Waterloo has a lot of businesses that are run around the kitchen table. A husband handles the jobs while a wife handles the invoices. A parent started the shop and a son or daughter is slowly taking over. Somebody’s cousin does the books “when they get a chance.”
I’m Miles with MilesP Bookkeeping. I’m a certified QuickBooks ProAdvisor (Level 1, Level 2 and Payroll), and I work with small businesses across Monroe County, Waterloo included. Family businesses are some of my favorite clients, but they come with their own bookkeeping headaches. This post is about those headaches and how to fix them.
The family business bookkeeping problem
When a business is run by family, the lines get blurry. The business card buys groceries once in a while. The household account pays a supplier because it was handy. Someone moves money between accounts and nobody writes down why.
None of that makes you a bad business owner. It just makes the books hard to read. And when the books are hard to read, it’s hard to answer simple questions like “Can we afford to hire someone?” or “Did we actually make more this year than last?”
Step one: separate the money
The single best thing a family business can do is keep business money and household money completely apart. That means:
- A business checking account used only for the business.
- A business credit card used only for the business.
- When the owner takes money out, it’s recorded as an owner draw or payroll, not as a random transfer.
It sounds simple, and it is. But it’s the step that saves the most cleanup time later. I go into more detail in my post on how to separate business finances.
Step two: decide who does what
In a lot of family businesses, three people can enter things in QuickBooks and nobody is sure who did what. That leads to duplicate entries, missed bills and transactions that are filed in the wrong category.
Sit down and agree on the jobs:
- Who sends invoices?
- Who pays bills?
- Who enters receipts?
- Who checks that the bank and QuickBooks agree each month?
Writing it down helps, even if it’s one sheet of paper on the fridge. If nobody wants that last job, that’s exactly where an outside bookkeeper is most useful.
Step three: give everyone the same numbers
Family disagreements about money often come from people looking at different numbers. One person checks the bank balance, another looks at a spreadsheet, and a third goes by memory.
A clean monthly profit and loss statement and balance sheet puts everyone on the same page. I send those to my clients each month and I’m happy to explain them to everyone involved, not just whoever hired me. If you want to learn to read them yourself, start with how to read a profit and loss statement and how to interpret a balance sheet.
Step four: plan for handing it down
If the business might pass to the next generation someday, clean books make that much smoother. Whoever takes over needs to understand where the money comes from and where it goes. Years of messy records make that hard, and they can make it harder to talk with a lender or an advisor about the change.
You don’t need to solve succession today. But keeping the books clean now is one of the kindest things you can do for whoever runs the business next.
When paying family to do the books stops making sense
I hear this a lot: “My sister does our books for free.” That can work. But it’s worth asking a few honest questions:
- Is she current, or months behind?
- Does she enjoy it, or does she dread it?
- Is it causing tension at holidays?
- If she got sick or moved, could anyone else pick it up?
Sometimes the free option ends up being the expensive one, because the cleanup costs more than steady help would have. I wrote about weighing that choice in outsourced bookkeeping versus in-house.
How I work with Waterloo businesses
I’m a remote bookkeeper. I don’t have an office in Waterloo, and you never have to drive anywhere. We work through QuickBooks Online, email, phone and secure file sharing. Here’s what it usually looks like:
- We talk for a few minutes about your business and what’s frustrating you.
- I look over your QuickBooks file and tell you honestly how much work it needs.
- You get a clear price up front.
- If the books are behind, I catch them up.
- After that, I keep them current month by month and send you your reports.
Since I also hold the QuickBooks Payroll certification, I can help if you have employees, including family members on payroll. My payroll support services post covers that side.
You can learn more about how I serve the area on my Columbia, IL bookkeeping page, which covers all of Monroe County.
Frequently asked questions
Can more than one family member talk to you?
Yes. I’m happy to work with whoever is involved in the business, and I can walk everyone through the reports together.
We use a mix of a spreadsheet and QuickBooks. Is that a problem?
It’s very common. Part of the cleanup is getting everything into one place so you’re not keeping two sets of records.
Do you have an office in Waterloo?
No, I’m remote-only. That keeps things simple and means no trips across town to drop off paperwork.
Can you help if we’re just starting out?
Absolutely. Setting things up right from day one is the cheapest bookkeeping you’ll ever pay for. See my QuickBooks setup guide.
If your family business could use a steadier set of books, reach out on my contact page and let’s talk.