When you’re starting a new business and trying to turn your dreams into a reality, it can be surprising to learn just how much paperwork is involved. In addition to actually running your business, managing the books can almost become a full-time job in itself. There’s money coming in, expenses that need to be paid, taxes to be considered and inventory to be managed. While many new business owners turn to Excel or similar to manage their money, here’s five reasons why this is not the best way to go.
1 Position your business for growth
If you’re developing a side hustle or simply in the first year of a small business, sometimes it can be hard to see past the day-to-day operations. However, if you want to build your endeavour into a profitable business, it’s worthwhile getting your paperwork sorted now. Get ready for when your business grows significantly by having the tools in place to manage your money. Once your business is well and truly turning a healthy profit, excel or pen and paper just won’t cut it anymore.
2 Manage your cash flow
One of the most important things to do when starting a small business is keep an eye on your cash flow. It’s too easy for businesses to overextend themselves and wind up in trouble. Often this can simply be a result of not clearly understanding how much money you do or don’t have. This is why it’s important to have accounting software, like QuickBooks, that clearly shows you how much money is coming in and how much is going out at all times. This will help you avoid cash flow issues in the long run.
3 Be prepared for tax time
There is nothing worse than having the new financial year roll around and realising your paperwork is a mess. You have to spend hours going through mounds of paperwork or consolidating spreadsheets and working with your accountant to make sense of it ll. Imagine if you could look forward to tax time because all your money is sorted. Software like QuickBooks can help you make sense of your tax, GST and BAS obligations.
4 Save time
Manual methods of money management can be a serious waste of your time. One of the biggest pain points of new business owners is the countless tasks on their to do list and the limited time there is in a day. Don’t waste your precious time fiddling around with spreadsheets and paper, but consolidate your paperwork into the cloud. Not only will tasks like emailing invoices and reporting be much faster and more efficient but you can easily collaborate with your bookkeeper or accountant.
5 Minimise errors
The more manual the method, the more easily you can make mistakes. Remove the margin of error by moving away from pen and paper or spreadsheets. Embrace technology and let it do the math for you. This will help ensure things aren’t missed such as due payments or deadlines. You can also store receipts on the cloud instead of in a shoebox, so no important paperwork goes missing.
If you’re looking to grow your small business and manage your money well, consider moving to cloud accounting software, like QuickBooks.