Small business owners typically have small teams supporting them. They have to keep track of everything that goes into the day-to-day operations or running the business. Many or even all the hours in an owner’s workday have to go towards the most urgent things that need their attention that day. The average day for owners could be filled with things that needed their attention the previous day that they simply didn’t have time to get to. Despite a demanding to-do list, they need to make time for bigger picture accounting and revenue concerns. Here are a few fundamental considerations about monitoring and maintaining your small business’ financial health.
A good accounting program should make staying organized simple. Business owners need programs that are reliable and offer fairly good features. However, they need to be careful about overpaying for programs that have a lot of components that they do not plan to use.
Keep Hold of the Reins
Whether you use an in-house bookkeeper or you have outsourced accounting activities to a financial services provider, you must have some contingencies in place so that you do not lose control of your ability to access or update financial information. If one person in your business has all of the information about how to use a program or retrieve vital documentation, you will encounter tremendous challenges if that person is suddenly unavailable to help.
At a minimum, you need some familiarity with how to access the information that you need to monitor your finances. Ideally, you should have another team member besides yourself who can find information. Bear in mind that giving someone else the authority to get information from a bookkeeping program or a third-party services provider does not necessarily mean you must also give him or her the authority to draw funds.
Create Quality Controls
Good accounting must be accurate. The way that you enter and store data about your expenditures and accounts receivable should have some safeguards to ensure that data is correct. For example, you may be able to use a software program that identifies discrepancies and generates alerts. Also, having two people review information is a good quality control measure that can also help in deterring internal fraud or theft.
Keeping on course financially takes strong organizational skills as well as careful attention to bookkeeping and meeting ongoing obligations. Small business owners must be very cautious about delegating the right amount of attention to financial management.
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