How small businesses can stay on top of financial management
Learn how accounting software and financial records can help your small business stay on top of financial management.
When it comes to your business finances, it's critical to get them right. Practicing good financial management means you're constantly up to date on your business's financial well-being. If you don't keep a close eye on them, you could make a mess, run afoul of the law or even find yourself in trouble with the IRS. Accurate and detailed financial records are essential to running a business, but it can be tricky to stay on top of them.
Some of the items you may need to manage as a business owner include:
Payroll (including benefits)
Why you should keep good financial records
Balancing your books regularly is a way to help ensure that everything lines up correctly.
You might need to prepare financial statements to support state filings, to share with partners in your business, or for shareholders, if applicable. Even if you don't have to report to anyone specifically, financial statements can be helpful in identifying problem areas, so you can tweak your business to help it run more efficiently and effectively.
Without good records, filing taxes and necessary reports with your state government can become burdensome. Good financial management practices make the process much less arduous.
When you practice good financial management, you have a leg-up. You're not scrambling at the end of each quarter; you aren't surprised by the numbers at any given time. Effective financial management reduces costly mistakes with the state and IRS, too.
Financial software for your business
Staying on top of all the accounts can be time-consuming, taking you away from actually growing your business. Fortunately, today's technology offers several options when it comes to financial management. Programs that allow you to manage your accounts payable and receivable, along with payroll and inventory, can provide an integrated view of your business financials.
According to a 2015 survey from SCORE (Service Corps of Retired Executives), 40 percent of small business owners say the worst part of owning a business is dealing with bookkeeping and taxes.1 A recent Intuit survey showed that QuickBooks customers saved an average of 11 hours per month by using the software.
Business financial software also helps keep track of inventory and sales, so you can quickly see what is happening, assess who still owes you money (and how much you owe) and generate follow-up invoices, reconcile your accounts and statements, and generate financial reports, quickly and easily.
It can take a little time to set up a bookkeeping program, but once you have it integrated into your business, you should become more efficient at accounting and payroll tasks — and it should become easier to prepare your taxes and reports.
Best practices are essential to your business. The good news is that you don't have to muddle through on your own. Financial software can help you stay on top of your books, boost productivity and allow you to concentrate on doing what you do best: growing your business.
1"New Infographic: The Burden of Small Business Accounting, Taxes and Payroll." SCORE. 2015. https://www.score.org/news/new-infographic-burden-small-business-accounting-taxes-and-payroll
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