Administration – Sequoia Business Solutions

How to Adopt a Business Document Formatting Uniform and Why it Matters

If you don’t already wear a uniform to work or to school, can you imagine for a moment what it might be like to remove that level of decision-making from your life? You could wake up in the morning and never have a thought about what you’re going to wear. Your clothes would already be chosen. You could reserve a few more brain cells to find the coffee pot and meditate on how great your day is going to be rather than staring at your clothes, willing them to come together.

This is what it’s like to define a uniform format for all your business documents. Every time you create a new internal or external document, rather than wasting time staring at all the formatting options, you and everyone else in your organization can bust out a pre-defined format and move on to the real work of writing the actual content for that document.

Not only does this reduce the barriers to getting the document produced, it also reduces the brain power needed to find and recognize the document in the future. The ability to identify documents created by your business should be instantaneous. Anyone inside or outside your company should be able to recognize it. This is done simply by defining and enforcing a standard:

Margins. Keep it simple. A one-inch, all-around margin is any easy standard for document formatting and it’s easy to remember. If the majority of your internal documents are lengthy and you want to save on paper in the long-run because you must maintain paper copies, then feel free to adopt a half-inch standard margin.
Logo. Including your logo on all your documents is a sure way to easily identify everything created by your business; however, I don’t recommend including a photo-realistic logo on every document. The possibility of your logo devolving into a pixelated, unrecognizable mess is very real, and the perceived professionalism of your business will suffer both internally and externally. Guard your logo with your life. Never allow it to appear smaller than three-quarters of an inch (3/4”) high or less than 150 DPI (dots per square inch) when printed. I recommend using a single-color, un-shaded version if you have it. If it doesn’t look clean when it’s printed or exported, then you must use a higher quality image or simply leave the logo off the document.
Company name. Unless your company name is included and easily read in your logo, then you should include your full, legal name or DBA on all your documents. This should be the name your customers or clients will make their checks payable to, the name your vendors will bill, etc.
Page numbers. It really doesn’t matter where this goes on the page as long as you’re consistent. Any document longer than one page should have page numbers. Ideally, it should also include how many pages are in the whole document (e.g. “Page # of ##” or simply “# of ##”). Dropped documents and orphaned pages happen. Do everyone a favor and number them.
Contact information. This seems obvious, but any relevant contact information for the decision maker on the other side of the document is crucial to smoothing out communication wrinkles. The added step of looking up an address or an email or a phone number to resolve whatever decision needs to be made regarding that document should be eliminated from all your business processes.
The freaking date! This might be my biggest pet peeve about business documents in general. It is staggering how many documents I review that simply leave off the date; as if these documents could be used as a reference to apply to all of human history. The date is crucial in accounting and often makes or breaks a legal argument. When was the document created? When was it signed? What time period does it apply to? All good questions. Please answer them when you create your documents.
Font. If you use proprietary software that has default format settings that can’t be altered (such as font type and size), then model your standard font off what you can’t change. For example, QuickBooks Desktop uses Arial for all its reports. Rather than choosing a different font for your internal documents and forever fighting with QuickBooks to change its ways, join the blase majority and adopt the Arial uniform.

Obviously, you can create templates that have these standards defined and you should; however, if your company or organization has existed for more than a day, it has probably already generated documents that don’t wear your shiny, new, well-defined formatting uniform. This is why I recommend that you distribute a one-page reference sheet to everyone in your organization with the defined standard.

In order to implement the update within your organization, you should campaign on two fronts. First, if your organization is small (less than ten people), teach everyone how to change the margins in the software they use, how to update a header and footer, how to insert page numbers, how to change the fonts, etc. Google training videos to make the training easier, and make sure everyone is clear on what the standards are and how to update old documents to match. Set a date and from that day on, not a single document should be printed, exported, emailed, saved, or in any other way generated that does not follow the standard.

Second, I recommend that you gather, review, and revise all the key documents in your organization before the roll-out date (e.g. invoices, sales orders, business cards, letterhead, envelopes, requests for time off). This will reduce the mass chaos in implementation. (Okay, it’s really not that dramatic, although you may find some nay-sayers pitching a fit over the change. It’s hard for some people. You’ll have to plan on being patient, but also firm.)

If you’re concerned about getting your team on board, then make it clear how critical your brand is in today’s business environment. It takes a decision maker a fraction of an instant to decide whether your organization is legitimate and trustworthy. Do you really want to continue to allow that decision to made against you and for your larger competitors (who are already do everything I’m talking about, by the way) all because your fonts and margins are jacked?

In the scheme of all the things that could possibly harm your business this is probably the easiest to fix. Not only that, but it will have a positive, long-term impact on both your company culture and on the external perception of what you’re trying to accomplish.

That’s it! If you need help, it’s literally what I do for a living. Let me know when you’re available and I’ll get in contact with you.

