Don't Let Bad Bookkeeping Sink Your New Business

Dawn
Apr 27, 2023
Don't Let Bad Bookkeeping Sink Your New Business

Badly managed books can create a ripple effect throughout your entire organization. It can impact every aspect of your business and create a myriad of problems, ranging from cash flow issues to reduced equipment and space leasing options to HR and payroll complications. Bad bookkeeping can damage a business before it has barely had a chance to get started.

Well-run financial management is about more than just paying bills on time. It is also about promptly sent and collected invoices, as well as thorough expense tracking, careful budgeting, and frequent account reconciling. Quarterly and yearly analysis of the incoming and outgoing money are necessary for providing guidance on any management and spending changes that need to be made before a costly crisis occurs.

Establishing a good financial management system from the very beginning is the best way to safeguard against the possibility of bad books ruining a young business. But if it’s already too late for that, there is never a wrong time to intervene and improve the bookkeeping system to put your business on a better track.

Neglected books can affect important aspects of running your business. They can lead to:

Bad cash flow management

Oversights in the bookkeeping will impact the amount of money you have on hand at any given moment and make it nearly impossible for you to make accurate financial forecasts for your business. If you are not tracking each and every expense, you are likely to overspend on supplies, go outside your budget without realizing, and even be charged for things you were not aware of. Failure to track expenses accurately makes tax preparation a nightmare and may cause you to miss out on some eligible deductions and spend more than you have to. Failure to record billing due dates will result in late payment fees and penalties, as well as soured relationships that reduce your negotiating position with suppliers. Failure to send and follow up on outstanding invoices will reduce your available funds and make your cash flow unpredictable. Failure to stay current on your business loans and leases can impact your credit rating and affect future lending options.

Bad workplace culture

Poorly managed finances can be a sign of larger management issues in the organization. Bad financial management can trickle down to employees, causing delays in their paychecks or creating uncertainty about their job security. Financial troubles also add stress, not only to a business owner, but to other employees whose jobs entail some of the bookkeeping, administrative, and customer service responsibilities, as these workers are often the front line facing frustrated vendors, clients, and investors. Workers are most productive when they feel invested in, and connected to, the place they are working. If the management is dysfunctional, it will affect employee contribution and morale, thus reducing productivity and making it even more difficult to maintain the revenue needed to combat the other financial issues. Poor financial management allows for wasted and unnecessarily high operating costs, making less money available for any extras or luxuries in the office that are appreciated by employees.

Bookkeepers can be a lifeline for a drowning business

Before your business enters a crisis, examine some professional bookkeeping options to get you on a better financial track. Virtual bookkeeping services are widely available and can help small businesses get a handle on the books. Researching the right one that suits your budget and your business’s needs is worth the time and can relieve immense stress of having to fix everything yourself. Automating tools used by you or your bookkeeper can also be a great way to regain control of messy finances. Online accounting software has become a modern alternative to pricey accounting firms, often unaffordable on small business budgets. Cloud-based services that collect payments, issue payments, and run payroll streamline the accounts payable and receivable while making the record-keeping and expense tracking automatic and synced with other platforms in real time for 24/7 access.

Checkeeper handles the check payments

Checkeeper’s online check printing and mailing software is the optimal way to issue payments for those times when a paper check is needed. It integrates with the most widely-used accounting and payroll software used by businesses and can have any check payment printed and out in the mail the same day it is ordered. A secure online check registry means you never need to manually enter payment information for later analysis or reconciling—it is done for you automatically, and a partial or lifetime check history can be downloaded or printed on demand. Checkeeper is also a convenient way to get reliable paychecks to your employees. It can work as a complement to Gusto for payroll or as a stand-alone service for those employees who don’t use direct deposit.

While attention to bookkeeping is vital at all stages of opening and running a business, it is never too late to regain control of the books and improve the financial management. Tech tools are widely available to help you connect to an outsourced bookkeeper and to online bookkeeping products that streamline all the financial responsibilities.