#1 Bookkeeping Rule the Pandemic Taught Us

One year! It has been one year since the "world went crazy!" Can you believe it??

If you know me well, you also know that I am a bit of a Reality TV Junkie. This past fall and winter, I have been watching shows filmed early last spring. COVID-19 is starting to be a topic of news reports and conversations. The shows' stars make off the cuff responses to the global pandemic. I laugh at them, thinking to myself... "You have no idea what is about to come!"

You may also know that I like to focus on the positive. Faced with this last year's challenges, I want to ask what we can learn from this adverse situation. Admittedly this last year was one of the most challenging years on record for small business ownership. I spent last March and April helping small businesses close down, answering employee questions about unemployment, and wondering if my client's companies would survive... would mine?

All the same, with the perspective a year in the rearview mirror, I have learned a lot. I have learned that my clients are resilient (all of their businesses are still in operation despite stay-at-home orders and remediation efforts). I have learned that the ability to be flexible can make or break a business. I also learned that keeping your books in order is critical to handle any disaster.

In the spring of last year, the SBA quickly provided resources to small business owners. The Paycheck Protection Program (PPP) and the EIDL loans were necessary tools to keep businesses open and employees off an already stretch unemployment system. Still, they both relied on one key thing: good financial reports and filings that allowed the businesses to prove their financial needs.

Most of the time, the PPP process for my clients was seamless. They were only held up by the challenges of the individual bank's online application portals. For business owners that I spoke to where the process was challenging, it frequently came back to poor day in/day out bookkeeping routines.

Frequently, small businesses stockpile the bookkeeping work. Save up bank reconciliations for a few months. It is almost like we treat it like a rainy afternoon task; "I will do it when I get a few extra minutes."

The challenge with this is when there is an immediate need, like a pandemic, if you can not document the business's financials, you are slowed down and may lose out on an opportunity.

At Task It 2 ME, we talk about this with clients a lot. The importance of creating a bookkeeping routine that ensures that your business's financial health is clearly documented and up to date in real-time. Finding processes like scanning receipts, regularly reconciling, reviewing reports, updating AR and AP, allows you to pull the trigger quickly when faced with an opportunity, whether it is to aid you through a pandemic or to grow in a new and significant way.

What are some business lessons you learned during the pandemic?