When you are running a small business you often find yourself wearing many hats. Sure – it would be great if you could hire a CFO right out of the gate but most of the time that just isn’t possible. This means that along with being President, you’re also the CFO…the problem is that if you’re not ready to be CFO you could lose track of your spending – and quickly!
There is no way you can determine whether your business is successful or not unless you are actively tracking your income and expenses. The best place to start is Excel and a simple spreadsheet will do the trick when you’re getting started. To keep it simple make two columns, one for income, and one for expenses.
Every month balance your books and make sure your income is exceeding your expenses. Make sure to categorize your expenses as well so you can keep track of which areas you are spending the most money. If you can set monthly goals – this gives you something to shoot for and oftentimes provides that extra little bit of motivation you need to grow your business even more.
Okay – so Excel is okay when you’re starting-out, but what happens as your business grows? That Excel spreadsheet is fine when you have just a few income sources and expenses, but as the list grows your spreadsheet will become even more difficult to manage. I hit this point at the beginning of this year and I knew that it was time to take my finance department (which of course is run by me) to the next level.
After reviewing a number of solutions I decided to go with Quickbooks Online. Quickbooks makes it easy to input your income and expenses and it can generate beautiful reports that you can use to better understand your business. Since it’s an online system you can login from anywhere so when I’m traveling I can continue to keep my books up-to-date. Quickbooks will also make your accountant’s life easier as there is a special login they can use to access your finances and prepare your taxes.
So if your business is growing but your finance department isn’t maybe it’s time to look-into a solution like Quickbooks. Not only will it simplify your life (and your accountant’s) but the reports it generates can help you learn even more about your business and how you’re spending your money.
No affiliate links here – just go to QuickBooks.com if you’d like to sign-up!