In this episode, Tim joins the podcast to share insights into bookkeeping and financial management specifically tailored for Managed Service Providers (MSPs). The discussion covers common challenges faced in the MSP market, tips for effective bookkeeping, and the importance of accurate VAT returns. Tim emphasises the role of timely bank reconciliations and cash flow management. She also offers advice on setting up a detailed chart of accounts, making use of automated tools in accounting software, and understanding prepayments and journal entries. The episode aims to provide practical tips to business owners for better financial management and decision-making in their businesses.
00:00 Introduction and Episode Overview
00:59 Tim’s Background and Experience with MSPs
01:43 Common Bookkeeping Challenges and Quick Wins
02:52 VAT Returns and Common Mistakes
08:37 Importance of Timely Reconciliation and Reminders
11:31 Managing Supplier Bills and Cash Flow
15:32 Improving Management Accounts
22:34 Automating Financial Processes
25:17 The Role of Journals in Accounting
29:19 Conclusion and Contact Information
Listen on Spotify or Apple Podcasts
Connect with Tim Hoskins on LinkedIn by clicking here –https://www.linkedin.com/in/timea-hoskins-11b022a6/
Connect with Daniel Welling on LinkedIn by clicking here –https://www.linkedin.com/in/daniel-welling-54659715/
Connect with Adam Morris on LinkedIn by clicking here – https://www.linkedin.com/in/adamcmorris/
Visit The MSP Finance Team website, simply click here –https://www.mspfinanceteam.com/
We look forward to catching up with you on the next one. Stay tuned!
Transcript
Tim: [00:00:00] Tim,
Daniel: welcome along.
Tim: hi. Hi. Thanks for having me.
Daniel: you are, you’re very, very welcome and, we’ve been threatening this for a little while to bring you onto the podcast and, yeah. we’ve, I think we’ve got a really interesting, episode ahead for our listeners.
Obviously there’s a little bit of self-promotion, shameless self-promotion in this for us, as, as Adam will have explained at the beginning. but, equally, we all agreed that we’d like our listeners to leave with some value from this in by way of,o f a tip or, something for them to look at in their own business that perhaps they wouldn’t have done before. So, in, in terms of getting us started, Tim, perhaps, we could, we could actually just talk about some of the, the situations that you’ve encountered, in working with the, the MSP market. Perhaps some quick wins that were established in the early stages of, of, of providing bookkeeping coaching.
Tim: Right. Okay. yeah, sure. Let’s, yeah, let’s give it a go. So, gosh. well, my, I mean, my [00:01:00] experience with MSPs actually started, a long time ago. and, I’ve, I. Sort of fallen into it from, the accounting perspective. I’ve been in accounts, positions, all of my life and obviously accounts backbone of, the finance of what a company’s doing, and with the systems.
So then naturally you get involved, in that. And, and then for my sins, I then actually went to work for, an MSP provider. Um, so I hope I have an understanding of, what the, What the industry is, what people need from it, what their challenges are, from that. And so obviously what information we can help them to get, from their accounting systems that’s gonna help them alleviate those, challenges and that those sort of day-to-day systems, that they have.
so yeah, so with obviously the tutor, we, it’s guys that wanna do their own bookkeeping and we will, help them, with sort of identifying maybe some of the processes and procedures that they might not be doing that maybe they should be doing, that’s gonna help [00:02:00] them. and also, you know, I understand that they’re very, with the computer elements that, that they’re doing, the services they’re providing, and bookkeeping, and dealing with books just in general, is always a little bit daunting.
And I think, you know, we all kind of have an ostrich moment, don’t we, where we put our head in the sand and kind of thing, oh my God, I can’t do this. so I think it’s kind of nice to have, someone there that, you know, you can talk to, is a bit like that sort of, live support. that you don’t always get with an IT package.
and the questions. And sometimes you feel like you can’t necessarily ask, your accountant because, you know, you, you maybe only have interaction with them once or twice a year and stuff, you know, so, so hopefully, we provide that. So, let me think. Situations that we’ve had, well, some of them have been like kind of, quick, easy wins and stuff on there.
