Sun 28 Jun 2015 | By:

5 Accounting Mistakes Every Colorado Entrepreneur Should Avoid

Accounting Mistakes to Avoid

Keeping track of your business’ cash flow is difficult, especially if you don’t have any knowledge or experience in accounting. But no worries, all you really need is a small business accounting software or an accountant in Colorado to assist you.

While both can help you out, I suggest that you use a Colorado accounting software because one, it’s cheaper and two, it is a great starting point. (Full disclosure, I use both)

Regardless if you’re an expert entrepreneur, an experienced business owner, or you have a Colorado accountant or a software like a Colorado accounting software, mistakes are still possible.

To help you avoid accounting mistakes, let’s discuss 5 of the most common errors that many entrepreneurs fail to recognize.


1) Doing All The Work

I understand that you love doing all the work and being hands-on, however, it also pays to distribute work to your team members or employees efficiently. If you really want to stay focused on the finances of your Colorado small business, you need to delegate deliver whatever assignments you are working on, it may be marketing, promotions or any other administrative jobs.

Just imagine a balloon, if you blow it just enough, you can play with it and enjoy it. However, if you blow it too much, it becomes delicate – its exterior becomes thinner and thinner, it’ll be at risk of bursting. It’s the same with hoarding all the work, slowly by slowly, it will tire you, until you reach exhaustion and productivity and efficiency are sacrificed.

Concentrate on your business’s cashflow management – delegate your tasks appropriately once and for all!


2) No Defined Budget

A budget is essential for all major financial decisions you’re going to make while running your business. Aside from this, you’ll also be able to evaluate and assess business results better because you have a basis. Managing your expenses is also much easier because you now have a fixed amount when it comes to how much you can spend and how much you have to save.

Over and under spending will also be avoided and you’ll be able to set realistic financial objectives for your Colorado small business. If you want professional assistance to help you with this, you can talk to an accountant in Colorado to help you out.


3) Inability To Create An Accounting Flow

There’s nothing better than to go about with your accounting tasks in the most organized and well-laid out way as possible, however, many entrepreneurs fail to give much importance on this matter.

While it may seem helpful to go about with your accounting tasks as they come, this isn’t the best way to do it. It is definitely more practical to create a well-defined, easy-to-follow, step-by-step accounting flow which you can follow while you complete your accounting responsibilities.

Trust me, having an accounting flow will make your life easier! It will help you deal with unexpected and difficult financial situations better and you’ll be able to make financial decisions better using your accounting flow as your guide.


4) Neglecting Financial Reports

While doing all your financial tasks, do you take a moment to read your financial reports? These documents are made for a reason, they are called reports after all. Your financial reports are important summaries of your business’s finances, from profit to loss, inflow and outflow and a lot more.

If you’re currently facing a financial dilemma, your financial report may just have the right answer. Reading your financial reports religiously will help you understand your business better.


5) Outsourcing Financial Tasks

As I said, hiring a Colorado accountant or using a Colorado accounting software is a big help if you’re inexperienced in accounting. Outsourcing your tasks will ease your burden and you’ll also be able to complete them faster. However, you have to remember that relying on a professional or a software too much can also be bad for your business.

If you plan to get accounting assistance, you have to make sure that you work and check on their work on a daily basis. Being aware of what’s happening within your Colorado small business is essential. You’ll be able to create solutions on pending business problems and anticipate those that may possibly develop in the future.

Among these 5 accounting mistakes how many have you committed? It doesn’t matter if you made all these mistakes or not, you need to correct them if you’ve experienced them or be vigilant if you haven’t. While some mistakes can be minor and can be corrected easily, there are those that might not be as easy to deal with and can be detrimental to the overall health of your business – most especially if they are committed repeatedly.

Tracking your startup’s finances doesn’t have to be perfect, but you need to make sure to not commit the same mistakes again. If you really want an efficient way to solve your accounting tasks, I suggest you check out FreshBooks, it’s simply the best!

About Aaron Roberts

Aaron is an entrepreneur who turned a side project mowing business into a grounds maintenance company caring for over 15,000 acres of government property. He is currently running Yard Farmers and contributing his expertise to Startup Savant as an adviser and writer. Learn more about Aaron here.