As a business owner, you might think that you can manage your finances yourself. But, with a demanding workload and pressing priorities, it can often fall to the end of your to-do list. And, this can impact your business in more than one way.
Here, we explore some of the most common mistakes small business owners make when they opt for a DIY-approach to finance.
Inaccurate financial records
Your business accounts might as well not be there if they’ve been kept inefficiently. While it might only look like one or two mistakes on the surface, it can result in bills being paid late and money being lost. Not to mention, a stressful tax season.
But, that’s not all. Incorrect record-keeping could also harm your business later down the line and inhibit your ability to plan for the future. Without the correct figures, you could easily overspend or get into debt.
Not separating personal and business finances
Many entrepreneurs use their business and personal accounts interchangeably, but this can make it harder to keep track of business expenditure. Without this ability, it won’t be clear which transactions are for which account come tax season.
You also run the risk of missing any expenses that could be deducted. And, it’s likely to cause problems when it comes to applying for a loan. Separate accounts make it easier to assess and monitor your financial position.
Poorly managed cash flow
Without effective accounting processes in place, there’s also the risk that your invoices will be delayed – or that you won’t have chased any unpaid ones. Billing customers is essential to success and, without it your business may struggle to cover its bills and manage cash flow.
This can significantly halt your attempts to grow, and a number of businesses have failed because of such problems.
Not preparing for tax season
Filing a tax return requires a number of different documents – and, a lot of time. While doing it yourself may look like the better and cheaper option, when it comes to accuracy, having an accountant to do all the hard work will transform your life and business.
Tax season can creep up on you, especially when you have hundreds of other things to remember as a business owner. Having an accountant to manage your accounts throughout the year will not only leave you headache-free during tax season, but can also help determine where your business is financially.
Life as a small business owner is difficult enough, and there’s no reason to add the stress of accounting on top of it. Our friendly team have the expertise, and time, to take control of your finances and do what’s necessary to propel your business to the next level.
Want an expert team to look after your finances, and protect your business at the same time? Get in touch today through our online contact form.