Small business owners often manage their finances in the early stages. (According to one study, about 45% of owners do their own accounting.) But as things grow, it’s more and more difficult to keep a handle on financial matters.
To keep the books clean and the company on track, you’ll need to make the accounting process easier. To help, here are four actionable ways to make the process easier and even make accounting more of an asset—instead of a chore.
1. Track and Improve Cash Flow
Much of what makes accounting seem difficult is tracking too many things that don’t drive business performance. If you’re keeping tabs of the right metrics, accounting helps you make decisions based on sound financial data.
One of the most important metrics a business can track? Cash flow.
Cash flow measures what comes in (i.e. revenue, accounts receivable) and what goes out (i.e. material, labor, etc.) in a given time period (i.e. monthly, quarterly).
How Tracking and Improving Cash Flow Makes Accounting Easier
Easier to spot issues: If your company is growing at 10% per quarter, but cash flow remains the same or goes down, there’s a problem. By tracking the cash flow, you’ll be alerted to issues early, before they become a major accounting problem.
Gets you excited: Cash flow is something that many business owners love. You’re profitable, you can work to improve the positive cash, and seeing this number doesn’t seem like a chore.
Make better decisions: If you don’t have great cash flow, should you increase prices? Focus on accounts receivable? Or if cash flow is great, should you spend a bit more on marketing? Or getting new equipment? Tracking cash flow empowers you to make informed decisions for the business.
2. Embrace Digital Finance
So many businesses pull out a lined notebook, or open up an excel spreadsheet each quarter to figure out their finances. This is even with many of those businesses already paying for software that has the ability to show you everything you need—in real time.
If you’re taking pen to paper, or trying to do formulas in a spreadsheet, think about embracing the current digital era and get connected with accounting software tools and apps.
How Embracing Digital Makes Accounting Easier
Automation: Your accounts, spending, invoices, etc. are all in a single place and updated regularly. All you have to do is log into that one software and see where things are at.
Reporting options: Using that automated data, a number of reports are readily available in an accounting software. Easier access means you’ll get a better snapshot of financial performance.
Obvious time savings: No spreadsheets, manual data entry, or forgetting to write something down.
3. Get to Know Your Accounting Tools
A large number of small businesses use QuickBooks. Maybe you use it, or one very similar to QuickBooks. Accounting software is a lot like chess, pretty easy to get started quickly, but it takes a long time to master everything.
Learning how to use your financial tools is immensely valuable.
How Improving Your QuickBooks Skill Makes Accounting Easier
You may be thinking, “It takes time to learn that stuff.” And you’re right. However, there are exponential returns for your time. Spending a few as a couple of hours learning often significantly reduces the amount of time you spend generating reports, manually entering data, or verifying all of your expenses.
Plus, learning all of the features available helps you to either:
Automate tasks you’re currently doing manually
Understand how to perform certain tasks faster than before using best practices
4. Work with an Accounting Solution Tailored to Your Needs
Ok, so nearly half of businesses do their own accounting. That means the other half do use either an accountant, CPA, or an accounting firm. Partnering with a financial expert that understands small business is a bit like a not-so-secret weapon. Not to mention, it’s perhaps the biggest time-saving measure on the list, because you don’t have to tabulate anything after employing the services of an accounting solution.
You give access to a bookkeeper, and they’ll:
Track key business metrics
Keep your books clean
And send you reports, keeping you up-to-date
How SIMPLY Financials PLUS Makes Accounting Easier
At SIMPLY Financials PLUS we offer just about anything to help small businesses, like yours. From basic bookkeeping services, to more advanced help with things like cash flow, and accounting system setup.
We even offer training and consulting services to help you master QuickBooks. If you’re ready to make accounting much easier, contact us today.