Welcome to the Top 10 Tips for Financial Success blog series, where we hit the books to better manage your books!
Whether you’re a small business or a solopreneur, these 10 tips are vital to your bottom line!
A wise woman (read: me) once said, “Don’t put off to tomorrow what’s due today.”
Actually, I’ve said it more than once. More like a gazillion times.
Yes, I know, you have your reasons why you haven’t done your books. Trust me. I’m not new here. I’ve heard them all.
I also know that the problem with getting your books done is that nothing feels like it’s due.
Until it’s an emergency, that is.
A bookkeeping emergency? What’s that?
There are lots of emergencies when it comes to bookkeeping. The most common is when you need to apply for a loan. Many businesses faced this cold, harsh reality while trying to qualify for payroll protection loans during the COVID-19 pandemic.
Here’s how it played out:
To qualify for a payroll protection loan, a business was required to provide financials back to January 2019.
For owners who had been keeping books up-to-date that whole time, providing financials was a matter of running a few reports and submitting them to their lender.
For people who procrastinated? It became an emergency.
I had a shop owner come to me saying “So hey I’m trying to go for this loan but I haven’t been doing my books and I really need you to get everything in order.”
Building books back to January of the year prior takes time. You know the phrase “time is of the essence”? That’s a fancy way of saying “This is a rush.”
Helping the client meant I had to burn the midnight oil to get the books built. It also meant I charged a premium.
Bookkeeping on a rush basis costs you money.
Well, that’s an extreme situation, right? What are other emergencies?
Another example of an emergency would be an IRS audit. When the IRS audits your business, the last thing you want to do is rush and run around getting books in order. You want to have everything prepared so you can get it over with as soon as humanly possible.
Another example might be a divorce, when you need to fill out your financial affidavits, which mean going back anywhere from 12 months to three years of financial history.
You don’t want to be the person saying, “Oh my gosh I need to hire someone to go back and look at the last 12 months of my expenses and my income and we need to get this all together for my divorce.” You want to be the person who can just pull together reports so you can move on as quickly as possible (in all senses of the word).
The Bottom Line
Just like with commingling funds (which you don’t do anymore thanks to this blog post), when you procrastinate bookkeeping, you make it more difficult to keep your financial house in order. You end up scrambling to find a bookkeeper, and pay a premium for their services. In the end up, it costs you more money to operate this way.
Managing the financial side of your business means you are responding instead of reacting.
Let me ask you again: “Do you want your business to grow?” Of course you do!
Then stop procrastinating! Contact Beth Blaney & Associates, and get started with monthly bookkeeping right now!
At Beth Blaney & Associates, our top concern is providing small businesses and solopreneurs freedom from the number-crunching and office work that pulls them from their fields of expertise. We are dedicated to helping and empowering business owners!