
16 Jan Quit Leaving Money on the Table: The Top 5 Strategies Your Bookkeeper Could Be Doing for You (and Probably Isn’t)
Let’s face it—running a business is hard enough without leaving money on the table. But here’s the good news: profit isn’t some magical event that happens to lucky people. It’s a habit, one you can cultivate with the right tools and strategies. And one of your best tools? A great bookkeeper. When your financial reports are clean, accurate, and tell the story of your business, you’re better equipped to make smart decisions. Let’s talk about five key strategies your bookkeeper should be using to help you—but probably isn’t.
1. Know Your Revenue Streams and Margins
Not all revenue is created equal! If you’re not crystal clear on your gross margins or job costs, you might be chasing the wrong dollars. Your bookkeeper should know how to identify the revenue streams in your business. If your product delivery method processes are quite different for different types of your business, this might signify a different revenue stream.
Let’s use a law office as an example. Many law offices charge differently for different types of law. One lawyer does real estate closings, another lawyer works on estate plans. A different lawyer handles contingency work. Each of these lawyers price their service differently because the products are different. They have differing expected client lifecycles, and one case type would likely not bill or collect on the same cadence. Even the way the lawyers measure the success of completed jobs will vary based on the type of law.
A good bookkeeper will make sure you are recording all sources of revenue. A great bookkeeper will help you figure out where your go-to-market approach varies between income streams and strategically set up the chart of accounts to reflect that. They’ll help you break down your revenue streams to figure out what’s really driving your profits and what’s just spinning its wheels. When you can see which areas are cash cows and which are money pits, you’ll know where to double down and where to pivot. As the Profit First methodology teaches, understanding where your profit truly comes from is the first step to building sustainable financial health.
2. Tie Cost of Goods Sold to Income
Here’s a simple rule: your Cost of Goods/Services (COGS) should have a one-to-one relationship with your income. Buy a widget, sell a widget—the cost of that widget is your COGS. Easy, right?
But what about service businesses? It gets a little trickier. If you’re treating your technicians’ labor costs as Cost of Services, those costs should directly tie to the work they’re doing. No base pay for idle hours. In small business, this is complicated by the fact that many of our technicians might also have general and administrative duties required in their job descriptions.
In small business, each of our team members wears so many hats. It’s important to keep track of how much of a worker’s time is spent on the job. Then, figure out which work has a 1:1 relationship to COGS/Services, and which will be considered operating expenses. In efforts to grow, we must be able to identify this differentiation with ease when looking at a P&L Statement. A great bookkeeper will make sure these relationships are clear so your Profit and Loss (P&L) statement actually makes sense.
Being crystal clear on what is and is not a cost of services is important not only for calculating gross income, but also for understanding roles and responsibilities of team members. No guesswork, just clarity. Clarity in costs leads to confidence in pricing and profitability.
3. Make Sense of Operating Expenses
Operating expenses can feel like a black hole, but they don’t have to.
A great bookkeeper will break operations expenses down into easy-to-understand categories, and they will provide you with reports that show what percentage of your total OPEX is attributed to Payroll, Occupancy, etc.
Here are the subcategories that we like to use at Reconciled Solutions:
- General & Administrative
- Occupancy
- Payroll Expenses
- Sales & Marketing
- Productivity
- Research & Development
At Reconciled Solutions, we like to give the client a monthly profit and loss report that shows the percent of Operations Expense spent on each category. This way, the client knows how much Occupancy or Payroll Expenses contribute toward their total Operations Expense. For example, we train you as our client to recognize that your Payroll Expense is typically 40% of all your operations expenses. But this month, it’s at 52%. What is causing the sudden increase in payroll?
When you know the percentage of your total OPEX spent in these areas, you will be much quicker to address anomalies. It will be obvious when the percentage of revenue attributed to an Operations Expense is higher or lower than usual, and you can take action. Power is in knowledge, and this knowledge will help you optimize profit.
With this clarity, you’ll quickly see where your money is going and where you might need to tighten the purse strings or invest more. It’s about making your money work smarter, not harder. Profit First Professionals emphasize assigning every dollar a job, and clear expense categorization is a vital part of this process.
4. Match Your Books to Your Tax Return
This one’s huge and so often overlooked. Our clients often don’t understand how they could owe taxes when it doesn’t “feel like” they made any money last year. If your bookkeeper cannot explain why things are booked where they are between the tax return and your accounting file, then they cannot help you maximize your deductions.
Your bookkeeper should reconcile your last tax return with your accounting file and lock it down. Why? Because matching your books to your tax return reduces your audit risk and gives you a clear picture of your tax obligations.
It also helps you understand the ripple effects of things like buying equipment, taking on debt, or even just how much you earned last year. When your books and taxes line up, you’re not just compliant—you’re confident.
5. Educate and Empower You
Your bookkeeper shouldn’t just hand you a stack of numbers and say, “Here you go.” They should be your financial translator, showing you where your business shines and where it struggles. They should help you set key performance indicators (KPIs) and build dashboards that give you a real-time snapshot of how you’re doing. Armed with this knowledge, you can steer your business with confidence and spot problems before they become disasters
A bookkeeper understands that you did not get into business to know the ins and outs of tax filing and compliance. They need to be able to act with the heart of a teacher. That means ensuring that not only do you have the numbers you need to build a dashboard of performance, but that your performance metrics are easy to grab and go. As a result, you can worry about strategic decision making over securing accurate and timely financial reports.
Clarity is Kindness
At the end of the day, clear financial reporting is about more than just numbers—it’s about giving you the tools to succeed. A great bookkeeper helps you understand your financial story so you can make better decisions, grab opportunities, and avoid costly mistakes. Profit isn’t luck; it’s the result of intentional, strategic choices. So stop leaving money on the table and start building the habit of profit today. At Reconciled Solutions, we believe that small, consistent steps lead to big, lasting results.
Ready to understand your numbers and be equipped to make smarter decisions in your biz? Reach out, we’re here to help.