Editor's Note: Later in today’s coffee, we’ll give you a little test to see if your Gap is covered.
We see it all the time…
A company hires a bookkeeper with some Quickbooks experience. They train the new bookkeeper in their business process, hoping for suggestions on how, maybe, to keep track of things better. The bookkeeper offers insights gleaned from the company s/he worked at before.
Somebody with no previous CI business experience helps the CI business owner (who typically has zero bookkeeping experience) figure out how to keep the books. The lack of the needed skills is called the Admin Gap.
We call the Admin discipline “counting”, as in, “counting the money”. Bad counting makes you less money than good counting. Every time.
Bad counting is not confined to small companies. A $3M+ dealer who had a tough 2016 recently wrote, “…if I had a strong "accounting" person this would have gone differently…” A $14M company we looked at is making less money than our $5M clients. They blame it on “being too big”. We know better. B-a-a-d counting!
Most Valuable Employee?
Counting is one of the six key disciplines needed in every company (see Management Triad, above). Think about it… The Admin person/dept. deals with information about every customer, every vendor, every item, every employee… every day. It’s why we recommend start-up companies make a good Admin one of their first hires. It’s why we recommend every CI have a properly- skilled person in that position.
Here are four questions, and a Bonus. Each Good answer counts as a point. 3 points or fewer indicates a significant gap. We can help (see below).
1) When were your bank and credit card accounts last reconciled? (Last month = Good)
2) Do you keep your management books on Cash or Accrual basis? (Accrual = Good)
3) Are labor revenues & wages tracked separately from Equipment revenues and other payroll? (Yes = Good)
4) Do you maintain an inventory asset and a customer deposit liability on your balance sheet? (Yes = Good)
Bonus (2 points): when the cash balance goes up, is that a Debit or a Credit? (“Don’t know” = Not Good)
3 points or less: we recommend a few hours with Jennifer, our QB Pro. She will assess issues and get you started on the path towards Good. You can order up 3 hours of Jennifer’s time at www.bi4ci.com/order.
4 points: you might be interested in our one-hour financial analysis and consultation (also $300).
And if you scored 6 points, we’d love to show you what other “five-star” dealers are achieving with a little of our Group help!