Small business people don’t get into business because they are accountants or bookkeepers, but they quickly realise they have to keep on top of their accounts if they are going to be successful, or even survive.
You might be the best plumber, graphic designer, or electrical contractor in your market, but that counts for nothing if you can’t get the financial part of your business under control.
Heard the one about the business that grew at a rapid pace but couldn’t handle its cash flow and ultimately failed? It happens all the time.
How about the one about the business owner who was too busy actually working and delivering services to his customers to do his quarterly BAS statements?
They piled up, quarter after quarter, as he retreated further and further into denial. He ended up having no real idea of how his business was performing, as well as a big – and totally unnecessary – compliance issue with the taxman as well as a mounting bill.
In these situations the hard work and energy of the small business owner can be squandered because of their inability to tackle the financial management side of working for themselves.
Everything has a price, and, for small business people, one of the big ones is financial responsibility and the time they have to invest in what is not their core skillset.
In the past, the image of a small business person managing their finances has been at the kitchen table at home, strewn with piles of bank statements and receipts as they try and make sense of it all.
For many small business owners, this is a nightmare image which comes true all too often.
Fortunately, it doesn’t have to be like that any more.
Today, there are solutions out there and it doesn’t mean bothering your accountant with a barrage of emails and phone calls.
The distinction between having a hobby and having a business can be a narrow one so it pays to talk to your local H&R Block tax consultant to advise on your specific circumstances.
Help is at hand
Just about every small business has been impacted by the rapidly developing online world.
It has created the new landscape of e-commerce and levelled the playing field with bigger companies in terms of distribution, as well as giving small businesses a new way of scaling up their marketing through their websites and now social media.
The advent of cloud computing, where data and software are accessed from solutions providers online, has also given smaller businesses access to sophisticated software once available only to the largest corporates.
Under the software as a service model, businesses pay modest monthly subscriptions for what they use, a little like turning a tap on and off as they need to.
In the past, the cost of these software licences was prohibitive but now the same firepower is widely accessible to businesses of all kinds.
Accounting software for all!
One of the big growth areas has been accounting software.
Intuitive and easy to use, it puts powerful tools into the hands of users and gives them what they need to bring their financial management under control.
This doesn’t turn small business owners into accountants, but just enables them to stay on top of what is happening in the business through regular data entry and a bit of vigilance.
Keeping it all in one place on the computer means that when the time comes, files can be sent off to the accountant for processing and lodgement.
This can minimise the accountant’s time, keeping down costs, and make it easier to keep track of records and back them up for safe keeping.
It also has the big benefit of giving the business owner a better idea of the ongoing performance of the business and how it is tracking. This waves goodbye to BAS denial and the kitchen table nightmare.
This improved financial knowledge is not just about keeping a lid on compliance, it can be strategic information which can drive better decision making.
With that peace of mind which comes from being on top of things, there’s more time and more confidence in operating and growing the business at what it does best.