One question we often hear from prospects is, “Why should I pay you each month when I can do my financials in 10 minutes?” And it’s a fair point. We market ourselves as time-savers for the practice owners handling their own bookkeeping.
In addition to saving time though, we take pride in doing accounting thoroughly and accurately. We’re regularly surprised by the quality of work we see from other accounting professionals. New hires to our group are even surprised at the high standard we uphold, especially our commitment to maintaining accurate balance sheets.
It Takes Time to Do Things Right
Properly “doing your books” involves more than just a quick review; it requires careful attention to detail to ensure every transaction is accurately recorded and categorized.
Here’s what we mean when we talk about managing your books effectively:
- Accepting transactions in your QuickBooks feed. Since QuickBooks automatically suggests a category for each transaction, many owners might assume their work is complete at this step. However, it’s important to remember that these automatic categorizations aren’t always accurate or consistent with your specific financial needs.
- Reconcile transactions to monthly statements. While accepting transactions in your bank feed is convenient, QuickBooks sometimes duplicates or misses transactions. That’s why it’s critical to do a thorough reconciliation to ensure your financials are complete and accurate.
- Categorizing transactions. Yes, QuickBooks automatically categorizes transactions and often remembers how you’ve labeled things before. But sometimes, it can “forget” if the vendor name changes in your feed or you start using a different account to pay a bill. It takes a little extra time to make sure everything stays consistent, but it’s worth it for accurate financials.
- Split out and gross up payroll. It’s easy to transfer what your practice pays in wages, taxes, and benefits from your payroll software to your P&L.
However, netting out compensation, the practice’s portion of payroll taxes, and the practice’s portion of employee benefits between owners, associate ODs, and non-OD staff is significantly more complicated, and it’s necessary to do the optometry benchmarking we do.
- Tie out benefits to payroll withholdings. On the topic of payroll, we often help practices identify discrepancies where the wrong amount is withheld from an employee’s wages for benefits. By regularly reconciling payroll withholdings to payments made to IRA providers or health insurance companies, practices can ensure accuracy and protect both themselves and their employees.
- Tie out loan balances annually. Improving balance sheets is one of the main benefits we offer when we take over a set of books, including clarifying loan balances.
Many practices book their payments to their lenders without recording the initial loan balance. We also handle splitting out the interest portion of loans from the principal payments every year to get our clients’ books ready for tax preparation.
Just OK is OK…Until It’s Not
Optometry practices by and large enjoy healthy profitability and cash flow. When things are going well, a practice may feel comfortable with more relaxed financial tracking.
However, during times of financial tightness or unexpected emergencies, having accurate, up-to-date financials becomes crucial. Accurate and timely financials are essential for diagnosing cash flow issues and quickly navigating an urgent need to sell the practice, such as in the case of an unexpected illness or death.
If you’re looking to save time and improve your practice’s financials, let Books & Benchmarks handle your bookkeeping. We’ll provide accurate and meaningful reports every month, so you can focus on what you do best! Contact us today to find out how we can help you gain better insights into your practice’s performance and avoid potential issues down the road.
