Like it or not, accounting (no matter what the size of the business) is a fact of life. Getting your systems sorted early will save you long term problems and short term headaches.
To help keep you out of trouble you can start by avoiding these common pitfalls.
1. Trying to Do Everything Yourself
If you've made it to where you have through self-reliance, the temptation is there to continue to take on a lot of the book keeping workload. That's great (when you're a start-up) - now your independence could be hurting you. We all know time is money, and your choice is probably costing you both.
2. Assuming profits always mean cash flow
Rookie error! While it's tempting to write down each deal as income when it happens doing so can make your business bottom line seem healthier than it really is and paint a distorted picture of its real condition.
3. Failing to specify employees and contractors
Does your business have employees? If so, are they employees of your business, or people and companies you’ve hired on contract? There’s a big difference between an employee and a contractor, a difference that you’ll need to account for.
4. Have back-ups
Yes, we know it's time consuming if you're looking after your own books (see point 1) - but we live in a world of heavy dependence on technology where issues are pretty much an everyday occurrance. Back up your data, be prepared and avoid potential losses.
5. Digitise paper records
How many times have i seen this. You walk to an unused office, storeroom or kitehenette only to find en masse filing cabinets, paper stacks out in the open, or disorganized paper boxes.
I’ve been in business for over 30 years now, and keeping one copy of documents just isn’t an option! Today, if you're not digitising all your old paper records then start now.