You know that spring you get in your step when you’ve just finished off your business’s financial checklist? Profound relief washes over you; the knots ease from your shoulders. Well, let’s be honest -- it can often get well into the holiday season before that feeling arrives.
You may feel you have plenty of time, but if you don’t start checking those tasks off now, you’ll be drowning in a black hole of to-dos by the time Hanukkah rolls around. That’s why spending a little time now -- in the summer months -- to update your books and check the financial health of your business could save you trouble down the line and give you far better insight into how your business is doing on a daily basis.
While it’s easy to put off looking at that stack of documents and those Excel spreadsheets, businesses are often busiest as the last quarter rolls around, and by procrastinating, you risk ruining your holiday season with the undue stress that results from missing funds or disordered invoices.
If you run a small business or are a solopreneur, it can be even harder to get a proactive grip on your finances. When you’re wearing many hats at once -- from marketing to technology -- you don’t always ask for the help you need. At my accounting consulting firm SUM Innovation, we’ve had clients come to us after their new CPA told them to sort their accounts out. One company had been procrastinating so long that it had failed to file taxes for seven years!
Unfortunately, once you get that fateful letter from the IRS, it’s too late to learn your lesson. At best, failing to file your taxes will result in an audit. At worst, orange could become your new black.
Save yourself the hassle, and do a little light summer accounting instead. Here are three tips that will help you get ahead of the holiday season so you can get that spring in your step before the groundhog even emerges from his burrow.
1. Annotate receipts.
Note taking isn’t just a habit of successful students; it’s also a habit of successful business owners. (Studies show that writing notes will improve memory and retention.) If you leave your notes until the end of the year, however, you’ll forget what that working lunch was for or whether that train ride was for business or pleasure. Get into the habit of scribbling a quick “had a business lunch with Karen Smith” or “took a cab to the bank” on your receipts.
American Express’ ReceiptMatch app allows you to snap a picture of your receipts and upload them to your online statements. The app also has a note-taking feature, meaning you can type up a few keywords that will jog your memory at the end of the year. If you don’t use American Express, Expensify and Hubdoc offer similar capabilities.
2. Don’t go it alone.
You started your business because you wanted to see your passions come to fruition. Unfortunately, making sure your finances are in order comes with the territory. And although doing your accounts can be a lonely business, it doesn’t have to be.
If you’re finding that you haven’t got time to prioritize accounting, contact an outside firm to help you. You don’t have to hand over your whole organization, but at least hire an accounting consultant to help accelerate your growth strategy and provide tremendous value.
Related: How to Hire an Accountant
3. Treat yo’ self.
Doing your accounts can be painful, especially if you’ve been putting them off and your “books” are really just a collection of sticky, crumpled receipts of unclear origin. However, if you confront your accounts this summer, you’ll find your stocking full of gold come Christmas morning.
Turn yourself into Pavlov’s dog by associating keeping up with your finances with something lovely. You could try pairing half an hour of accounting with an episode of "Game of Thrones” or a planning session for your holiday party (the one that you can afford now that you have your finances in order).
By the time the holiday season rolls around, you’ll be so on top of your business that you’ll actually be able to enjoy a glass of eggnog without those pesky numbers running through your head. Just get into the habit of taking notes, asking for help if you need it and treating yourself to something nice with every accounting session.
This article was co-authored by SUM Innovation CFO Darin Webb.