There are plenty of entrepreneurs and business people who really don't have training in the basics of accounting and financial management.
This knowledge gap can potentially lead to what we in the accounting industry refer to as 'messy financials' – a set of business accounts that's disorganized, not up to date and has little or no process around how the numbers are put together.
There are also many entrepreneurs who don't believe their financials being in this kind of mess is such bad news. As long as there are dollars in the bank and sales coming in, you're happy and content to ignore the problem of messy financials.
But this is actually a serious situation: messy financials are SERIOUSLY BAD for the future success of your business venture.
This knowledge gap can potentially lead to what we in the accounting industry refer to as 'messy financials' – a set of business accounts that's disorganized, not up to date and has little or no process around how the numbers are put together.
There are also many entrepreneurs who don't believe their financials being in this kind of mess is such bad news. As long as there are dollars in the bank and sales coming in, you're happy and content to ignore the problem of messy financials.
But this is actually a serious situation: messy financials are SERIOUSLY BAD for the future success of your business venture.
Messy financials = running your business blind
If you don't know your numbers, your margins or whether you're actually making money, that has a knock-on effect across all areas of your business – especially when your tax return is filed and the results don't look good.
Not having clean financials is like being dropped from a helicopter in the middle of a jungle without a map – you know how you got there but you can't move forward as you have no sense of direction, no route map to work from and no points of reference to refer to. And this leads to additional problems:
There's a real need to clean up your financials and get clear visibility of your business and its important numbers.
Not having clean financials is like being dropped from a helicopter in the middle of a jungle without a map – you know how you got there but you can't move forward as you have no sense of direction, no route map to work from and no points of reference to refer to. And this leads to additional problems:
- You could end up being bitten by the IRS if your return is missed or incomplete.
- Annual audits, if applicable, become a headache as there's no audit trail and no documentation.
- You're not able to get funding easily, or even sell your company, as you have no clean financial data to show and share with investors or potential buyers.
There's a real need to clean up your financials and get clear visibility of your business and its important numbers.
How you overcome these issues
Here are a few practical ways to kick those numbers into shape and start getting your accounts properly organized.
Get in touch with us and let's work together to get your finances into shape.
- Work with a good accountant – Since accounting and bookkeeping are not where your expertise lies, getting the experts in to help you is always the first place to start. Pick someone you like working with, and who explains those financials in a way you understand.
- Learn the accounting basics – Work with your accountant, and look at online resources to learn the basics and get familiar with things like profit and loss, cash flow and profit margins, etc. Quickbooks Online has great video resources to help business owners who don't want to take Accounting 101 classes.
- Use software and tech – Technology and software can help you engage with your numbers. The cloud accounting software we mentioned will get you organized and provide simple, easy-to-use bookkeeping and financial reporting.
- Have clear processes – Combine your accountant's financial experience and the flexibility of technology to create simple, easy-to-follow processes for all your bookkeeping, invoicing and payment tasks.
Get in touch with us and let's work together to get your finances into shape.