It’s a fresh new year and you are ready to take your business to the next level. Last year was great, but now it’s game time and you want your bank account to reflect all the sweat, blood and tears you’ve put into your business.
If you’re serious about growing your business, it’s time to turn pro and become financially savvy. And that means tracking the cash you make and the cash you spend.
How you approach this area of your business will determine your success. Not just your financial success, but success in terms of peace of mind and ability to enjoy all that life has to offer outside of running a successful business.
If you want to be cash flow positive for the long haul, you have to use a system that will help you manage incoming and outgoing cash so your business can grow and you can pay yourself a consistent salary. Wouldn’t it be nice to wake up every day and know you have enough money to pay the office rent every month?
Being Financially Savvy
One question I often get from early-stage small business owners is whether or not they need to use a bookkeeping or accounting software. Usually when we first start a business, funds are tight and we can’t afford to hire an accountant. But should you wait until you can hire a financial professional before you start using an bookkeeping program? No.
My rule of thumb is: “The moment you spend your first dollar on your business, you need to start tracking your cash.” And that means using a bookkeeping program. Too many business owners go out of business not because they didn’t make enough sales, but because they ran out of cash.
And don’t be scared of using a bookkeeping program because you don’t have an accounting background. If you know how to count money, then you can learn how to use one.
One of the easiest and most user-friendly bookkeeping programs for creative entrepreneurs is Xero. Their cloud-based accounting software will help you manage invoicing, bank reconciliation, bookkeeping and more. It even has an app for your smartphone and a 30-day free trial.
Bookkeeping With Benefits
In addition to tracking your cash, here are three more reasons to start using a bookkeeping software today.
Do you need financing?
If you are hoping to get a business loan or funding from an investor, they will want to see accurate financial reports. A bookkeeping program allows you to run these reports quickly and demonstrates that you are serious about your business.
Do you want to make tax filing easy?
At some point, you’ll want to hire a tax professional and he or she will need all of your financial information to be in one place. The more difficult it is to gather the data from different sources like Excel, credit card and bank statements, Etsy and PayPal accounts, the more time it will take. And that means it will cost you more money.
Do you want to manage payroll with ease?
More importantly, do you want to be able to pay yourself a consistent salary and reinvest in the company? An accounting program keeps all of your information in one place so you can figure out the best ways to grow your business without overspending.
And now I want to hear from you. Do you use bookkeeping software for your business? If so, which one works the best for you?
This article has been edited and condensed.
Danetha Doe is a financial growth consultant for businesses specializing in fashion, beauty, and natural hair products. She works with clients to improve their cash flow and profit margins, so they can expand and achieve financial success. She is co-president of the Future of Accounting, a professional community of more than 300 accountants and software developers in San Francisco. An accomplished speaker and writer, she has been featured on Huffington Post Live with Suze Orman, Accounting Today and other media for her business accomplishments and expertise in cloud accounting. Connect with http://www.twitter.com/danethadoe on Twitter.
© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.