Running a business is hard. It’s hard whether you’re a struggling freelancer or a CEO leading a large team. And, sometimes, operational processes fall to the wayside. It happens to the best of us.
Accounting is often one of those items. We all know it’s important yet it still manages to fall off our radar.
There are many benefits to keeping your books up to date that go far beyond being ready to file your taxes on time. It creates opportunities for your business and helps you be a better operator.
Let’s jump in – here are the eight ways accounting makes you a better entrepreneur:
1) Make financial decisions with confidence
Cloud accounting solutions, like Xero and QuickBooks Online, automatically import your financial data. It’s never been so easy to know where you stand financially.
We’re reminded of the adage, ‘Knowledge is Power’. Armed with up to date financials, you can make decisions about your business’ future with confidence.
2) Stay on top of receivables with ease
Cashflow is the lifeblood of any business. Knowing if an invoice is outstanding is critical. Most accounting solutions will give you this functionality.
You can also get paid faster by using a user-friendly invoicing solution like Freshbooks. Their product auto-invoices repeat customers and sends out auto-payment reminders on your behalf.
Again, doing your accounting helps you ensure your business is in strong financial health.
3) Identify potential business challenges early
Accounting has this clarifying quality. It highlights business areas that need your focus. If a cost is rising each month, it’s easy to see that trend and take action. By maintaining up to date books, issues can be handled before they compound.
4) Year-end taxes become less stressful
Tax is a word that makes many recoil. It’s associated with general financial stress and shoeboxes of crumpled receipts and invoices. It does not have to be that way.
Through consistent habits and great software, you can rid yourself of that stress. QuickBooks Online and Xero have vibrant add-on ecosystems. There are apps that will sync your docs (and their data) to your accounting, ready to be reconciled against your bank feed. And, to do this, it only requires that you take a picture.
Come tax season, your receipts and invoices have been entered in your accounting. This makes filing for taxes a breeze and makes it easier to maximize your tax return.
5) Manage employee expenses at the click of a button
With purpose-built apps like Expensify, it’s a cinch to keep an eye on employee expenses. Your team can submit expenses from their mobile phone and you can approve them on the go.
6) Accurate financial reporting and adjustable forecasting
See exactly what’s been going in (sales & income) and out (purchases, expenses) of your business, using your accounting data. Spotlight and Fathom help supercharge this experience with consumable visualizations and business intelligence.
And, with cash flow forecasting from Float, see what your financials will look like in the future.
7) Audit-proofing can be part of work you do anyways
North American tax agencies mandate keeping copies of your key financial documents for years. This can contribute to financial stress and disorganization.
But, there is a solution. Small business owners can leverage software to backup their documents in the cloud. Products, like Hubdoc, automatically fetch business documents and turn receipts and bills into transactions in your accounting. That keeps your books up to date and audit-proofs your business in one go.
8) Stronger collaboration with your team and advisors
When your team and advisors are all operating from the same information, you have a stronger team. By keeping your accounting up to date, you ensure everyone’s on the same page and can act in lockstep.
Summary
The benefits of small business accounting are clear. The key is ensuring this operational process doesn’t fall to the wayside. It’s the only way to keep experiencing these benefits.
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