On this episode of the Tech Talk for Accountants Show Andrew is joined by Will Keller of Scooter Accounting to talk about small business accounting and some of he problems small business face when it comes to accounting. You can listen to the show below or anywhere you listen to podcasts. You can also watch the conversation on YouTube and read the article below.
What’s Scooter Accounting?
Once Will became a CPA, “paid my dues” and got his 500 hours of auditing in he thought about doing his own thing. “Or at the very least I wanted to pick up a few gigs on the side for pocket money,” he said.
“I knew I didn’t belong in the corporate world and wanted to work with QuickBooks-based businesses,” Will said. “Helping them fix their problems and everyday accounting operations.”
He mentioned that he didn’t have a master plan and found jobs on Craig’s List to get started. “This was when Craig’s List was relatively new and that’s where you’d go to find part-time jobs, he said.”
Will started diagnosing QuickBooks problems for his clients and started asking “can I start a practice here and leave my job?” It wasn’t a quick process to make the transition with two kids at home. “But starting my own practice percolated in the back of my head for 5-7 years.”
As his children grew older and needed him less, the name Scooter Accounting came to him. “I knew right away it was the perfect name because it was fun, different and it embodied the type of accounting approach that I believed in.”
The pillars of his strategy are:
“There was nobody near the name Scooter Accounting. There was open water in all directions,” Will said. “So I filed my trademark, grabbed the name and I started wire framing a website in my head.”
Names can have stories, like Will’s. Andrew shared that Rush Tech Support was born after he brainstormed ideas for names that represent our values of speed and reliability. RushTechSupport.com – our original website – was available to register and the brand was born.
“Company names come from many different places,” Will adds. “It has to feel right. Somehow it has to click.”
What are some of the recurring accounting problems small business have?
“Working with the small business accounting market is nonstop chaos,” Will said, adding that small businesses are struggling with many accounting problems. “It’s everything.”
He said that the majority of businesses do a “horrible job” with their accounting and make mistakes.
“That’s not because small business owners are stupid,” Will said. “In general entrepreneurs are sharp, intelligent and self-motivated.”
The main reasons accounting in small businesses is hard: “They are so busy with other things and they put little to no thought into it,” Will explained. Designing their accounting system takes time.
“Usually they get a copy of QuickBooks or Xero of Freshbooks or whatever platform they decide to use,” Will said. “They hire the cheapest bookkeeper they can find or hand it off to their admin assistant. They don’t really have any strategy at all.”
Consider the right mix of accounting apps
The top mistakes small businesses make in accounting
Choose the wrong tools
That includes the wrong software, wrong merchant account, wrong payroll service, wrong point-of-sale system, etc. “Today it’s really 50 percent accounting and 50 percent technology,” Will added. “And you have to be good at both.”
You need to pick the right tools and configure them correctly from the start.
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“Sometimes the carpenter is blaming the hammer,” Andrew added. “Most it is flying by the seed of the pants and it’s not taught in school.”
“Technology is critical today and it sometimes make me nauseous to see how much technology is involved to get our jobs done,” Will said. “But nonetheless if you don’t have your technology set up correctly from the start, things can get messy.”
Will mentioned that there’s a tendency to take accounting for granted. QuickBooks is so good that the skill of accounting can be easily overlooked.
“The reality is that accounting takes a really long time to get good at,” Will said. “I couldn’t do a good job with bookkeeping tasks until I was five years in the seat.”
Accepting technology recommendations
Andrew shared the case of accepting technology recommendations but some items were overlooked and weren’t realized until 18 months later.
“It’s not just a case of ‘the bank account is bigger, I’m doing well’,” Andrew said.
Will mentioned that the story Andrew shared around the 13 minute mark is very common for small businesses. They get a software tool and think that tool will do all the accounting for them.
“If you do know how to use it correctly it can do a lot of the work for you,” Will said. “The problem is it’s very difficult to set up.”
There’s a learning curve with new software. It makes recommendations that you may or may not want or even need. There are build-in upsells.
Incorrect setup of software tools
Once you have picked software tools – we hope the right one – it’s often not being set up correctly. “The idea that QuickBooks is easy to use is a bit of a false promise – you have to have an accounting background,” said Will.
“Security threats are coming from all directions,” Will said. “Just last night I received two new spam texts on my phone. You really have to constantly be vigilant. And you need to have somebody like Rush Tech that can advise you. Most of us don’t necessarily always have our guard up.”
Understand the cost
As they say you get what you pay for. Will said that CPA hourly rates can range from $150-$300/hour or much higher depending on the firm.
“But you have to remember that a tech-savvy accountant can get the work done 10 times faster,” Will said. “So your total cost will still be lower.”
How can you find a good accountant?
- You want to choose a firm that does outsourced work.
- Work with somebody who specializes in the software that you use or want to use.
- Do you like them? Can you get along with them?
“Are they listening to your problems?” Will said. “At the end of the day you want somebody who has a good reputation and does the job better than you can.”