As a small business owner, you face many challenges. One of the biggest challenges can be managing your finances. Keeping track of invoicing, purchase orders, balance sheets, and profit and loss statements can feel like a herculean task, especially if you don’t have a background in finance.
Our team at Business Made Simple excels at managing processes and taking the headache out of small business finances. We have a few basic tips to help improve your accounting systems and work out the bugs in your financial processes.
1. Commit to a Software Right Away
QuickBooks is well worth the investment. The software is intuitive, even if you don’t have a strong background in accounting. With packages starting at $15/month, QuickBooks is also quite affordable.
If you are still early in the startup phase of your business, and even a nominal investment like QuickBooks can seem like too much of a stretch, it would be worthwhile to consider a free online accounting software like Wave. It is completely free and offers many features needed to effectively manage small business finances. For a more comprehensive comparison of accounting software, check out this article.
Do not wait until your business grows before moving off spreadsheets–the headache is not worth it. With the abundance of free and low-cost accounting systems available to small businesses, there is no reason to wait.
2. Choose One Day a Week to Do Your Bookkeeping, Bill Paying, Invoice Sending, Overdue Account Calls, etc.
Commit to a block of time and get it in your calendar. Do not wait until the end of the month because it will be overwhelming. Reconcile your accounts each week to avoid surprises and quickly fix mistakes. When you are just starting your business, you will likely only need an hour or two each week to manage your small business finances. As your company grows and the finances become more complex, your required block of time will increase.
3. Buy one Accordion-Type File Each Year to Store Your Receipts by Month
This makes it easy to find what you are looking for and each year you can throw out one of the accordion folders. Simply label each of the divider tabs with a month (some accordion files come with month dividers already in them), and place the receipts in the appropriate divider. Make sure that you are adding receipts to your file immediately. The longer you hang onto receipts, the greater the odds that they will be misplaced.
4. Don’t Be Afraid to Hire it Out
There are many great outsourced bookkeeping, accounting, tax, and CFO service businesses. If you are interested in outsourcing your financial management, do your due diligence in researching the firms you are considering. Many businesses start by considering the price point, but ignore the credentials and ratings. Ensure that the business is qualified and trustworthy before allowing them to handle your finances.
Small business finances don’t have to be scary. If you would like help in determining which systems are the best fit for your business, contact Business Made Simple for a complimentary 15 minute business evaluation.