How do you know if your books are actually giving you good information? If you can't answer that question confidently, every financial decision you make is built on shaky ground.
In this episode, Martin walks through the 12 non-negotiable bookkeeping rules from his upcoming book, Running on Numbers. These are the things your bookkeeper must be doing, from double-entry accounting and daily entries to WIP tracking and monthly closes. If any of these are missing, your financial statements are incomplete.
The advice is simple: hand this list to your bookkeeper and ask, "Are you willing to do all of this?" If the answer is no, it's time to find someone who will.
Key Topics & Timestamps
- 00:48 Why Good Books Matter
- 01:54 No DIY Bookkeeping Rules
- 07:16 Non-Negotiables Framework
- 10:38 Core Bookkeeping Must-Haves
- 32:15 Matching Principle Basics
- 36:58 WIP Fixes Matching
- 41:45 Aging AR and AP
- 49:48 Cost Closes Reports Wrap
Memorable Quotes
- "If you do not have good books, all your efforts, all your learning about breakeven and how to bid, all this doesn't matter because you've got bad information." — Martin
- "You can think of books as a knowledge base. Any knowledge base needs to follow what you're saying so far." — Khalil
- "Matching is a bitch. It is hard." — Martin
Key Takeaways
- Stop doing your own bookkeeping if your business has any complexity. No DIY, period.
- Your bookkeeper must use double-entry books and accrual accounting as the baseline.
- Build a chart of accounts that gives you useful detail without becoming a 10-page mess.
- Every transaction needs a source document from an outside party before it gets entered.
- Enter transactions daily, not in monthly batches. Time degrades information quality.
- Reconcile every balance sheet account with an outside entity to create aligned truth on your transactions.
- Revenue and expenses must land in the same period. Matching and WIP tracking prevent the profit rollercoaster.
Resources
- Running on Numbers by Martin Holland (upcoming book)
- QuickBooks
- 24 Things Guide
- 15-Min Roadblock Call
- Quo
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- 24 Things Construction Business Owners Need to Successfully Hire & Train an Executive Assistant
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