You are happy, fulfilled, and living your best life when you can make a living doing what you enjoy or are good at. That is until it comes time to do the accounts.
Whatever type of professional or small business owner you are, you’ll eventually have to keep track of your money — what you get paid and what your payout is. Accounting may show you where your money goes, but it isn’t why you started a business.
As a young entrepreneur, you can do the following to make it less about accounting and more about what you do:
Make yourself responsible for your accounting
First and foremost, whether you’re running a side business or a new business, you need to know if you’re profitable. After your products or services have been delivered and your vendors have been paid, profit is what’s left. There are some accounting terms to understand, such as what an asset is and what a liability is, but focus on the aspects that are most important to you. You’ll be hiring people with advanced degrees to account for your money by the time you need to know about advanced concepts like weighted-average accumulated expenditures on self-constructed assets. Until then, find an accounting platform that communicates with you.
Make Accounting Simple
Keeping track of your finances will eat up your time as few other things can. Yes, tossing all your receipts and bank statements into a box to deal with later is convenient, but then “later” arrives, and you have no idea why half of that paper ended up in that box. The power of an organization is yours with a cloud-based accounting platform. It keeps everything in one place, making it simple to scan, categorize, and review documents whether you’re at your desk or on the go.
Tell a story with your accounting
As an entrepreneur, you’ll probably think of accounting in terms of income taxes all of the time. However, in order to fund the things you want to do in life, you’ll need to devise a strategy that will take you from “once upon a time” to “happily ever after.” Accounting reports based on current, accurate data can help with this. A profit-and-loss report, for example, can show you how to improve overall profitability by laying out revenue and expense trends. Your balance sheet shows you how your business has changed over time, including whether you’re at risk of bankruptcy (bad) or have cash on hand to invest in the business or buy something for yourself (good). These reports also allow you to see how your plot develops over time. Is it possible to hire more people and will it be profitable? Do you have any expenses that you could cut?
Make accounting your key to making confident decisions
Having current and accurate information makes it easier to make decisions and reduces stress. Find an accounting platform that converts your receipts, bank statements, invoices, and bills into digital, searchable documents and matches them to your banking information automatically. It will detect errors such as double billing and simplify tax preparation. You’ll notice that once you’ve got your business finances in order, you’ll be able to think strategically. You have the ability to make sound decisions when it comes to looking for new work and expanding your services. Accounting, the lingo, and the numbers should not overwhelm or intimidate you. Then you’ll be able to accomplish your goals, seize new opportunities, and even get a good night’s sleep. You will be happy if you have confidence.
Make Accounting a Cool Friend for You
A cool friend is always there for you in real life, does what you want, and brings you pizza and beer when you need it. Just because you asked, your cool friend will do you a favor. Even if you make a mistake, your cool friend will point it out to you. Consider a cloud-based accounting platform in a similar light. You can contact it at any time. You’ll be prepared whenever you need to apply for a loan or (heaven forbid) be audited because all of the data will be easily entered and reconciled. With the touch of a button, cloud-based accounting delivers the most relevant reports when you need them. You can make plans with it, just like a cool friend.
Good things happen when you approach accounting with the above in mind, such as feeling in control of your finances and making good decisions.
Learn more from business and read These 3 Legal Mistakes Could Destroy Your Business.