So, we will, as part of what we do, obviously we’re gonna go through some of your, regular transactions, things that you need to do. One of those, is for most of us, unfortunately, filing VAT returns. So, we will start to look at the VAT return. [00:03:00] And go through and make sure that the different, component parts, the different boxes, show what they should show, for you that you’ve got the right transactions in the right, elements in there that it all looks, it looks, you know, correct and present. and with one of these guys, we noticed we were looking at, The, amounts that we’re showing in the, Xero box because it’s not only looking at what’s in box, you know, your sales vat and your purchase vat, but also actually what? Are you not putting in? What are you not claiming for? And and we noticed that there was, actually a high volume, just for that particular quarter of bills that were, related to, telephone sales and stuff. So mobile phones, things like that. And, he was just posting those. Without that at all. rather than, because it was just kind of like quick he was just saying, you know, it comes on the reconciliation tab on my bank rec.
And, and I just quickly post it. the system prompts where to post it to, so I just quickly post it to telephone. I didn’t even notice that it wasn’t picking up. [00:04:00] That element for it. So, so we went through and, found these transactions and we were able to, quickly actually correct those for him and, and claim back the vat, not just for that period, but obviously prior periods as well.
So, so that was a nice adjustment, to the vat return for that quarter for him. And, and hopefully going forward, he’ll remember to, to look at some of the other bills and see, you know, actually what should I, shouldn’t I have
Adam: Just out of interest, Tim, how long are you able to go back in time?
Tim: to collect?
Adam: VAT.
Tim: So you can collect that, like if you’ve, Honestly not put, something through that you should have put through. Then, you can go back up to four years depending on what the services are, that are in there for, for your business. And if it’s still something that’s being used by the business and utilized for the business purposes.
In this case, it was a business mobile phone. So, yeah, so you can go back and you can adjust and HMRC are quite happy, you to, you know, claim for things that you. Inadvertently didn’t notice that you should have [00:05:00] done, obviously provided that you also make sure that you do, you know, be honest about stuff that you maybe did claim and you shouldn’t, and you
Adam: Sure. and so this was going back more than a year, I’m assuming.
Tim: It was probably, I think he had probably had the contract, it was around about 18 months
Adam: Okay. So, so, so in other words, you can’t just rely on your accountant for year end, just to pick this stuff up.
Tim: No, absolutely. I mean, the thing is that obviously, you know, there is so much information. If you think about the transactions that are in someone’s books that an accountant might be looking at, generally, they’re gonna kind of come in at top level and look, at the surface of what you know. What the allowances are, and what you are allowed to claim for or not. from a, is that a legitimate business expense or not, perspective. They’re not gonna obviously analyse every transaction for you and have a look and see, you know, did you claim all the, that you should have done? Yeah, absolutely.
Daniel: It. and this is, I guess one of the, one of the common misconceptions, especially, at the. the, small end of, compliance accounting where, effectively [00:06:00] it, you are producing unaudited accounts. so there is no interrogation, no deep dive. if, if an accountant happens to notice something chunky and think, oh, I would expect there to be that on that. maybe they dig and uncover it. But, gen generally they’re, they’re trying to compute, the. an approximate, number for corporation tax and for producing the statutory
Tim: hundred percent. Yep. Absolutely. And, yeah, and like I say, you know, their focus is probably more on that kind of, that high level tax that they’re looking at there, but rather than a, an individual transaction. Basis, you know, they, yes, obviously they’re gonna look and see, you know, make sure you’re not claiming for something that you shouldn’t be sort of generally, but that’s more of a casting an eye over some elements of your p and l rather than, you know, deep diving into each individual account transaction, you know,
Adam: and is the reverse also true, Tim, where you could be, claiming that incorrectly and, you know, effectively, you know, be in debt to HMRC
Tim: Yep, absolutely.
Adam: come knocking on your door. And this stuff again could mount up [00:07:00] over the years and be material.
Tim: Oh, absolutely. And, yeah, I mean, that’s why, you know, from our perspective, we like to go through the vat returns with people and just cast a little look. we’ll also do, there’s little, things that, you know, you’ll look at.
