For most entrepreneurs, being a business owner means wearing numerous hats throughout the day. The last thing you’re looking to do at the end of a busy day is to sit down and update your financials records. But whether we like it or not, keeping up with the financials is crucial to running a successful small business. Norton Financials has come up with a few tips to help you stay on top of your business financials.
1. Keep up with your bookkeeping tasks
It’s very easy to let time pass without formally updating & organizing your financial records. After all, entering transactions in QuickBooks, reconciling bank accounts, and organizing your payables is a tedious task that takes time. According to Brendan from Norton Financials, devoting 2-5 hours per week on these tasks will do wonders for your business in the long-run in terms of organization and tax prep.
2. Constantly review business performance
If you’re able to keep up with the day-to-day bookkeeping, then summarizing your business financials on a monthly basis is simple. Most of the time, it’s a matter of exporting QuickBooks data to Microsoft Excel so you can analyze performance. Once the data is in excel, you can use visuals such as pie charts for identifying the main expenses and bar graphs to compare sales performance over time.
3. Meet with a financial professional at least once a quarter
Quarterly financial meetings help business owners reiterate their financial goals and evaluate their progress. Financial professionals can use your data to help you gain clarity into the performance of your business. Their expertise will help you gain valuable insights about the financials of your company. In addition, meeting with a professional will help improve accounting techniques, as well as help identify areas to invest & improve your business.
4. Create a weekly payables list
Create a weekly payables list that includes outstanding/current/upcoming payables by due date, amount, check number, and vendor. This simple process will make life much easier in terms of organizing and understanding upcoming & past due expenses. This process also helps to plan for large upcoming expenses as you are more aware of any expenses due in the next few weeks. It’s also beneficial to cross off checks that have already been paid off this list so you can tell how many checks you’ve sent out to help you manage your cashflow without having to guess which checks are still uncashed.
5. Utilize technology
One of the best ways business owners can save time is by utilizing technology. Systems such as Quickbooks have numerous features that are intended to make life easier for small business owners. For example, Quickbooks allows users to link bank accounts to avoid the tedious tasks of manually entering each debit and credit transaction your business generates. Instead, it allows you to view all transactions in a queue and confirm or deny the entry. This is also a more accurate approach as it eliminates the risk of human error (fat fingering entries).