Sunday, May 20, 2012

Accounting Technique Saves Money but Scares Business Owner

When my youngest kids were still in grammar and high school, I worked as a designer for a small printing company. I loved that job. I could sit at my desk, erase the world around me, and focus on design (play) all day long. For hours I would get lost in my work, rising only to use the wash room. I rarely left for lunch, because I ate at my desk.

One day the boss came up to my desk and asked me if I would mind taking over the books. Sure, I told her, "as long as you don't mind if I use my own special accounting techniques."

She looked quizzical. 

"I like to add buffers," I explained.

At this point I couldn't tell if she was confused, concerned, or scared, so I continued, "Say, for example, I write a check for $21.25. I'll write in $21.25, but I'll subtract from the balance $22, so I have a buffer of $.75. And if I receive $21.25, I record it as $21.25, but I add only $21 to the balance so I save $.25."

She stood there for an uncomfortably long period of time while my co-worker (her son and a very good friend of mine) snickered. She finally shook her head in frustration and muttered, "Never mind."

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I could probably have saved her some grief by directing her to, an online accounting tool, but it didn't exist back then. Too bad. She could have organized all of her small business finances in one place, taken advantage of all kinds of tax deductions, from depreciation on her business vehicles, to healthcare and retirement, and I would have enjoyed the extra income. 

Outright even has an app for that.

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