Getting started with accounting can be daunting for small businesses. That's why we've asked some of our smartest partners to share their do's and don'ts with you. Their tips can help you approach your books with confidence. Without further delay, here's our Q&A with the pros:
What's the best way to get started?
“Develop standard operating procedures that incorporate technology like Xero, Hubdoc and Box to do the heavy lifting. It is difficult to scale when tasks are done manually and processes live in the owner’s head. Have your team help develop the processes to ensure that everyone has a voice and is being considered. After that, you are off to the races!”
– Cristina Garza, AccountingProse
“Write a business plan. Seek advice from an accounting professional as soon as possible. Save a record of every financial transaction that takes place.”
– Elaine Orr, BalanceSheets.ca
“Think about a good cloud-based accounting system that is going to take you forward. Find something that can handle HST, employees, forecasting, and budgeting. Pick a really good system off the bat.” – Jennie Moore, Moore Details Bookkeeping
What impedes small businesses from being successful with accounting and bookkeeping?
“Most, if not all owners, think that they can catch up with their bookkeeping and back office tasks. But these are just as important as the operational setup…How will you make informed decisions if you have no financial information at all!? Also, it will very likely cost you more money to pay for a “catch up” service of your books, rather than paying it off right at the start and as you go. There’s a solution: You have to find the right bookkeeper. As when you make new friends, you have to find the one that listens to you, fits your budget and has the potential to grow with your business; they should make you feel as if you had hired a brilliant in-house bookkeeper that fits wonderfully with your organizational culture.”
– Rustin Smith & Azucena Saucedo, Scalability
“What impedes small business owners is their fear of the unknown. They need to find a professional who can help them. They can identify the unknown for you. Don’t be afraid to ask for help.”
– Jennie Moore, Moore Details Bookkeeping
“Giving accounting and bookkeeping low importance and cheaping out. This includes hiring a really low-level employee or having an untrained family member or spouse handle the books. Buying cheap computers or having slow internet access turns them off from doing the work as well.”
– Hector Garcia, quickbooks-training.net
How should small businesses utilize cloud technology to streamline their accounting?
“Get on the cloud, get the apps, and find an accounting professional who is comfortable with technology.” – Elaine Orr, BalanceSheets.ca
“You should talk to people already using these tools. Each business is unique and the most amazing app out there may not be the right one for you. If you decide to go for cloud based services, make sure your bookkeeper has knowledge of the applications out there. Ask for pros and cons of using X or Y and how they fit with the rest of your organization’s processes. You want a nice flow between all your operations!” – Rustin Smith & Azucena Saucedo, Scalability
“Use as many apps as you need to run your business. Hubdoc, Expensify, TSheets, and QuickBooks Online all help streamline and eliminate clutter. Outsource your bookkeeping to companies like Sum of All Numbers!” – Holly DeVito, Sum of All Numbers
What is the biggest mistake small businesses make with accounting and bookkeeping?
“The number one mistake that we see startups make is not managing their accounting on a monthly basis. If you’re a startup, you should manage your finances every month for a number of reasons. It helps you catch inevitable mistakes, benchmark your milestones, and prepare for taxes. It also helps avoid expense creep. We had a CEO whose M&E had grown from $1,000 a month to $11,500 in nearly 9 months time. $2 Starbucks purchases can cause your accounts to balloon out of control if you’re not reviewing your financials regularly.” – Vanessa Kruze, Kruze Consulting
“Trying to go cheap with a low cost service provider.” – Hector Garcia, quickbooks-training.net
“Not doing it and feeling like it’s a ‘have to’ task for taxes only. If you don’t know what’s going on with the financial health of your company, how can you know what you need to fix?”
– Holly DeVito, Sum of All Numbers
What advice would you give to small businesses?
“Pay attention to your company’s financial health and make small adjustments throughout the year. It is much easier to look forward and create a roadmap towards success, than try to fix mistakes in the past.”
– Cristina Garza, AccountingProse
“CEOs will often complain that they just don’t have the time to compile and review the financials. That’s why it’s really best to delegate this task to your in-house Controller/CFO or work with an outsourced accounting firm.” – Vanessa Kruze, Kruze Consulting
“Just do it. Quit waiting for the perfect time. Hire someone else to take care of it. You don’t have to be involved in every aspect of it. Yes you should know what’s going on and know how to read your reports, but you don’t need to be doing the data entry. Where could you better be spending those hours every month?” – Holly DeVito, Sum of All Numbers
Thanks for reading!
What do you think are the biggest do’s and don’ts of small business accounting?
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