It’s a new year. Everyone is making resolutions for becoming a better person, why not make some resolutions to become a better business. Often, one of the most neglected areas in a business is the accounting and finance function. As you embark on this new year, consider the following Accounting Resolutions.
If you’ve not traditionally set a budget for your business, do it this year. Start simple and project high-level revenue and expenses. Think about your business and your plan for the year. Set financial goals to align with that plan and then review your performance to those goals each month.
If you have not been consistent with the use of your accounting system or you have not traditionally used an accounting system, start this year by getting a good system implemented and commit to using it. Consider other systems that can help to streamline your accounting operations – accounts payable workflows, payroll systems, etc.
Simplify your accounting processes and systems. You don’t need 45 income accounts on your profit & loss statement. You don’t need 5 different bank accounts or 10 credit cards. Simplify. Simplify. Simplify.
If you do nothing else, RECONCILE! Reconcile all bank accounts, credit card accounts, and loan accounts every single month. No exceptions.
Stay on top of your accounting. Keep your accounting caught up. Close your books every month. Don’t let yourself get behind.
USE YOUR INFORMATION
Review your financial statements every month. Use your financials to understand how your business is performing. Make adjustments as needed based on what you find. Your accounting inform
ation is not just to be used at tax time. It’s meant to help guide your business decisions. Use it!
If you don’t have a good understanding of business finances or don’t have qualified staff to do so, seek out help. Get a good CPA (emphasis on GOOD), hire qualified staff, search for outside resources. Most business owners are not equipped with the technical expertise to manage their finances. Don’t set yourself up for failure by trying to go it alone.
A new year is a great time for new beginnings. If your business finances have been a weakness, consider some accounting resolutions this year and watch the impact you can have on your business performance.
Written by: Shauna Huntington