One thing I’ve noticed as I’ve been talking with the owners of growing businesses, is their need to get their money figured out. Now, I’m not talking about the “making money” part, but figuring out the “what’s coming in and what’s going out” part.
If you haven’t already read my first blog in this series, “Growing Pains – Struggling to Keep Up With the Financial Side of Things?” I would suggest you go back and start there. Otherwise, I’m going to assume you’ve taken my advice and have started using an automated bookkeeping system, like my favorite: Quickbooks.
Once you’ve gotten yourself setup on a system, the next step is working on that money part. First off, are you mixing work and personal? Maybe you’ve never heard this before. But one big step, in order for you to grow a solid business structure, will be to keep your business transactions in a separate account. Try as best as you can to not use it for personal income or expenses. If you have to once in awhile, it’s not a big deal. But try getting in the habit of keeping them separated.
The next step after separating business and personal, will be to sync your business bank account and your business credit card account with the bookkeeping system you are using. This is where I have seen many businesses fall short. They haven’t realized the value of doing this. So I’m going to enlighten you a bit, so you can be armed with information.
When you sync your accounts with your bookkeeping system, every transaction that goes through your accounts are fed into the system. These are called bank feeds.
Have you ever had an automatic payment drawn out of your bank account but forgot it was going to happen? Maybe you didn’t even notice it ever! Or maybe it was months before it caught your attention. Well, when you have all your transactions feeding into your bookkeeping system, you will have these right at your attention, as long as you’re logging onto your system!
This makes it less likely that things will go unnoticed with your business money. This is a huge advantage, because as business owners, we need to be aware of these details if we want to build a solid business.
Another big advantage to having the bank accounts feeding into your bookkeeping system, is the ease of performing reconciliations on your bank accounts. You may have never done a reconciliation in your life, or maybe it was a long time ago and with a calculator. Trust me when I tell you that reconciliations on a bookkeeping system, like Quickbooks, is one of the easiest methods there is.
Why reconcile? Even though you will be catching many mistakes by having your bank feeds, there will be different kinds of mistakes that will be caught when you check your bank statement against what you have entered into your bookkeeping system (reconciling). It’s like having quality control for yourself. That’s invaluable!
Just these small changes in your money tracking will yield huge benefits for you, and likely, huge savings as well. Having a system and some tracking will set your business on a solid foundation that will be able to expand and grow as your business does.
If you would like more information or advice, send me a message or schedule a free consultation.