Accounting: Doing It Yourself
You have started a small business and have used most of your start-up money doing just that, starting-up. Now is an imperative time to keep your finances in order. While it may seem like the easiest solution is to hire an outside accountant to rifle through piles of receipts and invoices, it is not the most practical solution. You can do it yourself.
There are many software programs that you can install for cheap or for free that can aid you in keeping track of your own finances. If you can’t afford to take the time to learn how these work or would rather stick with something that you know, an Excel spreadsheet can serve your purpose too.
In the Beginning
Keep your business accounts and your personal accounts separate. You are just adding additional steps to your accounting procedures by mixing business and pleasure. Sure, it may have been more convenient at the time to whip out your business credit card, but now you are left to sort through a pile of half-readable receipts to find what was business-related and what was not. So, from the beginning keep those accounts separate.
Read through your finances once a week. If you open a small business and immediately entrust the paperwork to an outside source, you never have a clear idea of your profit margins and what you are spending. By sitting down with no distractions (this means at a desk or a table where you can spread everything out) once or twice a week, it allows you to track where your money is going and where it is coming in from. Additional benefits from this approach, is your ability to make more informed decisions about your business, and your stress level is lowered knowing that your finances are in order.
Who are you paying? One of the largest portions of your daily spending goes to paying your labor force. Who are your employees? Are they doing all they can do? Are they earning their pay? Keep track of any expenditure related to your employees, regardless if you are the only one on the payroll. Benefits, perks, and overtime can sky-rocket the amount of money your employees are eating up. Does anyone have a company credit card? Are you tracking the purchases to make sure everything is necessary and business related? Paying attention to all of these things can help you get an accurate picture of how much you should be paying in wages and if you are overspending your budget and need to let someone go.
In the everyday life of your business it may seem like more money goes out than money coming in. Let’s try and change that.
Traditional advertising can be expensive, try some of the other alternatives.Advertising online and paying for sponsored ads can be a waste of money when there are so many other options available. Using SEO keywords in your website text can boost views as well as the order in which your website appears in a search engine. Another popular way for advertising is compiling an email list and organizing it in terms of what customers are interested in what products, sending out information via email can be researched and edited to promote your business properly.
Stop paying for templates and software. There are many available templates and software online that you can utilize for free. Create a free invoice with a website instead of paying a company to print off and design invoices for you. In the same way, do not pay for accounting software when Excel documents are available to you. You can also produce flyers and brochures yourself versus outsourcing the job to printing companies.
While doing it yourself can save you money sometimes, it is important to remember that getting in over your head can be stressful and inefficient. If you feel that outsourcing a job or buying a piece of software will help you in the long run and de-stress your life, then trust your gut; you are probably making the right decision.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.