In this article we’re going to quickly breeze through exactly what you’ve come here for – a short list of small business accounting mistakes that will real thorns in your brand if you aren’t careful. Hopefully this helps you avoid them altogether so that the coming year is among your most prosperous. Enjoy!
Think of a small business like a room, like a bedroom. You can either keep it tidy and organized or let it go with clothes lying all over the place, the bed a mess, dirty carpet, that odd smell in the air…the works. In such situations financials are typically in bad shape and the work flow is filed under “winging it” aside from maybe a calculator and basic word documents. Not good.
Most modern accounting software solutions these days are amazing. It’s like being able to drive a high-end sports car year-round for a couple hundred bucks. But, if you don’t know how to drive, well, then you’re going to have to learn. Thankfully great options like FreshBooks & Xero are intuitive, with plenty of free educational/training material to walk you through the process.
Maybe learning how to use and leverage contemporary, cloud-based accounting software isn’t something you should do. Maybe it’s something you should delegate to a qualified professional, or at the very least someone at least familiar with numbers. In the end that’s cheaper than stunting your other skill-sets and your productivity for 3-6 months or more.
This is really a no-brainer. Listen, if there isn’t a marketing budget at all how in the world will you compete? And, technically you DO have a budget because nothing is free. You just haven’t planned, forecasted, and structured it yet which accounting software makes a cinch.
Is Xero an astounding tool? Absolutely, we use Xero ourselves, but we don’t view it as a crutch. We don’t put ourselves into a frame of mind where we think some algorithms are responsible for our resources, marketing budget, etc. Remember, good software should allow third-party integrations so you can really curate and customize your financials with as much functionality as you need.
Oh boy…it’s typically solopreneurs who walk into this quagmire. And it’s usually not some intentional thing either, but tends to happen more organically until they learn the hard lesson come tax time or when there’s a family/business emergency. Then they realize they need to set up dedicated business accounts then sync them with their accounting software.
This is otherwise known as human error. Accounting software can perform astounding magic with your numbers, but these numbers need to be accurate. Once you’ve synced your business bank account and credit/debit cards with your software this become 100 times easier. These days providers make it so you can sync with just about anything else like PayPal for example.