For entrepreneurs, staying in control of your accounting year-round is more than an additional task to add to your plate, it’s a necessity.
Your business relies on you understanding where it stands, financially, at all times. To gain that understanding, you have to know how to leverage automation, stick to your budget, mine value from your numbers, and stay on top of your regular tasks.
The good news is, with the help of an outsourced accountant, this is easy. However, if you plan to stay in control of your accounting year-round on your own, you may need some extra guidance.
Here are some tips to help you out!
Rely on Automation
If you are still working with manual processes, it’s time to make the transition to automation. Automated systems and processes can be applied to nearly every aspect of your accounting including:
- Managing accounts receivable
- Keeping track of payroll
- Inventory management
- Bill paying
Not only does automation add efficiency to your business, but it also keeps you organized without you having to perform daily upkeep. With organized processes, accessible from anywhere, you can generate reports and analyze data whenever you need them. This is essential for day-to-day and long-term decision-making.
With automation, you’ll have a strong pulse on accurate, up-to-date information all year round.
If you are struggling with finding automation tools that work best for your business, consider reaching out to the experts here at NOVAA. We can provide you with guidance for building a tech stack that drives success.
Stick to Your Budget
Your budget sets the groundwork for your spending throughout the year. It plans out all of your expenses so, naturally, to get the most benefit from it you have to keep your spending in line with your budget.
When you don’t follow your budget closely, you risk overspending, misallocation of funds, and cash flow problems, all of which can cause major issues for your business in the long run.
Consider comparing your budget to actuals on a monthly basis. This will tell you how close you are sticking to your budget and point out any areas where you may be missing the mark. It’s a great way to stay on top of your spending and ensure you are setting your business up for success throughout the year.
Realize Accounting is More Than Compliance
Many entrepreneurs miss the mark when it comes to accounting. They assume its primary purpose is to meet tax compliance, and while having accurate numbers is essential when filing taxes, accounting is much more than that.
Your numbers are full of valuable information and tell the full story of your business. If you are simply keeping up the books to meet tax guidelines, you don’t truly understand the full potential of your accounting.
For example, if you look at your statement of cash flows just to see how much money is in the bank, you’re missing the bigger picture. This report can also indicate accounts receivable problems, failure to make investments with extra funds, or the need for a better bill-paying strategy.
As you aim to stay in control of your business finances year-round, you have to make sure you are leveraging your accounting properly. If you struggle in this area, it may be time to outsource your accounting to an experienced professional. At NOVAA, we will help you see the big picture so you can get the most out of your numbers.
Create Daily, Weekly, Monthly, and Annual Checklists
One of the best ways to stay in control of your accounting throughout the year is to ensure you have a solid strategy for managing your accounting. Setting daily, weekly, monthly, and annual checklists will help you stay on top of your regularly occurring tasks – and remember, automation can help limit some of this work, as well.
When building your daily checklist, consider including tasks like:
- Recording transactions,
- Reconciling accounts,
- Recording expenses.
Staying on top of these daily will save you time in the long run.
When building your weekly checklist, consider including tasks like invoicing and managing payroll.
Weekly invoicing can help you avoid cash flow problems and having a routine for payroll keeps you from being in a crunch when the due date rolls around.
When building your monthly checklist, consider including tasks like:
- Paying bills,
- Reviewing your budget vs. actuals,
- Reviewing other reports, like your cash flow statement.
The majority of your monthly tasks are meant to keep you in check with your short- and long-term goals. This gives you the opportunity to catch problems before they get out of hand and make timely adjustments.
When building your annual checklist, consider including tasks like:
- Building a tax plan,
- Building a new budget,
- Collecting year-end financial statements.
This is a great way to regroup and get ready for the year ahead. Remember, one of the keys to being in control of your accounting throughout the year is being prepared.
Work with an Experienced Accountant
As you work to gain better control over your accounting year-round be sure to remember:
- Automation can make it easier.
- Sticking to your budget will help you stay on track with your spending.
- Accounting is more than just compliance.
- Creating checklists helps you stay on task and working towards your goals.
If you find yourself lacking the control you need to properly manage your business, consider working with an experienced accountant.
Our team of experts can be an extension of yours to build an accounting system that keeps you in control. Contact us today to learn more!