Keeping the books can be our greatest enemy as a business founder. 

Most of us aren’t chartered accountants, we don’t have a background in finance, and we’ve got a whole lot of other things on our plate trying to run our business, like attending to employees and customers.

Sound familiar?

Aside from putting together invoices, I know I don’t have time, energy or the enthusiasm to mess around with monthly accounts. But it must be done. 

Not only for compliance reasons, but you have to know where your business stands financially, regularly and consistently.  

It’s pretty unsurprising to me that one of the biggest worries for business owners is their cash flow and that a large portion of this worry is derived from being unable to meet their own payment obligations due to being owed large sums of money from customers or other entities.

Getting on top of this requires robust accounting processes. 

The dirty little secret is not in who does the books but in first figuring out what numbers you need to see and when - are you reviewing them daily, monthly, quarterly, half yearly or annually? Usually, it will be a mixture of these timeframes, if not all of them.   

Choosing what numbers you need to see helps you paint a bigger picture of your business. It gives you an understanding of how the “cogs of the machine” in your business are working in unison. 

Understanding Your Business Position

To get a handle on the health of your accounting processes, think about some of the following questions:

• Are sales invoices going out on a daily basis or immediately when the work is completed, with correct due dates? 

• Are all supplier invoices entered into your accounting software with the correct payment date? 

• When payroll is run, does it automatically transfer the amounts paid to the general ledger? 

If you are unsure about the answer to some of these questions, there may be room for improvement in some of your accounting processes. These improvements will be rewarded with better business confidence, more streamlined workflows and generally tidier books. Oh, and better processes will, of course, save you more time.  

Having on-hand knowledge of your figures when you need them most is vital for making critical business decisions. This means you need your numbers to be in order and accessible. 

You need to know your cash flow situation, your productivity capabilities, your sales figures, your profit margins and your sales trends so you can prepare for both the busy and down times. These numbers can help you make smart decisions about your opportunities, technology, diversification and business development. 

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