The next transcript features an in-depth training with Clay Clark, US Small Business Administration Entrepreneur of the Year, and Caleb Taylor on Thrive15.com, a top-tier Ohio Business College that will teach you bookeeping.
Caleb: So as you're watching, always ask yourself, how can I apply this to my life, personal or business? If not, today's episode could be more meaningless than paying for a large when there's free refills. All right, Clay, welcome to your own studio, Thrive15.com.
Clay: I was waiting here. I knew you'd eventually show up.
Caleb: I'm glad that we're doing these five minute bursts here. The goal is to define certain topics that possibly aren't known by everybody.
Caleb: You even say many entrepreneurs don't know the true definitions of these topics, correct?
Clay: Not only that, we don't even know why we even need these things because we're talking today that didn't even I think I needed, until seven years ago.
Caleb: Okay. So the topic today is bookkeeping. We're going to be defining what that means and how it applies to your business, and why you need to watch this episode, right here?
Clay: Maybe we can talk about why there's a crazy sound in the background.
Caleb: I love that.
Clay: If we have time, we'll get back to it.
Caleb: Good. There will be sounds. Stay focused. So the definition that we have here of bookkeeping refers to the task of recording the amount, date and source of all business revenues and expenses. Bookkeeping is essentially the starting point of the accounting process. Only with accurate bookkeeping numbers can we meaningfully account for what's been done.
Clay: I'm going to ask our super producers to put this on the screen right here, okay? Here we go. One, if you can just give me the fingers here.
Caleb: Yeah. One.
Clay: One, we need the amount.
Clay: Two, we need the date.
Clay: Three, we need the source.
Caleb: Give us the source.
Clay: The source, Luke. Use the source, Luke. That's for all business related revenues and expenses. So go ahead and give me two more, revenue and expenses. Bam. That's what it is. Again, you have to have the amount.
Caleb: The amount.
Clay: The date.
Clay: The source.
Caleb: Thank you, Luke.
Clay: Then you have to have the business revenue and expenses.
Caleb: Right, okay, and you have to have all of that to create the bookkeeping.
Clay: If you don't have this information, you need a bookkeeper.
Clay: So I'm just saying, if you don't have it you need ... Now some of you are going, no man, I don't need this information. I have my own system. No, you don't. I've been audited by the IRS ... and irrited, that was an interesting word, but we'll be talking about that on a later episode. I've been audited by the IRS, and I can only tell you that it is a special feeling. It's like when you have a friend who you kind of remember from like third grade who hits you up on Facebook.
Clay: And he says, "Hey buddy. We should get together," and you really don't know who he is, but you go ahead and agree.
Caleb: No, that's not good.
Clay: Then you show up at Panera Bread or some kind of restaurant and he ambushes you with some high pressure sales presentation. That's what it's like having the IRS ninjas come to your office and help aggressively examine your expenses.
Caleb: When did that happen to you?
Clay: In 2007, I was asked by the United States Small Business Administration to fill out a packet of information because I had been nominated for the Entrepreneur of the Year award. I filled out the packet of information. After I filled out the packet of information, at some point I got a call from the IRS, not congratulating me on my award. No, no, no, no.
Caleb: What? They didn't send you a gift or anything.
Clay: No, what they did, is they said we're going to be coming to your office, now.
Clay: Actually, no, they said we're in your office now and we are here to help you discover your, again ... The amount, the date, the source of all business revenues and expenses.
Caleb: Mm-hmm (affirmative). Expenses.
Clay: That's what they did. So if you don't hire a bookkeeper, they get to help you keep your books.
Caleb: That's wonderful. So, here's my one issue though. What if I don't like doing that?
Clay: If you don't like doing this, you have to hire somebody to do this.
Caleb: It really has to get done though?
Clay: Yeah, I'm just being real because we're growing thrive. I want to spend, I don't know, zero percent of my day doing this, but I have to know those numbers.
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Clay: For not only myself, but for, again, it's sort of like a rain gauge. Let's just say that I'm obsessed with rain. You set the rain gauge out, you know how much rain came in. You know that kind of stuff. Well, if you're into rain and tracking weather patterns, you want to know that because if not, you might just speculate and go it rained four inches.
Caleb: Yeah, but this is more than a fun little hobby. This is something we've got to do.
Clay: This is real life. This is real talk. This has to happen. This is as real as one of those very touching segments on Oprah.
Caleb: Clay, one reason why I love sitting next to you, not just your aesthetic beauty, but the fact that you can talk to us about this topic and draw from real experiences, this is not theory. Clay did not go to school to study accounting. He's experienced this. He knows what happens when you don't focus on bookkeeping.
Clay: I'm going to stop joking for a second, because this is terrible. My wife and I would cry. When I say cry, as in like tears leaving our face, getting so dehydrated that we almost pulled our hamstring.
Caleb: Because you didn't have air conditioning, right?
Clay: No. Because we were getting audited and the fear of getting these letters, and being told that you owe money and the bills are massive.
Clay: Then having to hire an accountant to go back in the past. They call it forensic accounting. They're researching in the past to see what you might have done. That's crazy. You want to talk about some marital drama? That makes it exciting. My wife and I had some drama. When you say that you're working out, if you cause stress, you get buff?
Clay: Our marriage was getting buff.
Caleb: That's not good.
Clay: We were getting stressed out. We're going strong.
Caleb: I thank you for sitting down, and sharing with us your experiences and giving us action steps on how to deal with bookkeeping.
Clay: I want to say this for anybody who is, right now, thinking I'd like to date Caleb, he's not available. He's not available. He's going to get married soon. I just want you to know.
Caleb: Yeah. It's not here yet, but, just, I'm sorry.