Recently, Acuity’s managing partner, Matthew May, was asked to speak on DIY business accounting best practices at Digital Ignition, a North Atlanta tech coworking launching pad. (You really have to see the space age decor to appreciate the “launching pad” reference.) The one-hour session aimed to empower entrepreneurs looking to take control of their books to get moving in the right direction.
In case you missed out on the event, we’re summing up the top seven takeaways and lessons learned from DIY Accounting with Matthew May:
1. Change your business accounting habits.
Did you know that how frequently you do your accounting can affect your company’s survival rate? In fact, changing your habit of doing bookkeeping annually to monthly increases your business’ survival rate from 36% to 80%.
2. Invest in the right tools.
The right tools are essential for DIY business accounting. At Acuity, we are currently recommending QuickBooks Online and Xero because they make great data repositories. Debating which version of either platform is best for your business? Check out which version of Xero or QuickBooks Online will best serve your needs.
3. Integrate your approach.
Your system selection focus should be based on your acute business needs. We recommend looking for a point solution that eases your pain and then connect it to one of the repositories (like QBO or Xero). This sort of integrative approach can multiple the effectiveness of your efforts. For example, a consulting firm might prioritize billing and use Freshbooks to take care of invoicing, but connecting that point solution to QBO or Xero could make their efforts go from static to scalable.
Over 70% of small businesses are outsourcing at least some part of their accounting function, yet the average entrepreneur is spending 80 hours a year on back office accounting. Ouch. As an entrepreneur, you’re busy building an empire and don’t have time to be a bookkeeper and follow every dollar.
5. Opt for less data entry.
As you’re probably well aware, reconciling can be a slow and painstaking process. Eliminate your data entry pain points by taking advantage of bank and credit card integrations on platforms like Xero or QuickBooks Online. Connecting this information will help you get a better idea of where you stand on a daily basis rather than simply waiting for month end or tax season.
Do you have a six page income statement? May we offer some sound advice? Keep things simple. Start with your compliance requirements and only add complexity if the complexity will help you make a better business decision. Opt for a more streamlined approach by going back to the basics.
7. Look for the bigger picture.
One of the biggest mistakes entrepreneurs make is failing to look at the big picture of their finances. That’s why one of our favorite reports is a trended income statement. Rather than looking at one month of financial data, why not look at a series of months side by side? This can bring your business’ financial story to life and support smarter business decisions.
Here at Acuity, we offer entrepreneurs and startups the resources and support they need to keep their financial engines running smoothly at every stage of growth. You certainly could go at it alone – but it’s hard to grow an empire without delegation and honest support. Let us partner with you to set up your business for financial success.