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Why the first person I hired was a bookkeeper

11/5/2013

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COMMENTARY
Why the first person I hired was a bookkeeper
​Chris Griffiths
Special to The Globe and Mail
Published Tuesday, Nov. 05 2013, 5:00 AM EST
Last updated Wednesday, Nov. 06 2013, 12:50 PM EST

When my first small business was in its infancy, I was struggling to make ends meet. Marketing my new business and finding customers who would trust their money to a startup wasn’t easy. The bills were piling up.
I started my business as a one-man show, and as I finally started getting some momentum, my first instinct was to hire a bookkeeper.

This isn’t typical. Not at all. But it worked for me, and here’s why: Most entrepreneurs are happy to leave the day to day bookkeeping to an outside firm. Outsourcing this work allows them to focus on their natural skill sets and leave the tedious responsibility of managing invoices and receipts to someone else.

Early on, I couldn’t even afford an outside bookkeeping service, so I did it all myself. While it was time consuming and non-revenue generating, I soon learned the value of having up-to- the-minute financial data on how my business was performing. I was addicted to this information; the sales, margins, overheads and expenses were always in front of me in black and white. These numbers didn’t lie and they gave me a sober view on how I was managing my cash flow and what was driving the profit in my business.

When it came time for me to break free from those bookkeeping tasks, I already knew how certain transactions should be allocated and was accustomed to seeing it all in real time. Switching to an outside service would mean that I’d receive monthly statements, at best. In my opinion, that information was too old to act upon in a meaningful way, so I hired a part-time bookkeeper to come into the office several hours a week. This allowed me to influence how the books were organized, and meant my statements were only a few days old at any given time.

Nowadays, I rarely encounter owners who run their bookkeeping with the same level of detail with which they run the rest of their business. They’ll often get attendance records, production reports, new orders and receivable information every day, while their financials are done once a year, submitted three to six months after year end.

I think they’re missing out. As a matter of fact, I know they’re missing out because, when their margins and expenses are well documented and presented, they inevitably change their priorities.

When I talk to small business owners about the state of their finances, they typically mention about sales and cash flow. Rarely they know where their margins or expenses are relative to last year or this years’ budget – if they’ve budgeted at all.

Furthermore, when I ask entrepreneurs about the current state of their books, they often answer in the future tense. They’ll often mention a big project coming up, the seasonality of their operation or a large receivable coming due. That’s fine, don’t get me wrong. But it speaks to their instincts about what’s about to happen, not how worthwhile or successful their past efforts have been.

While a big project or busy season or large receivable are all meaningful metrics, the truth is that it’s rarely one thing that contributes to a small business’ profitability. It’s normally a hundred little things.

Where’s the best place to find the financial impact of a hundred little opportunities in your business? One place worth looking, for sure, is in your financial statements. So while I was tempted to make my first hire a salesperson, or service technician or production worker, instead I chose a bookkeeper. With real-time profit and loss statements available to me, I was able to make hundreds of intelligent decisions and changes and improvements, all of which contributed to my success.
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I know that spending time with your accountant and bookkeeper is something you normally do out of necessity. However, you may benefit from investing more of your focus into those financial statements, more regularly. You’ll see the positive influence it will have on how you run your business every day.
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To read this article on the web, click here.

Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.
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AFS Celebrates 10th Anniversary with Wine-Making Event

11/1/2013

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We thought, “What better way for AFS to toast our tenth anniversary than with a big wine-making event?” So, we invited a group of clients and colleagues to join us at Bacchus Winemaking Club in Toms River, NJ, where we completed the first and
second steps in creating our custom, hand-crafted red wine.

Together, our AFS community crushed a large box of Petit Syrah (60% of the blend) and 10 crates each of Cabernet Sauvignon (20%) and Sangiovese (20%) to create our special blend — for approximately 750 pounds of grapes. That’s a lotta grapes! We formed an assembly line and moved the crates of grapes into the crusher, which quickly lived up to its name. From there, the juice and skins were pumped into a big plastic vat. We added small, but vital, amounts of sultes and yeast to get the fermentation process bubbling. Along the way, the terric sta at Bacchus helped explain the entire process and answered lots of thoughtful questions.
We left the juice mixture to ferment for seven days. During the fermentation process, the juice sank to the bottom and a solid cap of grape skins and pulp rose to the top. The cap was manually “punched down” three times each day to extract the most avor. After a week of fermenting, the mixture was ready for pressing and transfer to an oak barrel. Gravity drew out the juice that had sank to the bottom of the vat. The remaining mixture was scooped into a wine press with buckets, where an interior bladder released the remaining juice. It was amazing to see how much juice the press extracted. These juices joined the others already in the barrel. There, they’ll age until the summer of 2014, when we’ll bottle our custom-crafted Petit Syrah blend.
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