A great idea strikes, and a startup starts. You start planning about your products/services, pricing, payroll and other things. You start devoting time to your business strategy, pitch deck and marketing but not your ‘books’. But such businesses don’t last long. Any business that wants to continue to exist needs to have a plan for accounting. Clarity of books can in fact be a wealth of information about your business.
Accounting and bookkeeping may not seem urgent but its foundational to your business health and growth, it helps you figure out your cashflow and helps in taking critical decisions. The process of tracking all financial records, mainly income and expenses, is called bookkeeping.
Your books are scorecard of how well your business is doing, but every entrepreneur is not a number cruncher and bookkeeping may be repulsive to them. It is not about how you feel about it rather it is one of the tasks that no business can avoid forever.
Mixing revenue and expenditures is a common error in small business bookkeeping. For any business it is bound to create problems. The moment you start your business, you should open a business bank account and also get a separate business credit card, this not only disjoins your personal and business accounts but also helps build your business credit rating.
Bookkeeping old style way, manually, is very time consuming and unprogressive. So, try to shift your business banking to online mode and start using cloud-based bookkeeping software; doing this you can sync your bookkeeping software with your business account which will keep your books accurate and updated all the time. Also, your vital financial data is backed up safely off-site.
Get help from a good financial advisor and get a customized accounting software. Your financial advisor will help you setup the software and also help you and employees to learn how to use it.
Bookkeeping should not be deferred or put-off unnecessarily as it creates many hiccups in business like bounced checks, overdue invoices or unmatched financial figures and numbers. Your books should be updated regularly to make sure that everything is in order.
Comprehensive review of bookkeeping and accounting records needs to be done quarterly. Things like late-paying customers, year over year revenues, increasing/decreasing sales should be marked and investigated. You should always join the dots and look at the bigger picture so that you can be prepared for future capital needs.
You should also keep a tab on changing tax rules and take the help of good financial/business advisor to understand what needs to be done for next financial year. For this you need to keep proper and detailed records and digitalize the receipts. Expense tracking can be easily done if you use business credit card for business purchases.
Time tracking software allows employees to clock in and out and also keeps tab of the work done and saves a lot of hassle for them as well as you by automatically tracking overtime, time devoted to particular projects and idle time of employees. These can be integrated with the payroll software as well. This reduces discrepancies and saves time as well by eliminating manual time keeping.
Your business cash flow may be hit when you have customers who don’t pay on time. So, you need to keep a tab on the timeline for your receivables and late paying customers should be contacted and nudged for payment.
Payment of taxes should always be done on time to avoid unnecessary legal hassles. For this you need to plan ahead and always have in reserve funds for this. You need have reminders set before the due dates to avoid being a defaulter.
Financial advisors and professional bookkeepers can help you with all the aspects of small business bookkeeping and accounting.
Financial advisory services are the best help in managing financial crises and maneuver the tight spots as these agencies provide you with financial modelling and financial analysis along with financial forecasting to help you take sound decisions. They give you CFO services along with accounting and bookkeeping. All the data analysis is done for you to take decisions accordingly.