OK, that was a bold statement.
Let me rephrase: accounting is a source of pain for most small business owners. So, like most people, they take that pain and ignore it because it stresses them out. They shove it in a shoebox somewhere in their office and hope it goes away. That being said, proper books, and an awareness of how you are progressing financially is key to your success as a small business owner.
Good news! It is easier than you may think to get started on the road to being financially savvy.
Better news: I have three tips that will help get you on your way.
1. Ask key questions.
First, ask yourself four key financial questions to get a snapshot of where you are now:
- What are the start-up costs of your business?
- What are your sources of finance?
- What is the timing of your financial needs?
- What is your game plan for unexpected costs?
2. Track, track, track!
Compile as much financial data as you can, through an application like Wave, or by collecting receipts, spreadsheets, and bank statements. Once you have an idea of where you are spending your money, make a commitment to tracking your finances monthly and checking in on them weekly. Get acquainted with your income statement. You two should be very close.
3. Create a financial action plan.
Managing your money is scary, but now that you know how much you have and how much is coming in and going out every month, you need to set some concrete goals. Where do you want to see your business progress in three months? Six months? One year? What steps are you taking right now to see those goals through?
Online cloud accounting applications can help you get there faster. Check out Wave Accounting, a free online cloud application for some easy and fast accounting help!
Sarah Stockdale is the New Business Development Specialist for Wave Accounting, a digital startup that produces free online accounting tools for entrepreneurs and small business. Visit waveaccounting.com for more information.