You own a small business.
You run it.
You run all its operations.
You are master and slave, and employer and employee, and taker-outer-of-the-trash, too.
Then you do your accounts.
And bungle it up.
And give yourself a miscalculated account of what fuel your business is running on.
Small and medium businesses usually see one person running the show, being their own Man Friday, and alas, becoming the Atlas of their own world.
Many think that focussing on loftier problems in the accounting function will take care of their company. However, little do they realise that it’s with the smallest processes that one can build the foundation with, and also where one can see the most amount of cracks when neglected. Because perfection is in the details, right!
But fret not. As Lord High Executioner and Lord High Everything Else of your SMB, what accounting hack can help you smoothen out operations? We are here to show you 1 way you can set yourself free from traps you unwittingly got enmeshed in, and how it works.
Things you could do differently to save a load of time:
- Hire an accountant
- Hire someone else’s accountant (aka, outsource)
It’s that simple. When you do your accounting yourself, you have neither the time nor the stamina to invest into it, and your accounting suffers. That doesn’t mean you should wash your hands off it completely; you still need to be aware of what’s happening with your accounting and ensure processes are maintained. But as your company grows, your involvement must be at the decision making level, ensuring financial policies are being enforced correctly, maintaining procedures, reading your company’s balance sheet to get a snapshot of your business’ health for a given period, and acting based on that information.
An accountant – either in-house or from an accounting firm – will help you not just during tax season but also with the following:
- Maintaining your books properly
They can help you keep a tidy record of all transactions, invoices and due/late payments and let you know where your money stands.
- Reviewing your accounts receivables
Their job is to regularly sleuth your AR to know what you are owed, where your money is stuck, and where your money is flowing. That way you will know what you have and what you can spend.
- Keeping abreast with taxes & deadlines
Are you eligible for tax breaks or incentives, or do you just pay? An accountant can give you tax advice based on the results they have achieved in the past with companies similar to yours. Moreover, they are up to speed on the ever changing tax laws, and can help you project money you need to provisionally put aside and plan to meet deadlines.
- Going about those P&L statements and other financial doodah
They are in till their eyeballs on your financial situation. So they can use that data to analyse your financial information and trends. This snapshot of your overall finances over various business cycles helps spot trends and forecast profit margins.
- Reaching inferences from the analysis
Spinning off on the precious point, an accountant can help you identify explosive risks based on the analysis of your financials, and can suggest alternatives or pre-emptive strikes.
- Align your practices with your goals
They can communicate with your managers, staff and team on ways to increase the financial performance. All in all, this (along with their input) ensures that business practices are aligned with your targets. This guides your business towards well developed and sustainable value.
Isn’t it worth it when someone can bear all these headaches for you!