If you're an MSP owner and feel like your bookkeeping is a constant reactive scramble, maybe you're always behind on closing your books, dread tax season, or just don't have a clear financial picture, it's a common pain point. Knowing you need to fix it is one thing; figuring out the first manageable step is another.
"If someone's in that boat where the last three years, they know they shouldn't, but they still leave it to the end, what can you say to help them make the first easy step so that it's more manageable to do monthly?" This exact question was posed to Casey Seaborne of Stride, a firm specializing in MSP finance, during an episode of Cyber Confidential.
Here's a distillation of his expert advice on where to begin:
Your First Actionable Steps (According to Casey Seaborne):
Start with Your CPA (Certified Public Accountant):
"First and foremost, it usually starts with talking to your CPA," Casey explained.
Why? Your CPA handles tax planning, preparation, and advisory. They can help you understand your current tax obligations (like reasonable compensation for S corp owners, quarterly estimates) and ensure your business is structured correctly for tax benefits.
Outcome: This conversation will naturally "open up that can of worms, which is your bookkeeping accounting," as Casey put it, highlighting what's missing or incorrect from their expert perspective.
Critically Examine Your Foundational Bookkeeping & Revenue Cycle:
Once your CPA has likely pointed out the gaps, Casey advises you to "take a look at the foundations."
Ask these key questions about how information flows within your MSP:
"Is your balance sheet accurate?"
"Can you get a usable P&L on a monthly basis?"
If you're using a PSA (Professional Services Automation tool), "what does that revenue cycle look like?" Specifically, as Casey detailed, "How easy is it to go from a proposal to a signed closed deal to an invoice to getting paid from your clients?"
Why? "Closing the books is typically tied towards the revenue complications," Casey noted. Understanding these processes – where revenue is tracked, how costs are associated, and how billing occurs – will help you "root cause your way back to the ideal solution."
In essence, as Casey detailed, the first step isn't to overhaul everything overnight. It's to:
Get a clear picture of your tax and compliance status from your CPA.
Then, dig into your own internal processes around how money and financial data actually move through your MSP, especially concerning your revenue generation and collection.
This diagnostic approach helps identify why your bookkeeping is reactive and what specific processes need to be fixed or implemented to move towards a more manageable, monthly routine.