Let’s face it, anything to do with money can get pretty complicated. And when you’ve got a whole business’ funds on your hands, you’ve got be very careful what you do with them. That added layer of necessary security, and the idea that an entire company you built from the ground up could go bust as a result of a poor financial decision, makes accounting one of the hardest things to do in business.
But the idea of balancing your own books, and somehow managing to do so correctly when you have zero experience in the accounting world, shouldn’t be as daunting as it’s often made out to be. So in the interest of changing that perception, here’s just a couple of pointers to keep in mind.
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How Do You Balance a Book?
Balancing the books in your business is a lot different to balancing your personal accounts, and there can often be a lot more at stake too. You’ve got to get familiar with all kinds of new terms as well: things like receivables, cash flow, all the different types of expenses you can incur etc. More often than not, a business owner will hire in a professional to balance the books for them, but more on that later. For now, let’s focus on how you can try it out for yourself.
Most of all, you want to know your books are going to add up, and that means you need your customers to pay. Every time you sell something to a customer, you prepare an invoice for them to pay. Now, usually customers will pay before their goods or services are delivered, and you can call it a day then and there. But sometimes invoices won’t be paid in full straight away, and when they’re not, you log a receivable, which tells your books that you’re owed some money.
You can come back to this log book as often as you like to check whether you’ve been paid yet or not; in truth, you should check your receivables a couple times per business day. Once you’ve been paid, you can mark the receivable off – it’s actually quite an easy process to go through, as long as you log these invoices as soon as they’re issued!
So, Feel Free to Outsource
If you can’t get an in house accountant, either because you can’t afford one or you can’t find one, don’t let yourself stew in uncertainty. Go a little more freelance, or use an outsourcing service like the one mentioned above.
Outsourcing your accounting is a lot easier to manage than you think as well, especially when there’s business process management companies out there for you to rely on. These professionals aren’t permanent positions on the books, so you’re only going to be forking out for them once or twice per year. Wouldn’t that be easier to manage?
Accounting needs to be something more and more people can start to approach with a clear head and some confidence!