For example, if you are, For most, businesses, most of your income, unless you’ve got some kind of exempt, business, most of your income is ible. So you’ll be charging VAT to all your customers. So just a quick, tip there is that the, box, one for your sales vat is going to be roughly 20% of the figure that’s in box six, which is your total sales. So that’s kind of like a quick lookup sort of
and again, if there’s a big disparity between that. You might then investigate and think, right, okay, why is that one not, not there? And, you know, is it a case of Yep. Do you know what, there, there was something, that I sold to someone abroad and therefore there’s no vat on that. and so quite rightly, you know, that the amount was less or, or yeah, it shouldn’t really be more. that’s gonna be, if that 20, if it’s more than 20%. Of your [00:08:00] sales. we’ve got something wrong there. But, but certainly the other way around, you know, it might be that it’s slightly less than 20% of that figure in box six.
And, yeah, so it’s just little things like that we will look through with people and just just make sure that, you know, that sanity check thing that, you know, that looks about right and where we would expect it to be. and yeah, so we’ll pick that up, not just with fact returns, but you know, with other reports and stuff as well. So,
yeah.
Daniel: and beyond, beyond VAT. Then, what’s the sort of next, key area that pr perhaps you look at when you are assessing a new client that you are working with. where do you go and look next? I.
Tim: So, well, cash is key. So obviously we wanna make sure that, you know, we’re getting all the, money into the business that we can do. So we might start to look at, the age debtors and, have a look and see, you know, What the age debt is. is it running rather high? Is there a reason why it’s high? you know, what we might be able to do and adjust to be able to get some of that money in a little bit sooner. So there’s [00:09:00] obviously, little things within the actual software itself. We like to use, zero for, most of our clients. And so, there’s little reminders. That you can, set up and you can have those.
And I find not just the late reminders because you know that, that’s fine, but actually I find. What tends to work well with a lot of customers is that pre reminder that comes in that just says, you know, maybe seven days before the end of the month, just, reminding you that this invoice is becoming due and it feels a little bit less kind of tele offy. Kind of to to people then, you know, this is late and stuff. So, you know, we can help to set things like that up that just, again, it’s just a perception thing. It’s a little tweak, but it will also, run in the background automatically for you. So if something is, late coming in, then people will, people will get the reminder for them.
And, obviously based on that, you do wanna make sure that you reconcile your bank statement timely. we don’t want reminders going out to people. That you know, because you haven’t actually looked at [00:10:00] your, reconciliations of the bank, receipts that you’ve got, for maybe a month. And people are getting automatic reminders.
I mean, that’s another, you know, on the converse side, that’s something you might wanna make sure that, you know, is good to be timely with stuff. And, and if you can’t be, maybe turn the reminders off in the interim for a short period of time. If you know in advance that maybe. Situations coming up where you won’t be able to look at them.
You don’t want to annoy your customers as well.
Adam: I, I was just gonna say some really great tips there actually, especially the timeliness of the reconciliations. You do not want to get that wrong, do you? Because there’s nothing worse than, a client seeing these things come through and. Hang on a minute. I paid you a week ago.
What’s going on? A and j just also that kind of review of the messaging and the tone. So you can obviously switch these messages on with zero, but they just stock emails. Right. And they won’t necessarily Yes, exactly. That’s what I’m saying. So, so you know, they don’t necessarily reflect your tone or your brand in how you’d communicate.
I think it’s a key thing to ensure [00:11:00] you kind of do put your own wording in there. you know, it might not necessarily. Just be like the standard templates that you get in Xero. So, I think it’s, I think it’s really vital to, to do the, you know, those processes that you are working through. and again, do you know what, turn off, turn it off if you’re gonna be away or something’s gonna stop for a couple of weeks.
Yeah. Makes perfect sense.
