We use the word Love to describe many things. I love my kids or husband or even pizza. Can you Love your bookkeeping? Yes you can. It is part of your business and I hope you love what you do. I have several clients who wait until the last minute to get their books caught up. The only reason they do it is because it is required to prepare taxes. I realize bookkeeping can be tedious, so we put it off. It allows us to see if a new idea is working or if an old product is still loved by others as much as we love it.

A few years ago, I had a client who waited until mid July to get her books caught up for the year before. Once all the books were complete and taxes done it was evident that she had a problem. Three properties were losing money quickly – the other two properties were still profitable but not as much as they had been in years before. Her son had started college. She thought the reason she was short on cash was because of him being in school. It was those three properties that were bringing her down.

Each year she only did the books for the prior year just to get taxes ready. That year I convinced her to get completely caught up. That revealed not only had those three properties lost money the year before but that they had  lost enough money in the current year to bring the overall income below zero. She had a property manager that took care of things like maintenance and finding tenants, so she never saw the effect they were having over all. After talking with both the owner and the property manager it became obvious what was happening.

Those three properties had a very high turn over and even in a college town it was more than normal. The turn around also caused significant fines from the city for not having the lawn taken care of and repairs sky rocketed. The problem was not the property. Instead the property manager brought on a significant number of new clients and was ignoring the college market in favor of higher end rentals. In addition, the two properties that were making money had long term tenants in them and the rent was set at way below the market rate and had not been raised in over five years.

Fixing these problems was easy once she knew to look. She offered the two long time renters the opportunity to purchase the properties directly from her and she would carry the loan. One of them took the offer and the other continued renting at the higher market rate. She found a new property manager who loved working with college kids and fixed several items such as putting in new sod making the property more appealing while eliminating the fines.

Why would I tell you this. She realized without the financial information things would have spiraled out of control and she could have lost everything. From that point she loved keeping her books up to date. It even gave her the cash flow to purchase 5 more properties and even better was able to help her son purchase his first property. He rented rooms to several friends saving them dorm costs but also giving him income so he could pay for college. She taught him how important it was to do the tedious side of running a business. He loved it so much he went into accounting.

Loving your business is more than a product or service you offer – it’s the whole package. If you would like insight into your business or need help catching up and staying caught up, we are here to help. Just schedule a meeting and we can show you the steps. We are also offering a live class on the 14th of February through the Small business Development Center to teach you how to keep your books up to date easily.