As business owners, we have a lot on our plates.
With everything you have to do, it can be easy to put off back office tasks such as keeping your books clean and standardizing accounting procedures. Making time to streamline your bookkeeping and accounting processes, now, can pay dividends in time spent on those tasks, helping you make better business decisions and creating more time to focus on running your business.
To help get you on there, here are 4 super helpful tactics to streamline your business’ bookkeeping.
1. Invest Time in Learning the Basics – But Know Our SBS is Here for You!
Let’s be honest … you didn’t start your own business to keep up with the books. Keeping up with the books would not only take time away from running and growing your business, but it would also likely leave you stressed and potentially prone to costly mistakes down the road. But don’t worry because our dedicated team at SBS Accounting & Advisors is here to help!
That being said, it’s a good idea to familiarize yourself with the basics. There are some great free resources online, including SCORE’s course on acounting, as well as paid trainings. When you search through resources, be sure they cover what information you need to track, why it’s important to your business or the government, and how to read the three basic financial statements: a balance sheet, a cash flow statement and an income statement. (We’ll give you a sneak preview of how the financial statements can help you below.)
2. Lean in to Automated Accounting
Keeping paper receipts, invoices and bills can seem like the simplest way to track your sales and spending. And it’s tempting to keep your financial data in spreadsheet software like Microsoft Excel or Google Sheets that are readily available. However, paper and spreadsheets are tough to scale and even harder to automate. They also open you up to security issues that can do a lot of damage.
Using professional accounting software improves workflows, invoice processing time and organization, and ensures the financial health of your business. After all, if you’re aiming to grow, your accounting software needs to be able to scale along with you, pull in the transactions and other third-party data you use, and be easy to implement.
At SBS, we’re fans of QuickBooks Online. The cloud-based setup gives you the flexibility to use the software wherever you’re located, including from mobile devices and tablets. It automatically generates financial reports and helpful snapshots of the state of your business, so you can spend less time putting together your finances and more time acting on financial insights. That, in turn, helps us create an actionable, strategic plan to take your business to the next level.
Your accounting software should have great customer support, an extensive knowledge center and user-friendly interfaces. At SBS, we will ensure your QuickBooks Online is catered to your business’ needs, and help you get the most out of their most useful features, which are continually improving and evolving.
3. Build Recordkeeping Hygiene into Your Regular Check-Ins
Clean records are essential for accurate accounting, taxes, budgeting and planning. At SBS, we will work with you to make sure you are keeping accurate records. At the same time, there are a few things you can do to personally stay on top of your records.
Creating time on your calendar to check your books each week is crucial to be sure your business has accurate records of cash in and cash out. Keeping those records properly organized – even when using accounting software – ensures that your reporting actually reflects the state of your business at any given time.
Staying on top of your books also means that you can catch red flags, inaccuracies or even fraud. Compare your credit card and bank statements to be sure all the spending is yours. If you spot charges you don’t recognize, you’re in a good place to contact your bank or credit card company about potential identity theft. As part of a good financial hygiene process, you may also want to subscribe to a credit monitoring service.
4. Take Advantage of the Data in Your Financial Reports
Your business numbers tell a story – and if you know how to read the story, you can change the ending.
At SBS, we make sure you have the essentials each month to accurately track the state of your business, including a balance sheet, cash flow statement and income statement. These statements provide the data we need to help you plan, budget and make sound business decisions.
Our team is dedicated to going the extra mile to find key strategies to turn your data into powerful growth. One such strategy is finding the key performance indicators (KPIs) that are important for your specific business and using them as a driving force to help you grow and flourish. Once you are able to gain these insights behind your business’ data, the sky is the limit!
With that being said, here are some basic questions and info surrounding balance sheets, cash flow statements and income statements that you’ll want to know as a business owner.
A balance sheet shows the assets you own and the liabilities that you owe to others. It can answer questions about your franchise, such as:
- Is the business cash strong?
- How long could we survive on our current holdings?
- Is there too much debt?
- Do we have enough working capital?
A cash flow statement essentially shows your bottom line. If you’re applying for a loan, banks want to see your cash flow statement. It can also help answer questions, such as:
- How much money are we earning?
- How liquid is my business?
An income statement, also known as a profit and loss (P&L) statement, shows your current financial activity and non-cash assets. When you look at income statements from a range of dates, they can show you consistent trends over time. It can also answer questions, such as:
- Is gross profit high enough to pay the bills?
- Are we taking too much cash out of the business?
- Am I investing enough to grow the business?
Ready to Build out Your Financial Fundamentals? We’re Here to Help!
Kickstarting healthy financial habits for your business doesn’t have to be overwhelming. SBS Accounting & Advisors can help you learn the ropes, implement the solutions you need, and work through your accounting and bookkeeping processes. We want to leave you with the confidence to use your financial data and train your team on processes that help your business run smoothly.
If you’d like to talk about your pain points or get started today, don’t hesitate to contact us today. Taking the first step now can set your business up for even more success in the future.