Tim: Excellent. And, uh, And,
then what do we do after that? So, obviously we’ve got money coming in. I wanna make sure that we’ve got that. But, we also wanna make sure that we’re on top of the money going out. so, on the, supplier bill side, we wanna make sure that, first of all, you are capturing. All your bills and not just trying to process costs, once they’ve hit the bank statement and then putting them in. ’cause you want to know in advance what you’ve got going out, what’s due. You know, we don’t want those dreaded phone calls to either, you know, we’re late with this or we’re late with that, or our own reminders popping in to tell us we haven’t paid a bill. So, yeah. So again, you know, we’ll, try to encourage, people to, [00:12:00] to try and enter stuff in a timely fashion and. Not just from a cashflow perspective, you know, obviously we wanna know what’s got to go out at the same time as we can see what’s coming in. But also, having both transactions, both our sales going out on in a timely fashion and our bills being processed into the system in a timely fashion is gonna give us a more, um. A more up to date and current understanding of what our, immediate outgoings and liabilities are so that we can plan ahead. Maybe if we’ve got like a big project or something coming in, we’ve got some money in, you know, we could put a little bit of money aside. It might be a good idea if you can start to squirrel away in a little, extra savings account money that’s for, those VA bills. for example, you know, that we know that they’re coming up, if we can put a little bit away and stuff, and again, having all of our information in the system in a relatively timely fashion means that we’re able to identify a little bit better that cash position. Rather than just relying on, that kind of thing that [00:13:00] I always do, you know, when I was younger, that you go to the cash machine and if it gives you money, that’s great, and if it doesn’t, you panic, you know? Sowe don’t wanna be doing that with a business, do we?
Daniel: and of course, ca cashflow, is perhaps one of the, one of the overly focused areas for a lot of the less experienced MSPs, lit. Literally the, The view of have I got money in my bank account? is the immediate, am I healthy and in a good place? But of course, if, if there are bills that are due out and and you are not seeing that, that view, then, then it can give a very skewed view of your current position. So,
Tim: Yeah.it doesn’t make for a, you know, a calm week, you know, when you just
kind of like constantly panicking and stuff. And I think that even just, even if we’re not happy with the amount that it might sort of be and stuff, just to have the information there and to kind of be able to see it, it means you can take that sort of that breath and kind of go, right, this is my plan. This is what I’m gonna do, you know? And, and you can plan ahead and you can work [00:14:00] out what you’re gonna do. Maybe even call, you know, certain suppliers or whatever if required, in the short term. And, and see about maybe a, you know, some kind of plan or something that you can do, better terms and things. Particularly if you’re finding that maybe certain customers, maybe bigger customers, tend to pay a little bit later. you do sort of get some that, that, you know, they, particularly if it’s a, more structured organization, you find that they, might just apply whether you. Do it or not, they’ll apply a 60 day term and stuff on it.
So it might be that, you know, you can, maybe then obviously agree something like that with your suppliers in return. so that you are, you know, paying once you’ve been paid. Um, and again, all of this is information that we can see, in the system if we have the data in the system. And, I
Daniel: I, I guess the, the large client that’s paying on 60 day terms, they’re actually, doing that to manage their own, money. So, therefore there’s a queue there isn’t there to say, well, you know, you should be applying the same level of control to your [00:15:00] own business, but.
Tim: fair
Daniel: to, to, to your suppliers and your customers as, as well. Adam and I are advocates of, of, being very proactive on that in terms of, bit billing and collecting in advance or at the beginning of delivery so that, the cash flow is always in your favor, as a business.
But, but clearly that’s not something you can. Easily implement to, perhaps a longer standing customer that you’ve not been disciplined with, in the past. So, so yeah, no, in. Interesting, interesting. you go to cash. ’cause of course it’s a key topic.
can we talk a little bit about management accounts? and, and perhaps, the more mature MSP has got on top of bank rec of, being, being prompt with their own billing and, and, and their, their supplier, management, but. When they go to the p and l or they go to the balance sheet, it’s not giving them the correct information because, they’ve not been, following the sort of management accounts,[00:16:00] pro processes.
So, talk us through some of the key areas there that you’ve worked with someone on.
Tim: Well, I mean, so for a lot of people they’ll get a spany new, accounting system and it comes, you know, most of them come with a default chart of accounts and people tend to just go along with that particularly, if they haven’t, They’re not, they weren’t very established at the time that they got the system. You know, it might be a couple of years down the line now, but they haven’t been necessarily very established at the time that they got it. and, these systems, obviously initially come with a very sparse, nominal definition for you, which is not really gonna help you from a management perspective.
