EA - Bad Habits that are Sabotaging Your Business Finances

Bad Habits that are Sabotaging Your Business Finances

Even if you have the best intentions for your business, it is likely that bad habits (both big and small) are sabotaging your efforts. Have you identified habits that might be impacting your bookkeeping practices, business finances, cash flow, and more?

Small Habits are Worse Than You Think

Some of these habits might be obviously bad, but they don’t seem to be impacting your business in a terrible way. But, don’t let yourself be fooled. The smallest habits can have a compound effect over time. In fact, your daily, weekly, and monthly habits are key indicators that will affect your business success in the future.

For example, an overflowing filing cabinet with poor organization might seem like a nuisance. But the lack of organization with your paperwork could have a domino effect on your tax deductions, customer billing practices, and more. Not only will important information be overlooked along the way, but you will also spend an unnecessary amount of time sifting through papers when you need to find a specific document.

Instead of letting these small habits take away from the more important business tasks that need to be addressed, it is time to make a change that will improve your practices.

Important Bookkeeping Practices that Need to Be Fixed

Here are some of the worst bookkeeping and accounting habits that are causing problems for your company. You need to be aware of these problems, then commit to making the change that will turn things around for your business going forward:

  1. Messy Paperwork: Invoices, bills, contracts, and random paperwork can make you feel like you are buried in stacks of nonsense when you are sitting in your office. If you aren’t organized with the paperwork, then it will have a domino effect on all aspects of your business. A lack of organization with the paperwork means that you are likely missing deadlines and paying late fees because you can’t keep track of the necessary information. Put together a filing system and set aside time in your schedule to ensure that you are keeping up with the filing throughout the year. Your accountant can offer information and advice about the information that should be kept in your filing cabinet.
  2. Poor Deadline Management: Regardless of your industry, you always have deadlines and due dates that need to be managed. Failing to set these deadlines and adhere to them means that you could be missing key points along the way. For example, do you have a schedule to manage the frequency of when reports are run and analyzed for your business finances? If you are only looking at these reports once a year at tax time, then you are missing out on opportunities to improve your business strategy throughout the year.
  3. Not Saving for Taxes: One of the most stressful things that you can face as a business owner is a hefty tax bill that can’t be paid because you don’t have the cash flow when the deadline comes up. It’s no surprise that taxes need to be paid… you can count on it happening every year. Make sure that you are prepared by setting aside a specific amount of money so the cash is available when the taxes are due. Also, keep track of quarterly estimates and payroll tax deadlines to ensure that you are meeting the tax payment schedule based on the requirements of the IRS. Tax calculations and payroll management can be confusing and stressful, which is why it is important for every business owner to invest in professional financial services.
  4. DIY Financial Management: Just because you know how to balance a checkbook doesn’t mean that you have the bookkeeping and accounting skills for DIY business calculations. Working through tax laws, cash/accrual accounting systems, profit and loss reports, and other requirements for business accounting can be problematic. If you aren’t professionally trained in bookkeeping and accounting, then there is no question that you will benefit from professional support.
  5. Cutting Corners on Bookkeeping and Accounting: Yes, it is smart to save money whenever possible. But you will be making a big mistake if you cut corners by hiring a newbie instead of an industry professional. Even though you can find someone with basic secretarial skills which only costs $15/hour, it’s hard to calculate the opportunity cost of the services that come from a professional accountant. Whether you are hiring an employee or an outsourced contractor, make sure that you are paying the right amount to work with a professional. It’s worth the extra cost to ensure that things are done the right way. In fact, you will likely save money because you can avoid mistakes that could cost you in the future.
  6. Ignoring Software Solutions: There is always a learning curve when implementing a new software program for your business efforts. Even though it takes a little bit of effort to implement these systems, it is important if you want to set yourself up for the future. Talk to your accounting and bookkeeping team to determine the right software solutions that will be best for your industry. Once the software is up and running, you will benefit from the integration that simplifies your life and ensures that everything is running smoothly together. Data synchronization helps to reduce errors that pop up due to manual calculations and will improve efficiencies as well.
  7. Standardizing Business Financial Systems: Failing to have standardizations in place for your ongoing systems is a mistake that could take a toll on your success. Do you have a set schedule and standard practices in place for client billing and management? Consider the ongoing systems that affect the money that flows in and out of your business. Then, create a standardized system so that all employees, managers, and contractors are on the same page with expectations going forward.
  8. Ignoring Financial Reports: When you are busy managing employees, working on business development, and coordinating the new marketing plan, it probably feels like financial reports are low on your priority list. Don’t make the mistake of assuming that you only need to look at business finances at tax time. The most important thing you can do as a business owner is to understand key accounting metrics so you can track this information throughout the year.

Tapping into Professional Support to Change Bad Habits

Now that you’ve identified some of the bad habits that are affecting your business, it is time to make a change. But the best of intentions won’t make a difference if you aren’t willing to change ongoing actions and practices. Without the right systems, you will be facing ongoing problems in the future that will impact the success of your company.

As a business owner, the best thing you can do is tap into the professional support that is available to change your bad habits. Spend the money on services to ensure that your bookkeeping and accounting systems are set up in a way that will support your success going forward. Even though it costs a bit of money for the setup and ongoing maintenance, view this spending as an investment for all of the benefits that are available for you in the future. There’s no question that the right bookkeeping and accounting services can optimize your spending, increase profit margins, and maximize tax deductions that are available.

Let the Pros Fix Your Bad Habits

Often, the worse accounting and bookkeeping habits pop up when business owners attempt a DIY approach with their business finances. You need to be willing to let go of these habits, which means that it is time to implement the advice that comes from an industry professional. Tapping into the expertise that comes from an accounting team means you can get rid of these bad habits. Trust that your financial tracking and reports are in good hands, then turn your attention to other business responsibilities that need to be handled throughout the year.

As you are choosing an accounting team, make sure you find a contractor with experience helping small business owners. This ongoing expertise gives you the benefit of tapping into proven systems and strategies. You don’t need to reinvent the wheel when we already have formulated the best practices that can be implemented into your business.

Will You Benefit from Outsourced Accounting Services?

Right now is a great time to evaluate your business finances and determine the areas that need improvement. As you look at the weak points in your business, you will find that outsourced accounting services can be the perfect solution to fill in the gaps.

Look for experienced contractors that offer a variety of accounting services. It is essential that you find a team for ongoing accounting support, instead of only talking to your accountant at tax time.

Easier Accounting is available to offer the support that you need. Contact us any time to learn about the accounting packages and small business services that match the needs of your business. We will personalize the services based on your preferences and needs: (888) 620-0770.

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