Last Update: June 4, 2016
Generally, when you mention accounting to first-time entrepreneurs a glazed look of trepidation covers their faces. And even if by chance, you have been exposed to accounting at some point, you quickly realized it wasn’t as glamorous as you might have hoped.
So how do most entrepreneurs start the beleaguering task of developing a strong money systems. For some it starts with a shoebox, folder system, or pocket lint cash account. The hard truth is that none of these systems will help business owners address pertinent issues that will arise as a company grows over time. It’s really important to get a solid handle on business finances early on.
Accounting is important because:
strong financial records are key if you ever decide to pitch to VC’s for funding
financing from financial institutions, such as credit unions or banks, will require historical performance data
to run lean and mean and get a better handle on expenses, knowing where your money goes is important
if you decide to sell your business or merge with another company – financial records are important for valuation purposes
keeping a close eye on business performance will help you grow a sustainable business
cash is king and daily operations will require a strong cash basis to keep you moving forward
Many small businesses fail due to poor management of financial activities. And of those small businesses, a good portion fail due to poor books and records. But all is not lost. The great news is this – these are all areas that are within your ability to control, fix and improve upon.
If you have even an average competency with numbers there are effective online accounting tools that can prove extremely useful. However, as your business grows, outsourcing your accounting needs can help you better assess financial performance and increase profitability. Finding a good bookkeeper or accountant is essential.
Finding accounting utopia
The best accounting software offers real-time charts and dashboard snapshots of your current financial position. I’ve also learned that having a keen view of your accounts payables and receivables and being able to forecast revenue trends with historic data is a must-have. While it seems far-fetched and very expensive, cloud-based accounting solutions can cover off on these basics.
For example, Xero lets you instantly see your bank balances, invoices, bills and expense claims – and add new transactions with a click. You can also view your cashflow in real-time and monitor specific accounts when you need to. Best of all, Xero offers a free 30-day trial, with unlimited users, no credit card required.
Meanwhile, inDinero also provides the financial tools and data to understand, run, and grow your small business. They assert, “accounting software should help you know where your money is going, what your margins are, and how your departments are performing. What it shouldn’t do: require you to babysit it,” and I couldn’t agree more.
If you need an accounting and tax software + service that handles it all for you, complete with a powerful dashboard then inDinero is a suitable option.
Cash flow is king and the right accounting tools will offer you a strategic and cost-effective advantage.
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