Improve Your Small Business Bookkeeping with MYOB AccountRight PlusDonna Marie Padua
MYOB AccountRight Plus is a highly-trusted bookkeeping solution for businesses in the market today. Bookkeeping is the bane of most business owners’ existence. But ignoring our books or putting them on the back burner can be one of the costliest mistakes we ever make.
A few years back, SCORE conducted a poll asking entrepreneurs what the worst part of owning a small business was. A whopping 40% answered bookkeeping and taxes.
That survey wasn’t an anomaly. In that same year, TD Bank asked over 500 business owners that same question, with 46% listing bookkeeping as their least favorite task. A 2012 survey by Mavenlink had 41% of respondents giving that same answer.
So, it’s no wonder that so many small businesses put it off for as long as possible. Of course, if a person despises doing something, it’s not exactly going to jump to the top of their to-do list. But, unfortunately, this can have a severely negative effect on a business’s performance. It is why you need bookkeeping solutions like MYOB AccountRight Plus.
MYOB AccountRight Plus expands your business management duties beyond finances. Investigate simple solutions that will assist you in managing your inventory as well as tracking your payroll. Make professional invoices and make sure your taxes and bills are paid on time.
So, what can be done to fix it? Short of miraculously developing a passion for accounting, what are some simple tricks to reduce the pain around bookkeeping?
Understand the purpose.
One thing that has helped many of our clients is understanding why they’re doing their books in the first place. To be able to file their taxes? To provide records to a bank for a loan? To give something to their annoying CPA to get them off their backs?
Sure, all of those things are real reasons. But they are far from the primary purpose that bookkeeping serves.
Accounting is called “the language of business.” A business’s books are the truest reflection of its operations. They show the successes, the failures, and the opportunities. They provide data on cash flow, receivables turnover, seasonality, and the profitability of different products and services. They give a snapshot of the business’s performance – all backed up by cold hard data. As a friend of mine bluntly put it, “If you don’t know your books, you don’t know your business.” They can and should be the cornerstone for almost any major business decision.
If we view our books as the invaluable tool they are, then the process of creating them will become a bit less painful. And if we accomplish that, then we’ll be much more likely to keep up with them.
Review the reports.
This dovetails with the previous point, but at our firm, we are often amazed at how often a client tells us their books are completed, only for it to be clear they have not once looked at the reports. And we’re not talking about minor errors, but rather major items, such as “uncategorized expenses” of $200,000 on the profit and loss or a bank account that is supposed $50,000 in the negative on the balance sheet. The client hates bookkeeping, so they did all of the data entry (as they felt required to do), but then we’re done with it.
But they are really short-changing themselves by doing that. They’re doing all of the hard work and receiving none of the rewards. Having the reports to review and analyze is interesting (relatively speaking) about the entire process. These reports give us the ability to manage our businesses better. We need to take advantage of that.
Take small bites.
Admittedly, even with all of my encouragement, people will only “enjoy” their bookkeeping just so much. The tendency will still be to put it off for as long as possible. But beyond losing the valuable information from their reports during that period, that sort of procrastination will also drastically decrease the likelihood of the task ever getting done at all.
That’s the biggest trap we see people fall into. They keep delaying doing their books, and the number of work snowballs. Spending 20-30 minutes doing something you dislike is bad enough. Spending an entire day or more catching up seems unbearable.
So, do it in small bites. Input your transactions monthly or, ideally, weekly. It takes very little time, you’re actively managing and tracking your finances, and it prevents the work from building upon you.
Accounting software has come a long way in the past decade. For example, many services tie directly into bank and credit card accounts – downloading all of the transactions into the accounting program. Not only that, but they learn over time to which expense category each vendor is tied, which further automates the majority of the process.
We don’t have to sit down with a pencil, paper, and abacus. Instead, we should utilize all of the tools available to us through accounting and bookkeeping software like MYOB Accountright Plus to streamline the process.
Hire someone else.
If nothing else works, hire someone to do it. We often tell our clients, “We don’t care who does it. You can do it, we can do it for you, or you can hire someone else to handle it. If doing it ourselves is simply not working, we may need to delegate it to someone else. What matters is that it gets done.”
Switching from paper records to digital records will be a pain in the short term. It involves a lot of change, but when the switch is complete, your recordkeeping will be faster, easier, and more accurate, which eliminates a major source of pain in your bookkeeping.
Digitizing receipts is often the first step. Mobile apps are great at this, and they can even replace bulky printing equipment and filing cabinets when the transition is complete. You can digitize every receipt your company holds, but you will still need to print customer receipts on demand.
You can digitize ledgers and all of your records too. In fact, many accounting software packages include record organization in their features. Once you take the time to digitize paper records, you can sift through them with ease, and the software can even automate a lot of the tracking and records management.
Perform regular audits.
This might sound like heaping mountains of pain onto the misery of bookkeeping, and that’s half right. Audits do additional work to the process, but they will ultimately save you a lot of pain and headache when used correctly. The regular audits will find systematic problems with your bookkeeping, and when you resolve them, you’ll find that everything runs more smoothly.
A proper financial audit takes some planning. Start by gathering your financial documents (which is so much easier once you’ve digitized everything). Then, you’ll use your software to review the numbers and find any discrepancies. You’ll also go over your tax records to see how numbers are changing over time. Most importantly, you need to review your internal control policies. In other words, make sure only the correct people have access to all of this data, and they are going to be directly accountable for problems that you find.
Take a course.
It’s hard to admit, but in many cases, the small business owner is the primary source of the bookkeeping pain, mainly because it just isn’t their area of expertise. You started your business to do something you care about; bookkeeping is just something you’re required to do. Usually, things become more enjoyable when you get better at them. An online course on bookkeeping or small business accounting can fill your head with context and understanding. You’ll know why different parts of the process are important, and you’ll get valuable tips from experts in the field.
Separate the personal from the business.
It’s such a common trap: Many small businesses, especially LLCs, combine personal and professional finances. It’s all your money, so it makes sense to look at the big picture, right? Unfortunately, this is a huge mistake. You don’t just want to itemize personal and business transactions separately; you should have an entirely different bank account for the business. The only money from that account to your personal account should be the wages you pay yourself.
This segregation makes it so much easier to track your finances and keep a close eye on your business’s performance. Completely separate the transactions and bookkeeping, and you’ll be much more likely to stay ahead.
The information generated by your company’s books is too valuable to delay or ignore. The health of your business is ultimately at stake, and sticking your head in the sand or habitually procrastinating can be a fatal business mistake.
Accounting is a vital aspect of every business. If your company were a human body, the accountant would be its Central nervous system. It would monitor all of the actions and transmit corresponding signals that help the body protect from dangers and be happier and stronger, both short and long-term. Their work is very complex and challenging; thus, it is highly valued. However, you can opt for less costly solutions for proper accounting by nearshoring instead of overspending.
In this new normal economy, it pays to have the best tools for your business amid lockdowns, decreased foot traffic, remote teams, or even migrating your business online. Cloud-based touchless solutions such as MYOB AccountRight Plus should be a staple in every business, big and small, to preserve health safety among your employees, consumers, and community. So head on out to our online software store in Australia to check all of our hot offers for individual and business customers, or follow us at @SoftvireGlobal for the latest updates on our best deals and promos.