Keeping up with your accounting is a necessary part of doing business. Even if you don’t do it all yourself, as a business owner it’s important to keep track of the company’s financial status. Below are five ways you can simplify your accounting so you’re always on top of it but it doesn’t take up a lot of your time.
Set aside time each day to enter sales, receive payments and reconcile accounts. It’s easy to let a little time go by without looking at your financials, but the longer you wait, the harder it is going to be to catch up with your accounting. If you make it a daily habit, it will be like brushing your teeth; you’ll do it no matter what, without letting it add to the stress of running a business.
One of the easiest ways to simplify your budget, keep your accounts up to date and track income and expenses is by using accounting software. It’s hard to get away from technology these days and with good reason; it’s useful and can help you become more productive, organized and successful.
Software that is installed on one computer can make it difficult to keep track of your finances when you’re out of the office. Online accounting software allows you to access your sales receipts, invoices, accounts and other financial documents from any computer. Many cloud accounting programs offer a full suite of features that let you customize everything from billing to budgeting.
Outstanding invoices may slowly be killing your business. Invoices that haven’t been paid but aren’t quite late are a cash flow problem in the making. The longer you wait to collect them the more likely your client is to default on the payment completely.
If you’ve lost track of what you’re owed, you’ve also probably stopped communicating with the client who hasn’t paid. Chances are that client has also forgotten about the past-due invoice. It’s harder to persuade someone to pay you the more time that has gone by, so keep the cash flowing by keeping tabs on open balances.
Budgeting may be one of the most vital accounting activities you perform in your business. Creating an annual budget can cut down on the amount of time you spend managing your money throughout the year.
Online accounting software can come in handy when you’re establishing a budget. You can easily pull reports based on sales and expenditures from previous years and use them to forecast future spending. In addition, cloud accounting is often responsive, adjusting budget calculations based on the information entered into the software. This is an easy way to limit unnecessary spending, increase profits and strategize for future growth.
Key performance indicators, or KPI, provide data that helps companies measure progress toward their goals. Profit and expenses are key indicators of a company’s performance, but so are more detailed markers, such as percentage of returning customers. Keeping track of the KPI that are significant in your business can help you look at what is working and what isn’t working and adjust different areas of the business accordingly.
When monitoring your accounting, keep in mind that having all of the information easily accessible and in one place can make your life easier. Accounting software can provide you with the organization you need to examine your financials. It makes it easy for you and boosts your productivity.