What If a Small Business Neglects Bookkeeping During the Holiday Rush?

If your small business experiences an upsurge of business during the holiday season, it may be tempting to cut corners on seemingly non-urgent things. Bookkeeping and accounting may be one of those things that fall off of your priority list when you are busy keeping your head above water. Your strengths may lie in advertising, customer service, product manufacturing, and other parts of your business. The accounting part of your small business can be better left to professionals.

As you are focusing on building your business and gaining your best holiday profits yet, find ways to lessen the stress in your life. Putting off bookkeeping to be done at a later time will only lead to unnecessary setbacks and fees for your small business. If you are shoving receipts into a bin, hoping to get organized come January, here are some things that may go wrong:

Potential Loans Are Unlikely

There may come a time that you need to go to a bank for a loan. Your bookkeeping will have to be in order if you hope for a bank to invest in your business. A loan officer asks for a detailed account of your income vs. expenses. They are looking for a specific percentage that will allow you to take on more debt while being able to pay back that debt in a timely manner. If you don’t have the books to show them, then your loan will be denied.

When you put accounting on the backburner, you won’t be prepared when you’re in a pinch and hoping to present your small business favorably to a potential investor. If you have a friend or business associate interested in your product and company, they’ll want to see the numbers before investing. It is vital to keep your business organized and presentable if that chance were to present itself.

Tax Fees and Auditing Red Flags

The problem with putting off bookkeeping for the final quarter of the year, during your holiday rush, is that you have to file for taxes come the new year. Setting yourself up for unorganized books and a backlog of purchases and income statements to go through by the tax deadline is a bad idea. In fact, if your books are not kept in real-time, it allows greater scrutiny from the IRS. If you have a strong accounting system in place, or better yet, hire a small business accounting service, then you will never be lost when it comes to taxes. The last thing you want to do is subject your growing business to tax fees and penalties because you failed to do your part with bookkeeping.

A small business that does not have acceptable bookkeeping practices in place is more susceptible to audit by the IRS. Your business is more likely to be audited if your books are not comparable to other companies in your industry. When you maintain good bookkeeping, you will clearly understand how to report your income and claim tax deductions. And you will also have nothing to worry about if you do happen to be audited by the IRS.

More Vulnerable to Theft

A small business without a strict accounting system, including checks and balances every step of the way, is vulnerable to fraud within the company. No matter how much you trust your partner or employees, every company must have systems in place that will not allow for “skimming off the top.”  The most honest people can have desperate moments if they know there is no way to get caught. Your bookkeeping system needs to have strong internal controls that will identify missing money or uncounted inventory.

Strong internal controls can include having two people be present when checks are signed. More than one person counts the money and goes to the bank together to make the deposit each morning. Inventory is counted and checked regularly. There are many ways to have checks and balances in your business to keep employees honest.

Invoices Go Unpaid

As your business grows, it may no longer be plausible to remember which client hasn’t paid or usually pays late, etc. A detailed account of outgoing services and incoming payments should always be present in your books. It will leave you feeling more confident when you seek out late payments, knowing that your books are organized. Your company’s reputation lies in sending out invoices and expecting them to be paid on time. If customers catch wind that you don’t ask for payments here and there, it will reflect poorly on your business overall.

Payroll Mistakes

When your books are not organized, then it is likely that you could be overpaying or underpaying your employees. If you have employees that are commission-based, detailed records are essential for calculating their income each month. When it comes to tax withholdings on your employees’ paychecks, if the amount is not correct, then you could be withholding the wrong amounts that will have to be corrected later if caught. This will lead to more fees.

Waste of Time With the Backlog

When you neglect to keep your small business’s books in real-time, you set yourself up for a mess of records to organize and sift through. Not only is the threshold for mistakes more likely, but the time you put into sorting and recording could be better put into building up your business for the future.

