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Being Organised

organisation organised May 15, 2019

Organisation is essential. Not just in your business but especially around your numbers. Putting a system in place to get a clear and accurate picture of your numbers at any moment.

I'm guilty of having papers everywhere and of having a desk that it's neatly organized in its piles, and I do know where everything is, but it's still this clutter on my desk, and today I've been forced to tidy my desk because I have a client coming in to see me and that means that I want to make the place look nice. So I have tidied my desk. I now can see the desktop and it feels so much better. I still have the papers, they're still in piles, they're just not on my desk, and when I need them I can go and get them and bring them onto my desk, work on them and then put them back again.

I was thinking about how that relates to our numbers, and it's exactly the same thing. It's about being organized and having particular places for paperwork.

If you're a paper type person, it may be that you have either a folder with your outstanding invoices in it so you can keep track of who's there and then move them out of that into the paid invoice folder when they've paid.

A folder for bills to pay, same logic, all the bills that haven't been paid are in the folder and when you pay them you move them into the paid folder. Or whether that's the online version of that where you've got the invoices in a folder that's unpaid invoices that need to be chased up, and your bills to be paid in an unpaid bills folder.

Now, theoretically, that's what your accounting system does, and reality, if your data entry is maintained, up-to-date all the time, then all your outstanding invoices are in your accounting system and you'll be able to pull out an accounts receivable report, aged report that will show you what your clients or customers owe you that's current, that's recently billed, what's a month old, two months old, three months old, over, over, overdue.

Let's face it, if it's two and three months old, it's already overdue or an over, overdue, so now we're over, over, overdue, and it's in your accounting system, it's up-to-date.

The same with your bills to pay. If you enter the bills when they come in, or your bookkeeper or your office person enters the bills every time they come in, and they're in the system, you can again see what's due to be paid now, what's overdue for payment, and have the exact position in your accounting system, and I absolutely advocate for that.

It's vital to have all your invoices and all your bills in your accounting system, preferably on a daily basis but to my mind, at worst, on a weekly basis.

I do have a few clients that have a bookkeeper that does it once a month and I find it doesn't allow the business owner to know what's happening through the month, and I've got one who has that situation and is now keeping spreadsheets of daily income, daily expense, to keep a track of what's happening in the business on a daily basis. Whereas if it was entered every day, the work in producing that spreadsheet would be eliminated.

I also get that having everything online isn't for everybody, and some of us, and I have to say I'm one of them, like to have our paper.

If you're the type of person who is happy with everything online, first of all make sure it's in your accounting system, preferably have the invoices loaded, your bills loaded up into the system with the entry so that if you need more detail, the bill's there.

A PDF copy of it sitting there to look at makes it much easier for your accountant to do their work, the bookkeeper to backtrack, or you to look back into it to work out what something was months, years down the track, so that's an important thing to do.

If you're invoicing externally to your accounting system, and I know for various reasons some people have to do that, attach the invoice, the PDF or the invoice to the accounting system. It is important as well so that all that detail that you have in your Word document or whatever else you produce out of some other system is in your accounting system as well, again, for ease of reference and also to reproduce the invoice if you need to for a client that says, "Hey, I didn't get the invoice. I can't pay it 'cause I don't have it," you've got all the information at your fingertips and your bookkeeper is able to pull that information very quickly if required.

One of the other ways of keeping things online, if you're an online person, of course, is Google Drive or Dropbox or OneNote or one of those online filing systems, and again, you can do what's being done manually. You can have a folder that is unpaid bills, outstanding invoices and then file them into paid invoices, paid bills once you have paid them.

For me I find that I do like my paper and I guess I'm a bit old school. Even though I love technology, one of the things that I find really difficult is my inbox gets barraged with emails of invoices, and I miss them.

I don't always see them. My inbox is full of all sorts of things, and so sometimes I actually miss an invoice, a bill that needs to be paid that I haven't seen, even though it is in my inbox. It might have landed in the updates or spam or ... maybe not spam, but it's landed somewhere else that's not obvious, and/or it arrived a week or so ago and by the time I'm paying bills it's buried so far down in my list of inbox that I can't find it.

So I find that, for me, printing them out, my unpaid invoices, is really good, because then I can, once a month, and I do do it once a month, once a month I pull all my unpaid bills, the paper versions, and I go through and pay them. Obviously as the payments go through the credit cards or my bank account and they come through as marked off as paid in the system, when I have them in a manual format, just because, for me, having that tactile piece of paper, it's easier for me to see what's outstanding and what's owing.

I just have a folder with all my bills in it, and, as I say, once a month I pull the folder out, go through it, check it with my accounting system, go through the payment process, whatever that looks like, however that is, whether it's BPAY or bank account or online through their system, whatever it is, pay the bills and clear the banks.

I think the key is being organized and whatever works for you, so whether it's a paper version, whether it's an online filing system that you work, or whether you just work through your accounting system, as long as it's up-to-date and everything's in it, you do have all the information there.

What's more complicated, difficult, potentially, in your accounting system is if you're paying things by BPAY, you've then got to go and open the attachment with the invoice to then collect the BPAY details and it can be a little bit more cumbersome, but there are ways of setting that up within the system so that you can batch pay and set them up within the system, so it's a little bit more work to do that, but it can pay it off in the long run.

As I say, I've kind of still got my foot in the paper camp, I can't quite become paperless. I'm a less paper person but not quite paperless. It would be nice, but I do like writing down things, I do like having that tactile piece of paper to work with.

But ultimately the key is being organized, because when you're organized, it's much, much clearer where you're at and it takes it out of your head.

Too many times I have clients coming to me stressed out no end, and the main reason for their stress is they're disorganized, they have no idea how much money they owe. They know they owe people but it's not in their accounting system, the paperwork's all over the place, some is in email, some might be printed, some goes back a few months, they don't know where it is, they don't really know what their position is.

The moment we can get their information up-to-date and in a format where they can see what it is, there's a whole level of stress that's released, and whilst the picture may still not be a pretty one and it may well be that there's a lot of work to do to sort through and get back on top of things, just by having that information readily available and knowing where they are, it allows for a plan to be put in place.

As I've mentioned in a previous post, it allows for conversations to be had with the suppliers about payment arrangements, about when and how you're going to pay them. You can't do that if you're not organized.

So have a think about what system are you using, what organization have you got in place to firstly keep your accounting records up-to-date, regularly and frequently, and secondly, what are you doing to organize your bills so you know what's outstanding so it's easy for you to pay when you need to, when they're due, and the same, what are you doing for your invoices? What record have you got for them so that you're tracking and chasing up those outstanding invoices? Which, of course, is a vital part. You're not your client's banker. If you've done the work or you've sold the product, the money is due to you and then your clients and customers need to pay you on time. You're not a banker.

So have a think about what your organization is, and if you're not organized, my challenge to you is to get organized, together, a tidy desk and papers in an organized manner or filed in a great organized manner in filing systems online or simply in your accounting system with everything attached to it.

Whatever works for you is the right system for you, but work out what that system is, put procedures in place to maintain it and keep it.


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