Understand. What your business is doing. You know, they might come with one, one sale, one or two sales accounts, and they’re literally just called sales, you know? And, and then conversely, they, some of them might have a cost of sales, area. Some don’t even have a cost of sales area. Some might just go straight to an expenses area.
And then they’ll also define all those, probably in an [00:17:00] alphabetical. So, so one of the things we will look at is, first of all, from the business perspective is to, try and analyse, just give a little bit more definition, so we can understand ourselves where, where our money’s coming from, where we’re making money.
maybe the areas that we’re not making so much money by giving, a few more. Nominal accounts in there might just be something, you know, it doesn’t have to be complicated. It can be something simple as much as, from an MSP perspective, it could be, recurring services, non-recurring services, recurring products, non-recurring products. You know, we’re just gonna break down even just into those four elements there. that’s gonna enable us to see, you know, a little bit more about where our business might be growing, where it’s, where we might need to concentrate a little bit more, on it. And then, on the cost of sales, obviously we want to mirror as much as possible those cost of sales that are the direct costs related to.
Providing, those services or, or those products to people again, so that we [00:18:00] can see that we, are pricing correctly. and we, you know, we are getting what we’re doing. And actually, a quick aside on that with the, with another of the wins was, one, one, one of our guys. hadn’t, been breaking down his cost of sales, quite like that, and, had kind of missed then where, costs had gone up from one of his suppliers. and it was, the ancillary costs of, additional, Services that they’d purchased. So, in the middle, so, so the, they were billed for their clients on a monthly basis. This client has so many users and so they were billed for that and the clients would increase or decrease client, users during the course of the month. And, and. The RMSP hadn’t actually spotted that they had missed invoicing their customer for that change in the users. up and down, not just that customer actually. there was quite a few customers that they’d actually missed. Um, I won’t say anything, but I’m sure that if he’s [00:19:00] listening, he knows who he is. and, so yeah, so you know, obviously. Having a little bit more analysis and stuff there, it meant that he was able to see it. Is he not? Is he not okay? And so yeah, so obviously, you know, we wanna put in, we wanna, help ourselves to, make sure that we’re capturing, you know, scenarios that might be, you know, so something that is gonna enable us to make sure that, you know, we are getting the right income, and stuff with that. so yeah. So from the first part of the p and l, we’ve obviously got that. And then when you come down to the expenses side on the p and l expenses or overheads, again, if the chart of accounts has that in an alphabetical perspective, it’s very difficult to kind of collate similar costs together to see what an overall thing is.
So we will help, clients to, something as simple as just renaming. Some of the accounts as well as obviously putting, maybe a few more in, but actually just even renaming and grouping stuff together. So, for example, premises costs. So you know, you’ll [00:20:00] have premises costs and then rent, premises costs, rates, premises costs, heat and light, and electricity, which would’ve been sort of somewhere further up.
And it means that when you do look at your p and l. You are able to, collate together, the figures that relate to that so you can see what that overall cost is, and what it’s costing the business. If you are trying to look at line, you know, six and line 10, and then line 30, on a p and l.
To kind of say, that’s all, that’s my premises cost. It’s very difficult to kind of understand, you know, what it means to the business and actually where you might be able to save money or, or change things. So, so we’ll add that and we’ve done that for numerous clients and that kind of helps.
again, little quick wins of just changing, tweaking something, you know, that you’ve got already. It’s there, but we just need to tweak it a little bit to, make it work for you and, and enable you to, get on top of your figures, you know, for you. See, you know what it all means for your business.
It’s your business after all. And, you wanna make sure that, you know, you understand, where it is [00:21:00] and, where it’s going. And, and, you know, yeah, hopefully make it work. And of,
Daniel: and of and of course, if you’re not of the disposition that you find, this sort of thing interesting. this can very much be an overhead and a torturous process. we often, sense a lot of resistance against this and often a, an assumption that this should be far more automated than. It is. but of course if you look at large businesses, they have vast finance teams that are, although using automation, it doesn’t make finance automatic. And, and I guess the key thing you mentioned there is that really we are surfacing. Information that the owner can then consume and make decisions about, such as, I hadn’t realized just how much our office has, office cost has grown. and, and then, and then they’re at a rent review point, or making a decision about what they do. [00:22:00] looking far enough ahead, then gives them the option to say, well, perhaps we should start looking around at alternative, options. You know, where can we sa, where can we save some money?
