In 1987 I read a book titled “The E myth” by Michael Gerber. It was a watershed moment as a young business owners and I wanted my business to run like a McDonalds franchise – just what the author promised if I followed his plan. Well it did not work.
We wrote manuals and check list and all I did was print paper to go into a binder that never got used.
But then I decided to outsource my bookkeeping and accounting in 1998 and we finally ended up with a two solutions in one.
1st I was able to cut cost by closing down my bookkeeping department. My total burden rate is now about 40% less then operating a single bookkeeper inside my building. But the real benefit came next.
2nd Our outsourced accounting service used a software called Delegation Magic that answered our desire for a true E myth type business. Here is what happened.
- The first thing to realize in business is that everything that happens generates a piece of paper within 30 seconds. If the phone rings we get a pink pad, a bill comes in the mail we pull down a blank check, if a customer calls we grab an order form. Everything generates paper immediately. Most of that paper has to do with accounting – so you can track the order and production cycle of customer request. So….
- We started throwing all paper onto the Delegation Magic system by just putting it on our scanner and several times a day we hit ‘send’ so the paper was scanned and converted to PDF. This was emailed to the service provider.
- They then read the paper by hand and named it, organized the paperless documents and set it up for retrieval so we were finally paperless. But the best is yet to come…
- Now that we were paperless we were able to use an outsource provider to do our bookkeeping online. The local bookkeeper that we found at www.cashcowaccounting.com set our accounting software up on one screen and the documents on a second. Rapidly running through our transactions and cutting our cost due to economy of scale that we would never get without accounting services like this one. But it got even better.
- The system created business rules that assigned work to a specific person in our operation for all types of tasks including production, marketing and finance. This allowed us to send work to a specific person who did the task. But it got even better yet…..
The best outcome of outsourcing accounting came from the Delegation Magic system. Here is an example. When a tough transaction came into the system (like a credit memo from Home Depot) the person who was responsible for the task got a list of work on her desk each day. If they did not know how to do the tough job, they simply hit a button that moves the task from the line workers desktop to the managers desk top.
Then the manager would click a button called ‘record.’ Their computer screen became a movie camera and recorded how the manager did the tough transaction while talking to the computer. All recorded. At the end of the difficult transaction the manager just closes the task.
Three months from now when another Home Depot credit memo comes in the door, our Delegation Magic team names the page. Within moments the system checks all our video on file and finds the ‘how we do it here’ video. It attaches the video to the task, so now my lowest paid employee can see exactly how we do the work.
This system has cut our cost and improved our productivity. It would not be possible if we did not rely on the technology of the accounting services provided by our outsourced accounting vendor. We are now creating video clips on every event that happens in our business and soon we will have our entire operation standardized and processes in place and being used at the exact moment of need.