Bookkeeping

How to Organize Your Statements

If you already have a system to keep all your bank and loan and credit card statements organized, I have to applaud you. If you’re like most, non-accountant small business owners though, your statements are probably dispersed between your desk, the glove box in your car, your kitchen table, and that file folder you created when you first started.

Believe it or not, the fact that your financial information isn’t organized is adding to your stress. It may be a low-grade worry that cringes every time you think about trying to get things together for your tax person at the end of the year. Or it may be something that keeps you up at night because you really don’t have a solid grasp on what’s going on with your finances.

As a consultant, here is the process I go through when I get a small business organized.

Order Supplies. Unless you have a paperless office, I suggest that you start with a two-inch (2″), three-ring binder and a set of monthly tabs (Jan-Dec). (You can always get a wider binder if you need more room.)

Create a Checklist. Next, you’ll want to setup a worksheet with your accounts listed down the left and the months listed across the top. This typically looks best in a landscape orientation. You’re welcome to download and customize the basic Excel spreadsheet I designed for this.

Reconcile Your Accounts. If you don’t know how to reconcile your accounts or you don’t think it’s necessary, please visit my walk-through post. Once you’re done reconciling the account, staple the reconciliation report(s) to the front of the statement, and file them in the appropriate month, based on the statement ending date. For example, your bank statement that ends June 30, 2018 and your credit card statement that ends June 18, 2018 will both be filed under the June tab in your binder. (Yes, you also need to reconcile your credit cards.)

Run Your Financial Reports. Once all your accounts are reconciled for the month, go ahead and run the basic financial statements:

Profit & Loss Report (also known as an Income Statement)
Balance Sheet
Statement of Cash Flows

File these statements in front of all your account statements and their reconciliation reports.

Review Your Financial Reports. Take a look at your financial statements and choose at least a few numbers to keep a close watch on. These are called Key Performance Indicators (KPIs) and they can form the basis for business goals. For example, if you’re in a manufacturing industry, depending on your field, you might want your gross profit (total income minus cost of goods sold) to be about 40-60% of your total income:

Income: $10,000 (100% of Income)

Cost of Goods Sold: $4,000 (40% of Income)

Gross Profit: $6,000 (60% of Income)

You also might want to keep an eye on discretionary expense accounts like “office supplies” and “meals”.

Relax.Once you get used to the process, this might only take you an hour a month to complete. The payoffs are well-worth the time investment. First of all, you’ll have a much better idea about how you’re doing, financially. Next, you’ll be ready to do your taxes… early! Also, you will have all your account statements in one place if anyone ever needs to see them (banks, loan officers, auditors, etc.). And finally, you’ll eliminate the stress associated with being financially disorganized.

That’s it! If you need help, it’s literally what I do for a living. Drop me a line and I’ll get in contact with you as soon as possible.

Bookkeeping

How to Reconcile Your Accounts and Why

With online access to bank and credit card accounts, I am seeing a massive departure from the standard business practice of reconciling accounts on a monthly basis. It’s an easy trap to fall into and the fees (bank fees) can be extraordinary.

If you have business checks or if you have costs that automatically come out of the account you use for business, you need to setup a bookkeeping system. No matter how good you think your memory is, the fact is that at some point you’re going to forget about the check you wrote for supplies or (yikes!) rent or the EFT you setup to pay your insurance it’s going to clear the bank on the worst possible day.

Like the day you land an awesome contract and purchase a bunch of supplies to get it done (because your online bank balance says there’s enough in there) and there’s a whopping $1,000 left in the account. All it takes is a few lagging transactions to eat up that buffer and land you in the hole. I’ve seen this happen hundreds of times, and it always results in overdraft fees and non-sufficient funds (NSF) fees.

The bank might work with the business owner once or twice if this happens infrequently, but at a certain point the bank stops refunding the fees and the owner has to eat the costs for the bank to cover the account.

Talk about taking all the fun out of “making a living”.

The solution to this maddening cycle is to keep a check register. If you want to go old-school, then pull this sucker out of your box of checks:

It’s fairly self-explanatory. Enter the date, the check number (of EFT for Electronic Funds Transfer), the payee (the name of the person you paid or paid you), the amount of the payment or deposit, and the ending bank balance. If you’re somewhat computer savvy and want to kick it up a notch, use Excel or Numbers, or Google Sheets to keep track of your transactions. You’re welcome to download and customize the basic Excel spreadsheet I designed for this.

If you find you can’t keep up with the number of transactions going in and out of your account(s) and you keep missing things, I would recommend setting up a bookkeeping system in QuickBooks or Quicken that can automatically link to your online bank account to be sure you’ve entered everything.

Regardless of what system you use to keep track of your transactions, you will want to compare what you’ve recorded with what appears on your bank statement at least once a month. The easiest way I’ve found to do this is to layout the record of what I’ve recorded (the check register) side-by-side with the monthly bank statement.

