Four Little Financial Pitfalls That Cost You Big Money
Little may be a synonym for small, but that is all the more reason the little things matter for your small business.
Because even in small business, no dream is too big and no little thing is too small.
The beloved practice of sending thank you notes may be falling by the wayside, and that’s just sad.
But it is also a metaphor for all the little things you do to set your business apart from the others. Maybe you do send thank you notes. Or it could even be a courtesy lunch or a Christmas card. The point is, little things make a big difference in your small business.
The same is true of your bottom line.
It is so easy to let the little things slip. It’s so challenging to keep track of everything, despite even your best efforts.
That’s why it pays sometimes to pause and reevaluate.
So how do you stay on track and avoid the incredibly common pitfalls of small business accounting?
Pitfall #1: You fall behind
Solution: There’s so much to do and no time to do it. We understand, because it’s something we’ve all experienced in one way or another. But sometimes the time you step aside to put out a fire and while you’re not looking, flames are erupting elsewhere.
Days and months may pass before you take the necessary time to balance the finances, and by then it may be too late. The solution? Take some time each day to assess both expenses and revenues.
Schedule time on a weekly, quarterly and annual basis to review where the business is at. Making it something regular and routine will create a habit that can save your business in the long run.
Pitfall #2: You use the wrong tools
Solution: Or, worse yet, you opt not to use tools at all. Meanwhile, it makes sense. A hammer does not have the same function as a screwdriver.
Yet in small business when time is short and things are expected to happen, short-term decision don’t guarantee long-term stability.
Just take the results of a recent study reported on by Entrepreneur Magazine. The report indicates 14 percent of small businesses not using accounting software fail. How long a business thrives depends on a variety of factors, but building a financial model and using financial software that helps you put that model to work is one of the best investments of both time and money you can make as an entrepreneur.
Pitfall #3: You mix business with pleasure
Solution: It’s easier, but that doesn’t mean it’s good practice for your business. While, in some cases, it’s necessary, business and personal finances should be kept separate at all costs.
Why? Because keeping track of things and doing the math right can be tough sometimes. Don’t make it even more challenging for yourself by doing things like using personal or even combined accounts.
Pitfall #4: You don’t know when to ask for help
Solution: This one is about as easy as it gets, yet it is one of the most commonly overlooked solutions as it pertains to small business accounting. And we get it. It’s tough to ask for help. It means admitting to not being able to do something you thought, perhaps, you could do in addition to everything else.
Therein lies the problem. In addition to everything else often lies the foundation for financial problems for a business. Finance isn’t something that’s easy to fake or just do your best at. It’s the backbone of your business. And it’s an area not everyone excels in to begin with. So you’re not alone.
You are not alone. There are services out there, like what we offer at Cloud Friday, that can help you stay focused on what you do best while we take care of the rest. There are options. Choose one and stick to it so you can do what you do best in managing your business.
Your business may be small, but that doesn’t mean you can’t dream big.
Staying focused on all the little things that make a business run, including finances, can do more than keep your business on track. It can help your business thrive. It can help you thrive.
So please remember: little may be a synonym for small, but that is all the more reason the little things matter for your small business.