There are countless surprises involved in starting a business. For those who haven’t had official training, accounting will likely be one of them. Managing your cash flow and balancing your books is no walk in the park. But, like it or not, the survival of your start-up hinges on the strength of your financial strategy. This means keeping efficient records and ensuring your cash flow is smooth and consistent.
While it’s admirable to try and manage your business’s finances and accounting on your own, you could be wasting a lot of time and effort that could be spent elsewhere in the business.
Here are five accounting habits your business needs to break.
Stop using spreadsheets
Regardless of how careful you are, if you’re capturing manual entries into spreadsheets, errors are likely. Rather than being forced to start from scratch each time you catch a mistake, it’s worth looking into cloud-based solutions.
Integrating your invoices and accounts, and automating your data-capturing processes not only saves you time, but reduces errors. In fact, in the Practice of Now research conducted by Sage, almost half of accountants said they’d like to automate their day-to-day diary management, number crunching, and data entry – with as many as 66% saying they’d like to invest in AI to streamline these repetitive tasks.
Stop putting things off
It’s tempting to ignore your financial admin until tax season rolls around, but this is another way you’re opening yourself up to easily avoidable errors. If the idea of setting aside 15 minutes each day is too daunting, then set aside just one hour a week to get all your financial ducks in a row.
Record income and expenses and chase those unpaid invoices. Not only will this improve your cash flow, but it will help you spot problems that can be remedied before they get out of control.
Stop giving away control
While it’s a good idea to ask for (and pay for) help when you need it, outsourcing your financial management as a whole can easily end up costing you more than it’s worth.
Rather, find a happy medium. Business solutions like Sage One are a great way to get the help you need to manage your finances, without handing over control completely. This easy-to-use solution also complies with tax laws automatically – eliminating any nasty surprises around tax season.
Stop trying to control everything
While it’s important to have sight of every aspect of your business, some things, like tax, belong in the capable hands of experts.
Stop using outdated systems and processes
Rather than kicking it old school with a shoebox filing system (which may be simple, but isn’t very efficient), consider doing the following:
- Scan your receipts. These can be saved to the cloud or linked to your online accounting solution.
- Name your receipts. Each one should be renamed with its date, vendor, and expense category.
- Organise your receipts. This is simpler than it sounds. Simply create a folder for each financial year and make a habit of transferring your receipts to it.
- Create one folder to rule them all. Now that you have all your slips organised in the correct folder, work on saving these in a master tax folder. Your future self will thank you.
If you’re concerned about the health of your business, having clarity about your finances is a non-negotiable. Rather than dealing with a disaster that’s already arisen, avoid them altogether with efficient record-keeping.
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