Rather than these costs just naturally growing and, and, consuming their profit almost, automatically.
Tim: yeah. No, definitely. and actually to your point about, the larger organizations, you know, a hundred percent, they will have a number of personnel and they’ll be able to sort of do that. But there are, again, there are things that we can, help point you to, actually come with the systems.
so, as far as, automating. Stuff is concerned. There are things that you can do that can help you to analyse some of these. So there’s things like, within, the software itself, most of them will have, like bank rules. And you can, preset a bank rule that says, you know, if a transaction comes into the bank, one’s that you are not expecting a bill or something for.
So it might be something like your bank charges, interest, you know, little things like that. insurance, you know that they’re all, that. There’s no VAT. Related to them. So it’s not like, you know, you are gonna want to make sure you’ve got evidence of a, a monthly receipt or [00:23:00] something for it. I mean, your insurance is probably agreed at the beginning of the year, but it might be paid in instalments. So you want to then process those instalments when they go through. So, you can set back rules up and that will help, those to go through and you can define, you know, how you want those transactions treated. So that’s one way of doing it. And then the other thing that you can do where you have actually got the bills that you want to maybe analyse in a little bit more detail, you could use something like, Hubdoc that comes free with, zero.
If you have a Xero subscription, you get Hubdoc for free. And you can define in that create like supplier rules. And you can, then preset it to say, when these invoices come in, and you can actually have like a number of lines on it so it can go to a variety of, nominal accounts so that you can split that to exactly how you want it to be.
So, although, yes, from an AI perspective, it’s not the AI doing it, but. the AI element in those programs will then look at, you know, the, descriptions on the invoices and stuff for them. It might be able to help split some of those, down, [00:24:00] slotting them into the amounts. But certainly, you can, if you’ve got something that’s affixed, bill. Coming in, that’s coming in monthly, like that you can define and say, you know, X amount goes to this account, Y amount goes to that account. And, and help to do that. And again, you don’t have to be a large company or have a large finance team to be able to, use those. It might take a few minutes to set it up. But once it’s done, it’s much quicker going forward. And and again, these are little wins of time here or there that just make you feel like you are winning, you are on top. You know, I’m in charge. I can do this. ’cause you can, you know, it’s not, it’s not rocket science, it’s just, it’s just, yeah. having a little bit of time maybe, you know, to sort of deal with some of the other stuff. And I mean, if you can get rid of the noise of some of the transactions that are there, then you know, it will hopefully help you, to concentrate on the bits that, you know, might need your attention a bit more.
Daniel: Very good. And, you mentioned insurance there. obviously[00:25:00]
Superb. if. if you get the transaction for April, that comes through in April. But if, if you’ve paid for the year ahead, from May in April, then you of course need to, to spread that over the course of the year. So, any tips around prepayments, for example.
Tim: yeah, so I mean, obviously, it’s good to, you know, you’ll know some of your costs that you’ve, to be over a period of time. Maybe just put them on a spreadsheet. You know, there’s nothing wrong with a spreadsheet. I love a spreadsheet.
I’m that kind of geeky person that’s, you know, it’s, yep. Give me a, gimme an old fashioned spreadsheet. I’m there, but, and yeah. And then you can, process like Jenna. So, we’ll have a look, with our clients and see, you know, what expenses they might have that are going through. like that, that they might have an annual one, but they’re typically, that cost is spread over, over the financial year or maybe like even over a quarter, you know, however it’s spread. But, and then we’ll help them to, do journals so that we can post a journal. Through, again, we can use the system to help us.
