My online coaching business handles hundreds of transactions each month. I have three different product streams and just as many payment gateways. I use multiple currencies and cross many tax jurisdictions. Reconciling everything for the tax season used to take me days and I dreaded the end of the financial year.
But last year I decided to put on my big girl pants and get all of my bookkeeping in one online system. I’d avoided doing this earlier because the local accountants and bookkeepers I’d interviewed in the past just didn’t understand what I was talking about when I mentioned Stripe or Paypal and paying people overseas in USD, etc. etc.
Then I met Michelle Knight, a Chartered Accountant of Australia and New Zealand, who runs Little Miss Bookkeeping. Michelle is a hip millennial who’s been in the bookkeeping business since 2012 and has based her business success on embracing the Cloud. She’s even created and sold online businesses herself!
I was deeply honored to have the opportunity to interview Michelle on the bookkeeping essentials that online coach entrepreneurs need to adopt in order to work smarter and gain back valuable time when it comes to managing business finances.
Watch the full 30 minute interview here or read the cliff notes version below.
In basic terms what’s the difference between an accountant and a bookkeeper?
A bookkeeper is involved in the daily grind of the business. Invoicing, reconciling income and expenses, and quarterly reporting.
An accountant is more of a high-level role that is responsible for the big picture annual reporting and tax return.
What’s the most important difference in bookkeeping for an online coach VS a traditional bricks and mortar business?
The biggest difference from a bookkeeping perspective is that online coaches are more likely to have international customers buying their products and services. Different countries have different tax laws which means fees you have to pay depending on the country the client is buying from. So it’s really important to be able to track which products and services are purchased from customers residing in your country and which are international.
What are the most common mistakes you see people making when it comes to bookkeeping?
Not asking for help because you’re too scared to reach out and missing out on the POWER that knowing your numbers gives you as a business owner.
No Systems to Scale
You don’t have the systems in place for your business to scale up. It’s more time consuming and more pressure to fix things up when you’re trying to scale. It’s easier and more cost effective to get set up properly from the get go.
Ignore Compliance Obligations
When you ignore compliance obligations you’re likely to end up owing a lot of money that you were planning on. This happens all the time with people’s tax. When you are aware of your compliance obligations you can plan ahead. For example you can set aside money each week or month in expectation of your next tax bill.
How do I know if a bookkeeper is going to be a good one for my business?
Here are some things to consider when vetting bookkeepers you interview:
- Trust your gut. Does he/she feel like a good fit?
- Check if he/she has clients from your industry.
- Do you have aligned values?
- Do you love the same tools, software, cloud based?
- Check their formal qualifications.
These questions are a bit of fun and help you get to know Michelle as a person.
What is your #1 advice for Coaches today?
Plan! Have a vision and an exit plan and get your systems in place.
What are you grateful for?
- My health. My body, my vessel, lets me do what I do, do what I love.
- My friends and family.
- My amazing team.
If you could only share 3 truths about life with your nearest and dearest, what would they be?
- You can’t pour from an empty cup
- Family and Friends 1st
- Don’t take things too seriously