Small Business Accounting: Get Intimate with Your Numbers
Yes, I know. Accounting sucks. It’s complicated, time-consuming and a pain in the ass. Why? Because a lot of the business accounting software on the market was made for accountants–not for business owners.
The result is too bad: Most of us small business owners end up believing that accounting just isn’t for us. “I’ve got to focus on the things I do best: running the show and bringing in new clients.” Well, fine – that makes some sense. But in the 12 years I’ve been an entrepreneur, I’ve learned a lesson so important I couldn’t possibly overstress it: if you don’t understand your essential business numbers, follow them closely and react to them promptly and wisely, you’re either going to lose a painful lot of money, or you’re going to go bankrupt.
Business Accounting is THE Tool for Steering Your Boat
So here’s the bottom line: Even though you might hate accounting, you need to learn how to do it, and spend time with it regularly and religiously. I say all that with one caveat, though–if you don’t find yourself some up-to-date accounting software that you don’t need an accounting degree to use, following this bit of advice is not going to be pleasant, and you’ll probably have a hell of a time sticking to it.
With a small business accounting program that’s user friendly, intuitive, easy to navigate and doesn’t slap you in the face with fancy accounting terminology all the time, you’ll be able to climb inside your business, follow its trends, track its cash flow, spot what’s profitable and what’s not, and know when and where to invest your precious time, attention and other resources.
Why Can’t an Accountant Do It for You?
When we were kids, we didn’t change our own diapers; our parents did that for us. Now we’re grown up and we can handle that little zone of activity on our own. It ought to be the same way with accounting. We should be able to handle it ourselves. At least most of it. It’s the only way to be in control of your essential numbers and stay up to date, day by day – or at least week by week.
Completely aside from the tons of money saved on accounting fees, by doing your own accounting you can see your updated numbers whenever you need them. You don’t have to wait humbly (respectfully quiet!) while The Accountant (!) performs his mysterious, magical rituals and finally hands out the figures.
If you can work the numbers yourself, you can see your cash flow and your current position whenever you want or need to. Do that for a just a little while, and you develop a rapport with your business that’s simply priceless.
Those numbers talk to you.
You can spot and deal with trouble before it gets out of hand – even before it’s fully arrived.
You can see strengths to reinforce and opportunities to seize when they first begin to appear – and maximize their potential.
You’re in control: driving with your eyes wide open and a big, broad view of the road ahead. That’s way, way better than sitting in the back seat with your head down, listening to what your driver/accountant tells you about what’s going on. Or trying to drive on your own, with just a little pin-hole looking forward, and a 6-foot-wide rearview mirror looking at where you’ve been. If fact, that’s worth more than you might easily imagine.
So Why Do We Hate Accounting so Much?
The reason we dislike accounting is usually that we’ve tried to do it using old-school accounting software. Decent software should make a function easy and even enjoyable. Well, maybe accountants find that stuff easy to use, but you don’t hear many small business owners or their crews crowing about what a breeze it is, and how much they like doing their numbers. No way. What you hear a lot more is how confused, frustrated or bored out of their minds they are.
So if you happen to be a trained accountant, cheers! You’re in luck.
If you’re one of the fine, fine tribe of small business owners, startups, freelancers and entrepreneurs, you’ve probably had it pretty rough.
In running businesses over the years, I could have saved a serious lot of money if I had just been doing my accounting myself. I thought I knew better, though–didn’t need to get caught up in all that numbers stuff; it was much cooler and “smarter” to delegate to an accountant, then nod wisely as I examined the results he or she presented (pretending I actually understood what they all meant).
I was wrong.
Now, 12 years after launching my first company, I’ve finally recognized that you can’t just hire yourself an accountant and then lean back and relax. You’ve got to know and understand your own financials. Period.
So make a true blue-chip investment. Track down some accounting software that you can easily understand and use. And then make the time to learn it, use it, and discover how to read all your numbers. They’re pointing the way to big rewards.
Looking for more information on accounting software? Check out our side-by-side comparison of leading platforms in the Top 15 Accounting Software report. You can also browse exclusive Business-Software.com resources on small business accounting and financial management by visiting the accounting research center.