There may be some aspects of your business that you can put on the backburner during your busy times, but keeping proper books is not one of those things. If you are feeling overwhelmed, instead of skipping over accounting processes, hire a small business accounting service that will take care of it all for you. The relief that it brings you during a stressful time will be worth it.

Use Your Small Business Bookkeeping to Plan for Future Success

When your books are in order, you can use your calculated earnings and expenses to prepare for your business’s growth in the future. You will be able to hire the right amount of staff and order enough inventory for busy times ahead of you. Take a look at some ways that your diligent, consistent bookkeeping and small business accounting systems will set your business up for future success:

  • Cash Flow Projections: If your small business has an organized bookkeeping system, you will be able to predict your cash flow better and use it optimally. You can invest in higher amounts of inventory, knowing you have the money to spare and that you can expect significant returns. When you have a clear view of your cash flow, you can make deals with vendors and confidently show the business you will be offering them. This will give you the assurance to make deals that benefit your small business and the supplier’s business.
  • Clear View of Fixed and Variable Costs: Detailed books will give you a breakdown of your fixed and variable costs. When you combine this knowledge with your cash flow summaries, you will be able to have a look at which variable costs return the most profit. Making better investments into your small business is going to set your business up for success.
  • Forecast to Optimize Profit: When you get through your holiday rush this year with great success, you will want to go into the next busy season with bigger goals. It is essential to focus on asset optimization, which is the best price for each product or service that will keep the customers coming. Having records that look back on the number of customers related to the particular promotion you were offering at that time will help you plan for sales and promotions in your small business.

It is essential to use your organized accounting system to make decisions for your business. When you get through the holidays and have detailed bookkeeping to look back on, then you can use those numbers to improve your business. You can take your successful holiday season and make it even more successful for the next year.

Contact Small Business Bookkeeping Professionals

As an entrepreneur, it is tempting to do it all yourself in order to save the most money. This isn’t always possible, and it’s certainly not always true. When you hire experts on small business accounting, you can rest assured knowing that your books are well-organized and accurate. When you hire outside accountants to help your small business, you can focus on the parts of your business in which you are most passionate.

We want to help you during the holidays! When you hire professionals to take care of your bookkeeping and finances, you will receive a clear breakdown of your small business’s accounting. Having a good handle on accounting can help you better predict and prepare for the future of your company. And your small business has a greater opportunity to grow. Give our team at Easier Accounting a call and receive the accounting relief that you need this season: (888) 620-0770.

Visit an Accountant Before a Business’s Holiday Rush

Every company needs to be prepared for the busy times. Many small businesses make enough money during the holidays to carry them through the slow times throughout the rest of the year. It is essential to consult a small business accountant before a significant influx of sales and money. You won’t regret having your books in order and meeting with a small business accountant in order to weigh the benefits of particular investments in your holiday marketing strategies.

First Steps for Small Businesses

  1. Review Your Company’s History During the Holidays: When meeting with a small business accountant, be sure to look over how your business has performed in recent years during the months of November and December. Together, you can set goals for this year and discuss how to go above and beyond what you’ve profited in years past.
  2. Consider How Covid-19 May Come Into Play: This year is different because we are in the middle of a pandemic. Unfortunately, small businesses have been hit hard during this time. Meet with a small business accountant to strategize how to overcome the trials that the pandemic has introduced. It is better to be prepared and educated rather than blindly hoping for the best. A small business accountant will review the cost of safety procedures like providing hand sanitizer, installing plexiglass shields, and spreading out sales to encourage social distancing.

Meeting with a small business accountant will only benefit you as you layout your goals for the 2020 holiday season. An accountant with expertise in small business will offer ideas about navigating sales during Covid-19 and how to set your company apart from other small businesses.

Investment Options During the Holidays

Hiring Extra Holiday Employees

As your store gets busier during the holidays, more employees must be present to handle the extra traffic. No one wants to wait in line, so you can offer a second cashier. Ensure you have enough employees spread throughout the store to answer questions or offer a shopping basket to someone with full arms. People expect full attention from a small business shop; it is what sets small businesses apart.

