Are you a busy baker looking for easy accounting strategies? Look no further! These tips provide basic booking and accounting insights to help streamline your process and save you time. Learn how to master your accounting with these simple and effective strategies.
No one ever started a baking business because they loved doing bookkeeping. You probably went into business because you loved baking or pastry arts, and you wanted to make it a career. However, the other piece of reality is that there are administrative tasks in business that we have to manage in order for our businesses to grow.
I talk a lot about financial reports in the Sugar Coin Academy, but I totally understand that numbers and bookkeeping aren’t typically thought of as the fun part of the cake business. If you didn’t know, I am an accountant by trade, and I’ve helped businesses of all sizes with their financial records. It’s kind of my jam! However, given that reports aren’t “fun” for everyone, I’ve developed a few guidelines to help my clients better manage their books. So, in this post, I will be sharing a few tips to help you with your bookkeeping as well.
(1) Get & Stay Organized
I know it sounds like a simple thing, but we all know that when orders are piling up and staff isn’t showing up, organizing the books is the last thing on our minds. The great news is that there are a good number of software options out there to help you get and stay organized. Some even have a support team that will help you get set up.
My favorite accounting system is Quickbooks, but I also know folks who love Freshbooks and Wave. The thing I love about Quickbooks is how seamlessly it integrates with so many other systems. If you’re in the market for an accounting system, I recommend that you first make sure it will communicate with your existing POS and any other key systems in your business. Next, after reviewing the integration options, you should also check out the other features that will help you save on admin work. For example, Quickbooks has an app that will help you track receipts and even gas mileage. Finally, I also recommend that you read reviews, browse discussion boards and watch videos to see what actual users are saying. The support discussion boards will especially open your eyes to the good and not so great parts of any program.
(2) Create a Document System that Fits Your Style
Think of your financial records as a house, and the foundation of that house are the financial transactions related to your business activities. When you spend money and make money, you are making an impact on your foundation. Your receipts and invoices are the bricks that support that foundation. If you were to ever go through an audit of your financial records, you should be able to provide documentation to support any income or outflow of financial resources related to your business. This is why receipts, bank statements, purchase orders and invoices are all so important.
I’m not saying that you need to buy a receipt scanner or that you should download an app to help keep records. However, I do recommend that you come up with a method of keeping track of the documents that support your income and expenses. You know yourself better than anyone else. So, figure out a filing system, shoebox system, or app that will help you keep track of these important documents in case you ever should need them.
(3) Develop a Habit
If you’re in charge of your bookkeeping, you should make sure to update your records at least quarterly (every three months) but preferably every month. There are two main reasons you should regularly update your records: (1) taxes and (2) analytics. First, in order to pay your estimated taxes throughout the year, you need to know your numbers, and your financial reports will help you with that. Second, in order to make informed decisions in your business, you need to have access to accurate financial data and other key performance indicators (e.g. KPIs).
If you need to replace equipment or want to make upgrades to your bakery, you should fully understand the financial health and performance of your business. If your business has been losing money month over month because the cost of your supplies has increased, you should know that. However, if you’ve been too busy to update your bookkeeping, you could find yourself investing in equipment or labor at the wrong time in your business’ life cycle.
Similar to point number two, only you know how good or bad you will be at keeping up with your bookkeeping. I highly recommend that you find a way to form a habit around updating your books on a consistent basis. If you have a busy store front, mark your calendar with a “do not disturb” day or work it into your weekly or daily admin routine. Whatever you do, find something that works with your work style.
(4) Give It Away
As I mentioned earlier, bookkeeping and numbers aren’t for everyone. So, if bookkeeping just isn’t your thing, don’t try to force a round peg into a square hole. You should focus on your area of expertise and stick with working in the areas of business in which you’re efficient. If you want to let go of this task, you have a few options.
First, you could outsource the role to a bookkeeping or accounting company. If you already have a CPA who does your taxes, consider asking them if they offer bookkeeping services. You can also connect with a freelance bookkeeper to help you on a contract basis. Second, you could invite a bookkeeper or accountant to join your team and support you in all things numbers. Whatever you decide to do, make sure that each month you are kept in the loop when it comes to the financial reports. Any bookkeeper or accountant that you work with should provide you with financial reports on a consistent basis (i.e. monthly or quarterly) so that you can make the best decisions possible and catch any issues before they get too serious.
Cyd N. Mitchell
Business Blogger, Retail Bakers of America
Cydni N. Mitchell (aka Cyd) is a Bakery Consultant and the Sweet Business Coach behind Sweet Fest®. Based in Atlanta, GA, Sweet Fest® is an online company that supports the business needs of the Sweet Community in the areas of professional development, marketing, branding and web design.
By trade, Cyd is an accountant & financial analyst with a Masters from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. She is the Founder of the Sugar Coin Academy, an online business academy for business owners in the baking and sweets industry, and she is also the organizer of The Ultimate Sugar Show, Georgia’s Largest Annual Baking and Sweets Expo in Atlanta. She is also the Business Blogger for the Retail Bakers of America.
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