each source document is attached to a transaction in Quickbooks. We can also easily pull sales reports from Quickbooks now that sales are imported into Quickbooks.
At year end, Melissa can result assured, all her numbers have been reviewed and are ready for tax filing.
Why Monthly Bookkeeping Matters
Monthly bookkeeping is crucial part of every growing business. It positions the business in a place that allows the business to consistently assess health and growth. This in return allows business owners to make sound decisions. In Melissa’s case, confusion and the lack in trust of her financial numbers kept her stick. Now she is clear on what is required and need for growth.
Having a properly organized bookkeeping routine also allows the business to be compliant and audit ready. In the past, Melissa was not keeping source documents with her transactions. Now, by using Quickbooks receipt module, she can bundle each receipt with a transaction for proof of purchase.
The combination of having a organized and clear financial insight makes it easier to file accurate tax returns.
If you are stuck with bookkeeping and unsure of how to get a grasp on your business bookkeeping, visit paperlessbooks.ca for a free consult.