Advertising on Social Media

Those Instagram ads that we’re all familiar with really draw people in and return significant gains. If you want to ensure an increase in sales during the holiday season, then tap into where people are spending most of their time and invest in social media advertising. Consult a small business accountant to pinpoint how much money you should invest in order to get the return you need.

Holiday Decor and Displays

If a customer chooses to shop small business this holiday season, they want to walk into a quaint, charming shop that makes them feel warm and welcome. Use your personal style to make your store feel at home. When you use decorations that are specific to who you are, you create an intimate space that feels special. Investing in holiday decorations will be worth it once you’ve made a unique atmosphere that your customers can use as an escape.

Many customers walk into a store with the intention to browse for gift ideas. Get creative in your holiday displays, posting signs of gift ideas or pictures of real people unwrapping the product. Make things more sparkly, vibrant, and eye-catching to make people feel in the holiday spirit.

Quality Customer Experience

If there is anything worth investing in this holiday season, it is the customer experience. Conduct a special holiday training where customer service is emphasized. If your employees go above and beyond to give a big smile and genuinely ask about the customers’ needs, that can go a long way. Your customers will remember how validated they felt inside your store and will want to return again and again throughout the season.

Make your checkout process simple, offering no contact or touchless checkout for those worried about germs. Have a generous exchange and return policy that is easy to navigate. Offer gift-wrapping or unique packaging that is different than the regular plastic bag. The ease of these processes will go a long way when it comes to customers choosing to shop with you for their next gift.

Promotional Pricing or Offers

During the holiday season, a small business must be competitive in offering sales and promotions. This is how you catch the customer’s eye and get them in the door. You can offer 30% off everything or a free gift for each purchase over $50. You can offer a cash bonus with a gift card purchase. Whatever the promotion, you do have to offer something if you expect an influx of customers in your store. When you meet with a small business accountant, you can go over a practical sale to offer to get people in the door while still making a profit.

Several Shopping Options

We are in the middle of a pandemic, and people will be looking to shop safely during the holiday season. Invest in an online platform if you haven’t already. Offer virtual tours of your store and curbside pickup. Take your most popular items out to the sidewalk and offer an option to shop outside in the open air for customers who feel most comfortable in that manner. Some retail companies have even provided a delivery option during this time, going above and beyond to satisfy customers.

Regular and Engaging Social Media Posts

Your social media account is vital during the holidays. Especially during Covid-19, when everyone is staying home more and looking into online shopping, then you’ll need to keep your customers updated through social media. Post about your sales regularly, and release new content daily that will pull your audience in and keep your company at the top of their mind. This will take a significant investment of time and dedication but will be worth it in the end.

Surviving a Holiday Lull

If you have had a holiday rush in the past, and it doesn’t look to be in the cards for you in 2020, then contact a small business accountant to help you prepare for that lull. Some restaurants, bars, salons, and spas may specifically be struggling this holiday season compared to years past. Here are some tips to keep in mind to get you through the hard times:

  • Don’t Overspend: Consider the current year and do not overspend on inventory to match previous years’ sales. Be realistic about how your sales have been the past several months and prepare for a small uptick that may come through holiday promotions. If you consult a small business accountant, they can use their industry expertise to find what money you have to spare and how to invest it during this difficult time.
  • Keep Holiday Promotions Consistent: If you do not see the return you saw last year during the holidays, do not get discouraged and give up. Continue with your holiday promotions and let the customers know you are always there. If they continue to see your social media posts and holiday spirit, your store will be on their mind when they get their next paycheck or a holiday bonus.
  • Stay Connected with Clients: If you have special customers, then show them your gratitude by giving Christmas gifts. Even if they aren’t spending money with your store this year, show that you care regardless of their business. Real connections will always shine through when times return to normal.
  • Be Flexible: If you can find any way to promote your business that fits with the current pandemic climate, then go for it. Offer gel nail tutorials for customers who have decided to do their own nails at home. Package your beer or wine to be picked up – you can paint a picture of nights in front of the fire with a bundle of wine and cheese and crackers. Learn how to pivot your business to keep your customers active.

