How a little shoebox created a big obstacle for one small business

Every business has its obstacles, and part of what helps some business owners to succeed and even thrive is their ability to overcome those obstacles. We recently had the opportunity to help one small retail outlet overcome one of their biggest obstacles.

When we began our relationship with a small retail outlet, they explained that they were having issues with their accounting but were convinced they couldn’t solve the problem remotely. Their business wasn’t complicated, but they were on the other side of the country, from our location in Phoenix. They believed that because they were located on the other side of the country, and that they had been slowly accumulating a shoebox filled with receipts that there was no way we could get them set up and begin to help them with their books without sitting down together. And spending hours and hours manually entering transactions.

The result was that they did their own bookkeeping for months, until they on an unrelated trip, ended up in Phoenix and we were able to sit down together.

That was months where they didn’t get any help understanding their transactions, and how they could improve their business, and months where they had to fight through the mundane task of bookkeeping, instead of working on their business.

Fast forward to months later, when we were finally able to sit down together, with their shoebox and their book of signed checks.

3 hours later we had caught up a full years worth of transactions and we were discussing pricing and other higher value issues relating to their business.

Here is how we did it. And we didn’t open the shoebox at all.

A couple key points:

  • They are a majority cash based business, no liabilities, and most transactions take place through their in shop purchases, with only a few being large purchases where they were waiting on cash to come in.
  • This meant that almost every transaction ran through their bank.
  • They also, only had one bank account. Which they kept separate from their personal checking account. That was hugely important.

So, here was the process:

  1. We connected their Quickbooks online account to their bank feed.
  2. We talked out the types of transactions and what each one represented to their business.
  3. We set up rules, for the regular transactions, to help automate transactions processing.
  4. When we were left with only unidentified check numbers, we opened up the checking account and check by check attributed the vendor, and account type.
  5. Then we processed their reports, and began to analyze what we were looking at.

Although, they were very comfortable sitting in a room together and talking through the transactions. We could have done it months prior, and they could have already been making profitable changes in their business. Up to that point, they had been operating on their gut, because they didn’t have an option. Now they could log in to Quickbooks, and see how their business is performing at any time, in real time.

It took a little while, but we were happy to have the opportunity to work together and start to help their store grow.

The lesson learned is that they let that shoebox, and their belief that the job couldn’t be started without sitting down together, hold back their business growth.

Best of luck to you.

Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining legal, accounting, or other financial advice from an appropriate legal professional, financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.

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