How to Make Bookkeeping Painless
When was the last time you jumped for joy at the thought of preparing your financials? Do you shiver at the thought of where your money is going or how profitable your business really is? At Lucid Books, we strive to bring the joy back into your life and remove the shivers when it comes to managing your books and preparing financial information for operational use. To help make bookkeeping painless, here are three things you can do to help ease the pain: Use Your Accountant, Use Awesome Software, and Be Inquisitive.
Use your Accountant
Bookkeeping can be painful or burdensome even if you know about finances. Accountants can provide a variety of services (especially bookkeeping) which allows you, the business owner, to operate and shift your priority to maximizing revenues and profits. A strong accountant will not only be able to reconcile bank transactions, create invoices, and pay the bills, but will also offer financial analysis, recommendations for cost cutting, and ideas for improving processes.
Your time will be freed up. This further enables you to better understand the financial status of your business. If you do decide to manage the bookkeeping, an accountant can provide periodic guidance and consulting to ensure you are on the right track.
Use Awesome Software
I can remember the first budget that I created—it was on a piece of printer paper and I used it to help our family’s finances stay in check. Nowadays, spreadsheets and accounting software are available to help businesses and individuals manage their finances. When selecting accounting software, do your due diligence. Business owners will want accounting software that is readily available and easy to use. In addition, the accounting software should provide tools and reports to help owners understand how cash is flowing, among other things. Accounting software that allows you to do the least amount of work will help you to focus on the priorities mentioned earlier. Your accountant may already use a accounting software. If so, make sure it fits your needs. If you will be managing your system on your own, ask your accountant who should be able to make some recommendations.
Your accountant and software will help ease most of the pain; however, the residual pain will need to be eased through questions. I can’t stress it enough. Ask questions to your accountant. Squeeze that powerful financial insight out of him! Inquire about why your income statement is showing a net loss. Ask about the liability accounts on your balance sheet. Questions will help stimulate conversation and garner understanding for you. As your accountant responds to your questions, ask more questions. My mom always told me that knowledge is power. The worst thing someone can tell you is no. Ask the questions and prepare to be taught.
Bookkeeping does not need to be painful–it can be fun! Find yourself a trustworthy accountant, and select an accounting software. Once your business is up and running on the software, start asking questions. When you combine the knowledge of an accountant, the many offerings of an accounting system and the information provided through questions this will make bookkeeping painless.