Small Business Accounting Myths - BUSTED!
Whether you’re starting out in business or you have an established business, accounting can be daunting for a lot of entrepreneurs, and often thrown to the wayside until it needs to be dealt with urgently.
Although we love the internet and all its resources, it can also be a hindrance in the way that anyone and everyone can share their opinion or beliefs about whatever they like, and sometimes it can be hard to decipher the educated opinions from the uneducated ones. As accountants, this can be frustrating to see our clients and other small businesses being misled by information. We want to BUST some of the myths around small business accounting, so you have the correct information from the people who continually update their knowledge and work in the industry on a daily basis.
MYTH: Small Businesses Don’t Need Accounting Software
FACT: A lot of small businesses could certainly get away without having any accounting software, but that doesn’t mean they don’t need it. Small businesses can be deterred from the idea of using accounting software as it’s an added cost of running their business.
However, the information that accounting software can provide you with on a daily basis and the time it saves you from manually handling your accounting & bookkeeping far outweighs the cost of the program itself. In actual fact, the reports and useful information you receive from your accounting program can actually help you make more money, OR save you money in the long run!
Even though it may seem like an expense, to begin with, think of it more like an investment. The great thing about most accounting software nowadays is that it isn’t a ‘one size fits all’ system, you can select from different sized packages to suit your business’s needs and find something that fits within your budget, but still has the capacity to grow with your business. If you need help finding suitable and affordable accounting software for your small business, don’t hesitate to get in contact with us and we discuss your business needs and suggest suitable programs that will work for you.
MYTH: I Don’t Need To Understand Business Accounting, That’s What I Pay My Accountant To Do
FACT: Yes, it’s true, you do pay your accountant to understand accounting and to help you sort your finances & tax. But, it’s still absolutely crucial that you have an understanding of what’s going on as well.
Your accountant isn’t with you every hour of the day when you’re running your business, they can give you advice on how to make improvements, but at the end of the day, you’re the one working in the business, making daily decisions. How can you make decisions if you’re don’t know the financial position of your business, or how your decision could affect your business accounting?
Make an effort to spend time with your accountant, understanding your financials, know how to read reports on your accounting software and learning the tricks to get the best financial result for your business.
MYTH: Accounting Is Only Important at Tax Time
FACT: Perhaps if you’re working for someone else as an employee, you might only need to worry about your personal accounting at tax time. But being a business owner, your accounting is something that needs to be managed on a regular basis. We have discussed the importance of planning your tax ahead of time as a small business here.
If you stay on top of your finances right throughout the year, not only will you save time when tax time rolls around, but you can take advantage of growth opportunities throughout the year when you know the financial position of your business. It’s far better to know your business finances on a regular basis than to fly blind until the end of the financial year. This way you can make adjustments as needed and as we said, take advantage of opportunities when they’re there.
We understand that starting a new business or trying to learn the ropes as a business owner can be daunting, there’s a whole new world of things you need to learn, and throwing finance and accounting on top of it makes it even more overwhelming. It’s important to find an accountant who you can trust and who has the patience to help you learn.
As accountants, we don’t expect you to know everything, actually, we don’t expect you know anything, to begin with! As long as you’re willing to listen and learn, a good accountant should be able to help you learn the ropes to ensure your business is financially successful. If you would like to work with accountants who know small business and give you the time to get to know you and your business, give us a call today (03 6424 4021) and we can chat all things business and finance! Or send us an email now firstname.lastname@example.org.