What I Wish I’d Known About DIY Small Business Accounting
I know you probably don’t want to spend more money to have a professional Bookkeeper handle your accounting. It seems counter-intuitive doesn’t it, to pay someone to help you save money. But believe me – it really does save you time, money and gives you peace of mind. You can start out doing you own accounting, and it may work for a while when you’re small enough. Then again you may end up with a shoebox full of receipts and have to have your accountant organize it all for you…..which would end up costing you even more.
Ann Whittaker states in her article different areas to think about when considering to DIY your business’ BOOKKEEPING —
01: If You’re Going to DIY Your Accounting, You Have to Actually Do ItIt's common for small business owners to choose to manage their own accounting needs. Unfortunately, it's also common for small business owners to get distracted by all the other things they have to manage. It's easy to put off recording receipts, invoices, etc. while assuming you'll get to it "at the end of the month....."
02. Commit to a Process & Platform"There's a good chance you spent months crafting a bomber business plan. But how's your accounting and finance plan? How are you going to actually track all that money you projected to earn? How are you going to quickly show investors what's going on with the health and growth of your company?....."
You need to think it through and decide on which software applications you should use. You will need something to track and analyze your transactions, create reports, etc.
03. Learn the Basics"Make sure you don't just "wing it." Yes, we all know how to balance our personal checking accounts, but small business accounting is a different beast--with a lot more paperwork, analysis, reporting and strategy....."
Your best option is to take some time to learn how to DIY your Bookkeeping yourself. If you can read a few books, watch some online training videos, and try out various software solutions. Here’s some of the things you’ll want to know about:
- How to analyze your cash flow.
- How to handle your accounts receivable (customers that owe you money) and accounts payable (people/vendors you owe money).
- How to calculate payroll.
- How to prepare a budget.
- How to read and prepare financial statements.
04. Ask Questions. Ask For Help
Don’t ever be afraid to ask for help. If you are doing most of the transaction entry, bill payments, cash receipts, etc. yourself, there is nothing wrong with still having a BOOKKEEPER that is providing oversight to your accounting file. He (she)"When you hit a wall and don't understand something, remind yourself that this doesn't mean the end of your accounting efforts. Get online or make a phone call. Even if you feel like you're doing everything right, it's always a good idea to get another set of eyes looking at your numbers and reporting....."
05. Invest Your Time & Some Money"This is worth repeating: set aside daily time to tend to your accounting tasks. Keep the books updated, bills paid, and invoices going out to customers. Even if you're not paying someone else to do your accounting, invest a little money into good software and mobile apps. You need every bit of help you can get, and a little investment can go a long way."
Expert tips for doing your small business accounting.