As a business owner you may be doing your own accounts, or you might have a bookkeeper or accountant doing them for you. Either way it’s more common than you think to be asking yourself one of these three things…
- What do my customers owe me?
- When do I have to pay my suppliers?
- When I log in to my accounts, I can’t understand anything!
Does any of this sound familiar? Do you know what’s going on with the figures? Do you get frustrated by not understanding any of it?
If so, it could be a red flag that your accounts are not in the best shape they could be, and the frustrating thing about it is that it doesn’t have to be like that…let me just repeat that…IT DOESN’T HAVE TO BE LIKE THAT!
So, what’s the worst that can happen if you don’t deal with this? Let’s go back to those 3 points at the start:
What do my customers owe me?
Not knowing this can be dangerous because you need a constant stream of money coming in to help you plan for all your expenses. And if you don’t know who to chase for what, you might miss money which is rightfully yours, and no one wants that.
When do I have to pay my suppliers?
If you can’t easily see when you need to pay your suppliers, you will probably end up being chased for the money and no one likes that. If your suppliers have given you 30 days to pay them and you don’t pay on time, they might insist you pay immediately on future orders. And if you still don’t pay, you might have to pay interest for late payment, or lose your right to any early payment discount which some suppliers offer.
When I log in to my accounts, I can’t understand anything!
If this happens and you can’t see how you have performed in the past, it’s really hard to make good decisions about your business for the future; like deciding how much you can spend on things like marketing, or whether you can take on an employee, or even knowing how much tax you will need to pay after your year end. Understanding your accounts will give you enough information to make good decisions.
But don’t worry, there is a solution to all of this.
First though I need to tell you that unless you are a bookkeeper or accountant, you are not expected to know how to do your own accounts. Sometimes it can be complicated even for those of us who’ve been doing it for years. You’re running your own business, which is an incredible achievement on its own, and you probably started it because you love what you do, right? You didn’t decide to do it because you wanted to do your own accounting, did you! Just think of the time you are spending on your accounts and what you could do with that time in your business. Think of how less stressful it could be having someone else take care of your accounts.
What’s the answer, I hear you ask?
- Get yourself an accountant – make sure you speak to several accountants to see how you feel about each one, because choosing to work with the one that feels right will take a lot of your stress and confusion away. And if you already have an accountant, but are still confused about your accounts, then change accountants! You deserve one who will deliver what YOU need, will listen to YOU, will learn how YOUR business works, will communicate regularly with YOU (yes, we do exist)!
- Embrace technology – it’s the way forward and it really does make your life easier (Xero is thebiz, but then I’m biased!!). There’s no need to be handing over bags of paper receipts any longer – there’s an app that you can use to upload them – SIMPLES! Software means that you can look at your accounts at any time of the day or night and get the information you need, so you don’t have to wait until months after your year end any more to see how you are performing. You get this information in real time!
- Know your responsibilities – be clear about what your role is with your accounts and what your accountant is doing for you. If you decide that you want to do your own invoicing to your customers, make sure you understand how to do it using the software and do it on a regular basis. If you don’t understand something, then ask. If something doesn’t feel right, then question it. A good accountant will communicate with you on a regular basis, and they will always be prepared to answer any questions!
And even if your accounts are in a real pickle, there is nothing that can’t be put right. A good accountant will put together a plan to get you back on track, and you’ll look back and wonder why you didn’t do it sooner!!
Why not complete our contact form to see if we can help you understand your accounts!