Not every small business that was booming last year will experience the same in 2020. It won’t help to be in denial and think that the holidays will save your business. Be realistic and prepared for a holiday lull by visiting a small business accountant. You may think your business is hopeless, and an accountant can provide you with some hope.

Schedule an Appointment with a Small Business Accountant

It is tempting to save money and do your own accounting. But when it comes to the holidays and the potential holiday profits, you don’t want to make a blunder by offering too big a discount or hiring too many employees. Meeting with an accountant who looks at past years’ profits and takes Covid-19 shopping trends into account will only benefit you and your business.

The holidays are a busy time for every business. Ease some of that worry by calling a small business accountant today. Our team at Easier Accounting specializes specifically in small businesses. We can use our expertise to answer any questions you might have about getting your company ready for the holidays. Please schedule an appointment with us by calling (888) 620-0770.

Holidays 2020 for Small Business: Will It Be Like Other Years?

We are eight months into this pandemic and still figuring out how to pivot small businesses to fit the needs of customers. The holidays are here, and with increasing Covid-19 cases, don’t plan on seeing stores bustling with shoulder-to-shoulder people. Holiday shopping this year will not be crammed into a 3-day bonanza. More people will be shopping online than ever before. They will be shopping earlier, thinking ahead about shipping gifts to family and friends they aren’t visiting this year. What else will be different for the holidays 2020?

Covid-19 Safety Measures

The last thing you want to do is drag your feet when it comes to the safety measures your small business is offering. Get the word out there, loud and proud, and let people know all of the precautions you are taking during this time. If a person is going to a business for shopping or service in person this holiday season, they are choosing the stores that have a safety plan in place. Take a look at these safeguards:

  1. Masks: Consumers feel more comfortable walking through stores where other patrons are wearing masks. It is impossible to know who is sick, and masks give a sense of security in knowing that if someone has Coronavirus, there are at least protections in place.
  2. Hand Sanitizer: Put up stations of hand sanitizer all over. It is an extra cost, and sometimes it’s hard to take on additional charges during the holidays. When you show customers you are serious about their health and safety, you will see that the payoff will exceed the cost. You can always meet with a small business accountant to break down the numbers together.
  3. Social Distancing: You will notice in hearing commercials and seeing ads that Black Friday sales have already started. The idea is that instead of packing your store full of people for 3-days of sales, you can offer the same deals for 6-weeks. You give customers the time to spread out and not be afraid of entering your store because it is too crowded. Find creative ways to give the sales momentum throughout the holidays. Meet with an accountant to be sure the benefits outweigh the risks with this strategy.
  4. Plexiglass Shields: These safety procedures are also in place for your employees as well as your customers. For the cashiers that come in close contact with dozens of people during a shift, plexiglass shields can be placed between the customer to protect the cashier. This will give customers an extra sense of security and also show that you are a business that cares about their employees.

Now that you have the safety measures in place, advertise them in every outlet. Post signs on your doors, share on social media, and send out an email newsletter. Let your customers know that you are doing everything it takes to make their shopping experience convenient and safe from illness.

Shopping Alternatives

While online sales have significantly increased each year since 2017, they will be bigger than ever this year. With more people staying outside of busy public places during the pandemic, they’ll be turning to online shopping from the safety of their homes. If you haven’t set up your small business for online sales, now is the time to do so. Think of all the ways that you can reach people who don’t feel comfortable shopping in person:

Online Shopping

The big concern with online sales this year is shipping. USPS and UPS have already released notices that they expect substantial shipping delays this year. Combine the increase of shopping online with the pandemic safety measures taken in shipping facilities, and you can understand how packages might be postponed. Make sure you are alerting your customers to shop early. Add banners across your website and shipping alerts at checkout. Your customers will appreciate the transparency.

