By Mike Savory
As a small business owner, it can be difficult to keep up with the pace of it all. You’ve got a lot to think about—marketing, sales, inventory, cash flow, customer relationships—it’s enough to make you crazy. In terms of prioritizing the day-to-day, you may ignore staying up to date on your finances in order to focus on your upcoming social media campaign. I get it – and in theory it makes a lot of sense—do what you need to now to earn additional revenue or customers. However, staying current on your accounting will you help you gain the financial confidence that is necessary to make it through the long haul of business ownership.
Consider this– in a recent Sage study, we found that 36 percent of surveyed small business “nurturers” (these are third parties such as venture capitalists, angel investors, accountants, and attorneys) indicated that they have a somewhat to extremely low trust of financial statements they receive from start-ups. At the same time, when start-ups were asked about how they handle accounting for their business, 21 percent do accounting manually on paper, while 27 percent use their own home-grown system.
Many small businesses receive support from professionals like investors at some point in their lifecycle, and in order to present your business in the best light, you need to have the numbers right. And it’s not just about the professionals—your customers and employees need to trust that they are doing business or working at a business that is on track. Here are some tips to help you get a better handle on your finances, instilling confidence in not only yourself, but also the stakeholders who can make or break your business.
- Ditch the shoebox—I’ll bet you’ve heard this hundreds of times. It’s not a ploy to get you to pay an accountant or to purchase software. Keeping paper receipts in whatever contraption you choose is highly insufficient—and doesn’t it stress you out every time you have to dig through it?
- Stop the manual processes—keeping multiple spreadsheets and word documents is again, highly insufficient. I’ve talked to many small businesses who talk about how hard it is to find information when they need it, and hard to remember to update several documents. Just stop doing it!
- Utilize technology—you’ve heard it over and over—cloud technology is all the rage. It’s not just a fad; cloud technology helps you automate accounting—and many options offer mobile access—giving you the freedom to handle things no matter where you’re working. Technology can help you let go of the shoebox and the spreadsheets, and you can trust that the numbers will be correct.
- Work with an accountant—an accountant isn’t just for tax time anymore—they are there to help you through it all—and this includes looking into your finances on an ongoing basis—when hiring an accountant, consider whether they utilize technology that will let them access your financials directly and make real-time recommendations.
- It’s an ongoing process—so treat it as such—just like anything else that is ongoing in your business, like marketing and sales, accounting is something that needs to be nurtured. Think you don’t have the time? Your accountant and technology can certainly make this easier on you.