Neglecting to maintain proper accounting records can lead to a host of problems for a start-up, from penalties from HMRC for not paying taxes on time or in full, getting a bad reputation with supplier for paying late, or, in the worst-case scenario, running out of money altogether—and running your business into the ground.
If you know little or nothing about accounting, all is not lost. There’s never been an easier time to learn. Here are three steps to put you on the right path.
Take a course. Even if you use an outside accountant or have a bookkeeper in your business, as the business owner, you need to understand basic accounting principles yourself. Check out local colleges, adult education courses, or the Business Link website for help learning the basics of small business accounting. Better still speak to an accountant for help understanding your options and how best to continue.
Make it automatic.There are many good accounting software programs available to simplify and streamline the accounting process. What’s more, they make it easy to view the numbers in different ways so you can keep track of key information like your sales, expenses and cash flow at a glance. Work with your accountant to choose the right accounting software package for your business. With so many cloud accounting packages available now, it doesn’t need to cost a fortune and the cost is spread out over the year. Most also have a free trial period, so you can try a few to find the one which is right for your business.
Keep it up. Like an exercise program or a garden, your accounting system needs to be kept up-to-date regularly or you’ll soon find yourself in trouble. Set regular times to input and update data each week, and it will stay manageable. Delay or put off doing so, you’ll end up playing catch-up and potentially making some costly mistakes.
With online accounting you can even break it down into smaller bites and just add your expenses to the system in 5 or 10 minutes each day. Sage One is a great example of simple to use online accounting software that doesn’t need accounting knowledge for you to be able to use, and it has loads of great training videos to get you up to speed quickly.
If accounting isn’t your strong point, don’t feel bad, plenty of start-up business owners are weak in this area. Do something about it by contacting an accountant who can help you get a grip on your small business bookkeeping, and help your business grow.