Two truths about accounting and bookkeeping

Bookkeeping and accounting are vital activities for any company and is one of the things that you run into quickly after starting a company.

After a mild panic attack last week, I found out two truths about accounting and bookkeeping.

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When I started Unicornsulting, I did so with the intention of learning new things. One of the things that I knew I would have to learn early on was accounting and bookkeeping. To quote what will probably be my last words some day (hopefully far, far away into the future): “How difficult can it be?”. After all, I’m more or less autodidact when it comes to Electrical Engineering, Software development, Electronic music and pretty much everything that I’m doing. I learn by doing. I need to apply things and see what happens.

Fast forward to last Wednesday: I had gathered ten expenses and the first paid invoice (whoppee!) and I decided to get going with the bookkeeping and it took me about thirty minutes until I realised that I had some papers that needed to be sent to Skatteverket (the Swedish IRS) ASAP! I got chills down my spine and I freaked out. OMGWTFBBQ?!

It was a classic fight or flight response and flight won. I ended up addressing the problem by posting a question on Facebook if anyone could recommend a good accounting consultant. I received a lot of great suggestions and also some comments about how small business owners addressed their accounting.

Some people handed over all receipts and stuff once every week/month/year to an accounting consultancy that solves everything for them, some people do it all by themselves and others have a combination of the two.

That is how I learned the two truths about accounting and bookkeeping:

  1. Accounting is difficult.
  2. Accounting is easy.

As you might understand, I am not a big fan of the word ‘is’ and I tend to see the world in a non-binary way. In this case I found it is both difficult and easy at the same time. When it comes down to it, I’m not a big fan of the word ’truth’ either, but that is a different story

Focus! Oh, look Shiny! Focus!

Fast forward a couple of days to last Friday evening, a couple of days after I freaked out. I decided to take the bull by the horns and sit down with my receipts and the eAccounting software. After a few hours I had manage to set up the accounting for the company and do the bookkeeping my transactions and I had a pretty good view of the finances for the company.

Of course I made some mistakes. That is how I learn. My favourite mistake so far was that when filing one receipt I got debit and credit mixed up (classic mistake, eh?!). I quickly learned the hard way that you can not just change it back but you have to register a correction. This lead to that I ended up making a correction of the correction of the correction of the mistakenly filed receipt.

How will I proceed?

Now that I have built up my confidence a bit, I am going back to plan A. I will do the accounting and bookkeeping myself (supported by Visma eEkonomi), acknowledging that it is both difficult and easy. I have a couple of meetings scheduled with accounting consultants since I realised that from time to time I will be in need of some advice and that it is good to have someone to ask about the trickier things.

I find that by doing the accounting myself, I get a very good grasp of the economic situation of the company and I am learning new stuff while doing so. Later on when I can do accounting in my sleep (which I hope that I won’t have to because I prefer dreaming of other stuff than accounting), then I will consider outsourcing it to an accounting consultant, but for now, I consider it competence development and sufficiently outside my comfort zone.

/Kalle

PS. Thanks to all of you who have shared your view on accounting and bookkeeping in a small company and recommended accountants. I really appreciate your input and thoughts.

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