Where Did The Cash Go? – Organizing Your Small Business FinancesPosted by Celeste
One of the problems that the entrepreneur frequently encounters when starting out is lack of accounting. Many people have never had to keep a careful paper trail of their daily spending before, and when they begin working for themselves, they have no bookkeeper to hold them accountable for keeping track of what is spent. This hole in their small business organization can be absolute chaos when it comes time to apply for loans, court investors, or even just prepare for tax season.
One of the most common reasons small business owners have incomplete financial information for their companies is that they are short on time. When a single person is CEO, designer, assembler, sales department, shipping, and bookkeeper combined, they feel overwhelmed. They may not have much experience in small business administration and this may lead them to think that they have a steep learning curve ahead of them when it comes to accounting. Small business organization needn’t be time consuming or difficult. It is more a matter of good habits.
Use a Business Credit Card
One of the best ways to keep track of your spending is to let the credit card company do it for you. It is still important for the entrepreneur to keep their receipts (for this purpose, try Shoeboxed, an app that keeps track of your receipts for you), but the credit card statement gives you a record of how much was spent, when, and where.
Use Accounting Software
One of the good habits to get into is entering all of your transactions into your accounting software. This tiny amount of small business administration can save you the big headache of trying to sort it all out at the end of the month (or year!) and allows you to see how you are doing along the way. Small business organization is easier than ever with all of the cloud accounting options available to the entrepreneur. For a small monthly fee, companies such as Freshbooks, Kashoo, or even Quickbooks will enable you to do all of your record keeping without having to find a book keeper to do it for you.
Accounting is more than just keeping track of your finances. Once you have begun to keep good, detailed records of where all of your money is going (and coming from!) you may find that you are ready to do more with your finances. At this point, it pays to hire an accountant to consult with you and to give you excellent financial advice. If you are organized before you get there, you can better use this person as a small business resource and get their help with the more important aspects of your financial planning, and not pay them top dollar to search through your incomplete shoebox of miscellaneous receipts.
What are your favourite tips for organizing small business finances?