We can [00:26:00] preset, draft journals that come up to recurring ones, so we don’t need to remember each month they’ll sit there in our drafts, once, once they hit the date that we’ve said we want to do this particular transaction every, every month or whatever it is. And, and then yeah, we can help them to spread those costs, which again, will give a better, when you’re looking at the management accounts, it’s gonna give a. Better idea of what your month to month, running costs and, and, you know, business. at the end of the day, net profit is, coming through rather than. Trying to work out how your business is doing because you’ve got 5,000 pounds going out in insurance in April. And and then, you know, you, your income is coming through in dribs and drabs from your clients, on a monthly basis or whatever.
So, you know, it just, yeah, gives, it gives a slightly better, understanding for you of, um, of what your costs are.
Daniel: and the magic word you mentioned there was, journals of course. And, I know it’s, certainly in Zero, it comes up whenever [00:27:00] you are in, entering a journal. It’s like, are you seriously qualified, as a professional to do journals? You know, like, whoa, I’m a bit worried about doing this, but, but just for everybody listening, it’s it’s quite okay for you to do journals yourself and we’d encourage it,
Adam: Well, well, hang on a minute. Hang on a minute. Are we getting ahead of ourselves? I’m not so sure we should be encouraging journals. In fact, that’s a question for you, Tim. I mean, for me, this is a dark art, right? This, you’re now into the back end of zero or whatever. I. and you can do a lot of damage very quickly.
And, you’re trying to do, you know, it’s a question actually maybe around, you know, cost and revenue recognition and journal entries and things like that. where do you kind of, where do you kind of, suggest the client stops and a professional bookkeeper takes over? where do you kind of set that line?
Tim: Oh, well, I mean, yeah, absolutely. For starters, yeah. Don’t just put journals through willy nilly. on the plus side though, the system won’t let you do it if it doesn’t balance. So at least you know it, it might be wrong, but
Adam: need
Tim: but it will be balancing perfectly.
[00:28:00] Exactly. Exactly. So, yeah. I mean, yes, if I would, If you think you might want to be doing journals, for stuff, you know, it might be, an area that, you can, it will help you. with processing, I would speak to, your accountant maybe, about, you know, sort of certain elements, if it’s gonna be to do with, for example, prepayments and, and accruals and some of these big accounts words that, you know, everyone ducks and dives from, when they see them flying around.
So, Yeah, I mean up, you know, like a monthly payroll journal and stuff to put through. That’s fine. You know, I think where you’ve got, you know, costs that, stuff that’s. Quite regular business transactions, you know? And, and if you feel you have an understanding of what it is, then you know it, it’s fine to kind of set it, you might wanna run it by, your accountant, to just to double
check or Well, I was gonna say, unless of course you’ve got our service, in which case run it by me. Absolutely. uh,
Adam: in other words, you’re saying this is absolutely something that they can [00:29:00] do, it either with training or with some support from you, or someone else who’s clearly qualified, as, as appropriate. Okay.
Tim: yep. Yeah, I wouldn’t just, yeah, don’t, just don’t just go off and just throw a load of journals in.
Daniel: With great power comes great responsibility
Tim: does, it does.
Daniel: and I think, we, we’ve reached just about the limit of our time on this episode. I think we could probably chat with you for at least another hour or so. So may maybe Tim, we could, we could arrange another follow on, episode, perhaps, perhaps even, one dedicated to journal, to give people, A bit of a, an understanding of exactly what they are, how to use them, to enable, our listeners to be, ultimately, either get into a stage where they can, produce management accounts level, outputs or indeed just be able to understand exactly what. and read a p and l on a balance sheet and understand what they’re seeing, so then to make [00:30:00] decisions.
So, so yeah, perhaps we’d, we’d have you back another time. We’d normally offer our guest a shameless plug. but, but, the plug is for us today, right?
Tim: it’s, it’s absolutely yes. So
Daniel: so if you’ve enjoyed, hearing from Tim today and would like to, would like to talk to Tim directly, then, get in touch with
Tim: Yeah, I gotta say my details are on the website or on LinkedIn, so you know that we’re there. And, yeah, as with obviously all the MSP team. So yeah, give us a call.
Daniel: Very good Tim. Thanks ever so much for joining us and, look forward to, talking again very
Tim: thank you for inviting me.
That’s lovely. Okay, bye.