For many entrepreneurs and small business owners accounting and monthly bookkeeping is their Achilles heel and left unaddressed can cause significant challenges for a company to succeed and thrive. Small business ownership can be a very daunting task with all the hats that we need to try and wear in running our businesses.
A common mistake that unfortunately I have experienced and seen is for small businesses owners to not prioritize the importance of having a financial accounting plan and process in place. This oversight needs to be corrected and corrected immediately. There is no other more critical aspect of successfully running a small business than Effectively Understanding and Managing the Finances.
Meredith Wood’s article The Ultimate Guide to Managing Small Business Finance does a great job in going over some of the small business accounting basics. The overall understanding and management of a businesses’ financials directly determines the success of the business. Some entrepreneurs and business owners are intimidated because they’ve never had to deal with numbers or business accounting before or they might be just running extremely hard to keep up with the demands of running a business. These are common obstacles of having a firm grasp and control on the finances of your business that need to be overcome. If you are going to be in business for yourself, you need to come up with a game plan on how you are going to deal with the financial aspects of your business today!!!
Here are some practical steps to get you started and on a path to financially managing your business effectively:
- Keep track of your expenses and invoices while making sure you’re following the GAAP standards. Categorize, categorize, categorize. This will help your keep track of how much money is going out, where it’s going to and what money is coming in.
- Remember to classify employees. As an employer, you’re responsible for managing employee forms such as W-4s and I-9s, and keep in mind there are different rules and regulations for independent contractors, consultants and freelancers.
- Plan for major expenses. Set aside money for oncoming projects, expenses and expenditure, especially money to pay your taxes.
- Outsource your bookkeeping as soon as possible. The biggest mistake most small business owners make is to do it themselves. It’s beneficial to outsource your bookkeeping to a professional with skills and a second set of eyes to manage and scan for errors.
- Cut time, not corners! Errors can cost your company significantly, so make sure you’re not misfiling by going over these errors ahead of time.
IF you need help in developing and implementing either day-to-day bookkeeping or financial management services, please set up a free consultation appointment.
For the month of December we are offering a Trial of our monthly bookkeeping package at only $49 for the first month (includes month’s entering of income and expenses, bank reconciliation, balance sheet, and P&L statement).