Curbside Pickup

For customers who want to buy local and not worry about shipping costs or time, curbside pickup is a great option. You can advertise your products and even offer virtual tours of your holiday layout in your store. This will give these customers a chance to enjoy the shopping experience from the safety of their homes. Be sure you have safety measures in place with curbside pickup by wearing masks and using trays, so you don’t have to touch hands or get too close. Set up contactless payment options as well.

Delivery Options

Some small businesses are going above and beyond this year and offering delivery. While this has become a norm in the food business, this is new to retail. If your small business has the means to do this, then offer it! Your customers gravitate toward the companies that are sensitive to each customer’s comfort levels during the pandemic. If they feel seen and understood, then they will shop with your store.

As you offer several options to your customers, they will recognize that they are valued. You can even offer a hybrid option that includes a virtual store tour with a personal shopper who sets items aside that catch the customer’s eye. There are so many ways to show you are inclusive of all customers during the pandemic.

Consumers Supporting Small Businesses

Something specific to the pandemic is that many small businesses have been negatively impacted during this time, while the huge corporations are thriving. Consider Amazon and Target; their sales haven’t been hurting but rather booming during the pandemic. Consumers are aware that small businesses have been hit during Covid-19, many companies having to close down or lay off employees. Because of this, more people will want to shop with small businesses this year to help where they can.

How can you be sure your small business is one that catches the eye of people looking to shop small?

  • Engage on Social Media: Get to know your following. Post insights into your personal life and small business journey. Connect with people personally and never leave a question unanswered. Come up with interactive posts where people can vote or share their favorite item in your store. When you are active in your social media, people feel more connected to you and remember your business.
  • Offer Virtual Services: If you haven’t already done so, now is the time to come up with virtual offerings. If you own a bakeshop, offer live baking classes where customers can pick up a baking kit beforehand. Or if your business is an art or music school, offer virtual lessons. Another idea for a hairstylist is to post hair tutorials for cutting your children’s hair at home during the pandemic. If your business is service-oriented, then take it to a virtual platform.
  • Sidewalk Shopping: For those taking precautions not to be indoors with people in small spaces, then bring your shopping outdoors. You can set up a cute display and post special hours for sidewalk shopping on sunny days. Be sure to offer contactless pay options as well. Show your customers that you are willing to make changes to fit their comfort levels during this time.
  • Giveaways: Everybody likes to get things for free! If it is between your shop and a big box store, then set yourself apart by doing giveaways. You can have a drawing or a social media contest. You can also include a free gift with purchases over a particular price. Make it fun and interactive, and customers will show up.
  • Holiday Display: Set your business apart by going all out with holiday decorating. Create window displays that draw people inside. For your customers staying home, offer a virtual tour of your business after you’ve decorated and put out your holiday-specific products. Make sure everyone gets a chance to peek inside your store.

Small businesses have a charm that people admire. Customers know they will get a more individualized experience when they shop with a small business. When you walk into a small business, you can expect undivided attention, workers invested in the product, and specialized packaging that is already gift-ready. Emphasize your shop’s allure this holiday season and show customers that you are ready for their support.

Contact Accounting Professionals

As you set up your business to thrive this extraordinary holiday season, contact a professional accounting team to help. Get your books in order before the big holiday rush. Review numbers when deciding on a free gift with purchase – how high should the purchase price be to make it worth it? An accounting team that specializes in small businesses will break it down with you and make sure your investments give you a substantial return.

Let us help you during the busy time of the holidays. If you need a consultation on keeping your accounting in line during the holidays, then call us today! Our team at Easier Accounting will answer any questions you might have about small business accounting. Schedule an appointment with us by calling (888) 620-0770.