Here you are again, burning the midnight oil to reconcile your bank statements. Are you spending more time crunching numbers than enjoying the fruits of your labour? It might be time to upgrade your business bookkeeping system.
As your business grows, your original accounting scheme won’t make sense anymore. Keeping a general ledger in a spreadsheet is too basic for a growing enterprise. Are you getting in the weeds trying to do your own bookkeeping? You may be able to save time and money by upgrading to a new bookkeeping system.
Do these sound familiar? It’s time to upgrade your bookkeeping
There are some common red flags that signal your business bookkeeping is not up to snuff. Some common themes include: wasted time, wasted money, and lack of compliance. If any of these scenarios sound familiar: you may need to overhaul your bookkeeping system.
You spend more time on bookkeeping than your business
If your DIY bookkeeping system is taking up all your time, who is running your business? Too many business owners waste hours entering transactions and finding accounting errors. This is all time that could be spent winning new business or inventing new marketing ideas.
It’s also important to acknowledge the differences between an accountant vs. bookkeeper. If your in-house accountant is also doing daily bookkeeping, they may be taking time away from vital business processes like payroll.
You’re always behind on your business bookkeeping
You just can’t seem to get ahead in your bookkeeping anymore. Surprise, surprise — bigger businesses have more complex financial records. If catch-up bookkeeping is your only form of bookkeeping — there is a problem. The health of your business will suffer if you can’t get an accurate snapshot of your accounts payable and accounts receivable when you need it.
When you try to do your own books as an expanding organisation, you will nearly always make mistakes. Not only are you dealing with an increased volume in transactions, but your small business tactics may not apply anymore. Larger businesses often need to switch from single-entry bookkeeping to double-entry bookkeeping and make other structural changes to stay current.
You have reached the limits of your current software
Small business software has its limitations, including the number of transactions, staff, and clients you are allowed to track. Your business bookkeeping needs an upgrade if you can’t scale within your current system. Simply put: using small business accounting software when you’re no longer a small business is asking for trouble. Ideally you’ll upgrade to a new system before you hit your official limit and have to scramble to transfer your data.
Your business’s tax seasons are always chaotic
Do you find yourself in chaos each June? Tax season means tracking income tax rates for business, capital gains tax, fringe benefits tax, PAYG withholdings, goods and services taxes, payroll taxes, tax deductions, tax credits, and more. Plus, staying compliant is the only way to avoid certain government penalties.
Despite the complexities, lodging your taxes doesn’t have to be a nightmare. If it is, you are probably not using the right bookkeeping system.
Your cash flow is unpredictable
A good business bookkeeping system helps you strategise. You should be able to estimate peak seasons, low seasons, and estimate overhead costs. Another sign that it’s time to upgrade your bookkeeping is that you can’t forecast your cash flow. While there could always be other things at play as well, inconsistent record keeping makes it more difficult to accurately predict your accounts receivable.
You can never get ahold of your bookkeeper
Your financial records should not be a mystery. Do you struggle to contact your bookkeeper when you have a question about a bank statement or you need a balance sheet? This is a sure sign that you’ve outgrown the person or service that you currently work with. The right bookkeeper will make your records available to you around the clock, not hold accounting software passwords hostage or failing to offer guidance when you need it.
Have you outgrown your business bookkeeping system? Whether you are trying to do it all yourself or you just have a bookkeeper who can’t keep up with your growth, it’s wise to bring in reinforcements. Visory is a business bookkeeping service that can scale with you. Begin with basic bookkeeping needs, then add new experts to your remote team as you need them. Contact us today to see if we can help.