Start with the oldest transaction you recorded and see if it appears on the bank statement. If it does, then highlight it on the bank statement and in the check register. If it doesn’t appear on the bank statement, then circle it in the check register. Likewise, if it doesn’t appear in the check register, then circle it on the bank statement. When you’re done with this step, you’ll have something that looks like this:

Next, you’ll want to add any transactions that cleared the bank that aren’t in your register. In other words, you’ll want to enter the transactions that are circled on the bank statement in your check register.

Then you can highlight it in the register:

Enter Missing Transaction from Bank Statement in the Register and Highlight

and on the bank statement:

2018-07-29 Bank Reconciliation e.g. 2 zoom 2 — Highlight the Missing Transaction that’s Now Entered in the Register

To check your work, take the bank statement ending balance, subtract any circled payments in your register, and add any circled deposits. These are known as “outstanding” or “uncleared” checks and deposits:

2018-07-29 Bank Reconciliation e.g. 2 zoom 3 — Circled and Not Highlighted Means it’s an Uncleared Transaction

Reconciliation Report

Bank statement ending balance: $8,340.00

Uncleared checks: $800.00

Uncleared Deposits: $0.00

If the register balance you calculate matches your actual register balance (see highlighted below), then you’re done! You’ve reconciled your account “to the penny” as bookkeepers and accountants are fond of saying.

2018-07-29 Bank Reconciliation e.g. 2 zoom 4 — Resulting Check Register Showing the Balance that Matches the Calculated Balance

If it doesn’t match, you will need to go back through your transactions to be sure everything actually matched-up. Here are a couple tips about resolving bank reconciliation differences:

If you’re lucky, you might be off by just one transaction (e.g. you’re off by $35.49, which happens to be the same amount as the gas you bought on the 18th).
If you’re off by a number that’s divisible by 9, then one of the numbers in your register might be mistakenly transposed (e.g. 89 instead of 98 or 54 instead of 45).

That’s it! If you need help, it’s literally what I do for a living. Drop me a line and I’ll get in contact with you as soon as possible.

Training

Now You’re a Teacher

If you’re spending more time than you have to spare on training new employees, you might consider setting up a standard operating procedure for the tasks that employee needs to perform. I’ve seen the learning curve shrink in half by implementing this solution that many small business owners think is just for big, corporate companies.

When I first started training employees one of my biggest pet peeves was that they didn’t take notes. Here I was taking time out of my crazy schedule to show them the ropes and they would sit there with a glazed-over, deer-in-the-headlights look and nod their head after I walked them through each skill. “They’re never going to remember this,” I would think.

At the time, I told myself that it was their responsibility to take control and take the initiative and do their best to learn their new job. Then I had to realize that not everyone likes school. And that’s what learning a new job is. It’s going back to school. And what does everyone get when they go back to school? They get a syllabus and course materials and resources and an instructor with office hours.

Thus began the migration of my love for learning to my love for teaching. My first iteration was a simple outline of the tasks. As I trained more, I added steps to the outline. Then I added more detailed steps. Then I included screenshots. After four years of training being a large part of my full-time job, I had published step-by-step instructions for well-over 200 procedures.

Every time I trained a new employee, I would walk through the steps and revise them as needed to be more helpful, more descriptive, more explanatory. The trick was to format them in such a way that veteran users could breeze through them more quickly. There were tasks that came up only once a month or once a quarter or even once a year. By describing the process briefly (e.g. Step 1: Run this Report) and in detail (e.g. Go to Menu > Reports > Quarterly Report > Dates: Last Quarter, Accounts: Expense Account) I was able to meet the needs of long-time users, first-time users, and everyone in between.

After my transition to small business consulting, this process became invaluable. I started writing standard operating procedures for every system I put in place. These step-by-step instructions are usually kept in a binder with tabs for the task frequency (i.e. daily, monthly, quarterly, yearly, as needed). I’ve also published them in folders on servers, where everyone can access them. For those with Microsoft Exchange Servers, I’ve published them in shared folders in Outlook.

The key is to make the policies highly accessible and to preach their daily use. After all, there’s no point in spending the time to write them if no one is going to use them. If anyone asks you how to complete a task and you know there’s a written procedure for it, ask them to use the instructions. If they still have questions, walk through the instructions with them and revise as needed. As we all know, it’s easy for a teacher to gloss over finer points and to assume everyone knows what they’re talking about.

Try not to get frustrated with the learning process. I realize you didn’t sign up to be a teacher when you decided to start a business, but it will become part of your job description as soon as you hire your first employee. You must teach and teach well if you truly want your employees to partner with you.

That’s it! If you need help, it’s literally what I do for a living. Drop me a line and I’ll get in contact with you as soon as possible.