The #1 Bookkeeping Mistake Growing Businesses Make (And How to Fix It)
Many business owners treat bookkeeping as an afterthought. That is until mistakes start costing them money. This blog will outline:
Why poor bookkeeping can lead to cashflow issues.
How to keep records effortlessly
When to outsource
Statistics show that around 50,000 small businesses fail each year in the UK because of cash flow issues. The truth is if you don’t have robust bookkeeping practices in place, you can’t manage your cash because you don’t have clear, accurate, up to date data to do so.
Best practice for any business however big or small is to embed from the beginning, processes around managing your business finances. It is easier to do this from the get-go, because typically you have the time to invest in doing it whilst you are trying to grow and it’s easier to do so because there is less volume.
We see it time and again where businesses don’t to this and then all their marketing and sales promotion kicks in and they just can’t cope with the “keeping on top of all the bookkeeping” because they haven’t embedded those processes.
The number 1 way of helping to make this effortless is to use accounting software. They all do the same thing at a basic level and there are enough of them with range of price points to meet most businesses needs however small. So, if you take nothing away from this blog other than to start to use software my job is done.
Another thing you can do to help, is to embrace finance Fridays (it doesn’t have to be a Friday). The concept of finance Friday is that each Friday on your to do list or time blocked in your diary (if you are a time blocker) is the task of finance – each week can look different as to what you do and on busy weeks it might only be 15 minutes.
But its dedicated time set aside for business finances.
For example, you might send all of your receipts or invoices to your software, check if anyone owes you money and chase them, finish off the month’s bookkeeping, review your metrics or performance. This way it becomes a habit and when you grow, even if you are outsourcing the “doing bit” the habit will be there for you to have dedicated weekly finance time in which you can then use the data prepared for you to make decisions to ensure your business is heading the way you want it to.
The number 2 way of helping to make this effortless is to outsource it. It will save you time, it will save you money, it will mean you can focus on what you do best, it will mean you can use the data and not waste your time processing it.
Bookkeeping really is the backbone of a financially healthy business. If yours is not in tip top shape, its time now to make a change.
And if you are a business owner who wants a bookkeeping system that scales with your business book a call with us today.
