Used with permission from office.microsoft.com
This is part of a series of the Top 10 Bookkeeping Mistakes Small Businesses make. To read the others, click here.
Leaving bookkeeping to the last minute
Everyone suffers from procrastination from time to time.
Actually, to tell the truth, we only suffer when we finally tackle whatever we’ve been avoiding: it’s easy and natural to do the avoiding!
Sometimes procrastination can be good. When we finally get to deadline time and discover that avoidance is no longer an option, it pushes us to excel, to fight off further distractions, and to achieve more than we realized we could.
When it comes to bookkeeping, though, leaving things to the last minute is the worst possible mistake we can make, and that’s because it can result in:
- Added stress
- Penalties for late filing
- Mistakes with deep financial ramifications
- Loss of control over the business
- Cash flow difficulties
- Bad business decisions (and possibly business failure)
This is serious stuff. It’s not as though putting off your bookkeeping until the last minute might lose you a few dollars in tax refunds – it could, in a worst-case scenario, lose you the business altogether!
“Oh, that’s a bit drastic,” we can hear you say. “I have a small business, and I pretty much know what’s happening in it. Sometimes things get behind, but it’s not that big of a deal.”
Please listen to us. We’ve seen this happen in too many businesses for it to be a laughing matter. You may think you’ve got a rough idea of your cash flow in your head, but it’s remarkable how quickly that gets confused. Think about how it goes with a credit card – you buy “a few things” here and there, and suddenly you’re shocked to discover several hundred (or thousand) dollars weighing down your monthly statement.
How you can stay on top of your bookkeeping
Staying on top of your bookkeeping could literally save your business’s life. We’d recommend thinking about doing some of these things:
- Talk to us, or to your accountant, about delegating a few bookkeeping tasks. Your accountant doesn’t have to do everything, but even one or two small items could relieve you in a big way.
- Attend a time management seminar, or event, or online webinar. Pick up a few tips for getting organized, and (more importantly) follow them!
- When you receive a bill, or an invoice, enter it into your accounts and file it immediately. A minute on this end can save you twenty or thirty minutes six months later when you can’t remember what it was for.
- Set aside time to file things every week. Pick the same time, if you can – Monday mornings, or Friday afternoons, or even Saturdays. Make it a hard and fast rule in your calendar, and pretty soon it will be a (good) habit.
- Once or twice a year, go through all your paperwork and get rid of things you don’t need. (Check with us about what paperwork you can throw away and when, and what paperwork you should keep for years.)
- Use an online accounting system like Accounting CS, Quickbooks, Xero, or Freeagent. For a small monthly fee you can access your system from anywhere, anytime, and not be stuck in a back corner of your office.
Boring is better
Finally, remember that ‘boring’ is better than ‘disaster’. (We just made that phrase up today, but it’s true.) It’s better to do a few boring items once a week than to have hundreds of items you’ve put off for years stare you in the face. If we can help with a few items, request a quote online, or call us at the office.
For Bookkeeping Mistake #3, read on.