How to Avoid These Top 5 Accounting Obstacles

Staying on top of your finances as a small business owner is no small feat, but it’s essential to running a successful operation. There are many accounting obstacles that most businesses face, but these are the five biggies, and what you can do to avoid them. 

1. More than 80 percent of business fail because of cash flow issues. Managing cash flow is such a big deal for small businesses. In fact, a recent study shows that cash flow issues lead to the demise of 82% of businesses. Why? It’s often difficult for business owners to earmark enough money to cover recurring costs that are essential to the business. You can avoid cash flow problems by combing through your bills carefully, and staying on top of payments from customers (a perfect segue to number 2…).
2. Accurate accounts receivable/collections are essential to small businesses. Your cash flow and accounts receivable/collections go hand in hand. That’s because your accounts receivable is critical to calculating how profitable you are and how much cash you have coming in. It’s obvious that you need money coming in from customer payments in order to have money going out to pay for business expenses. You need to create a solid invoicing processes that involves timely, regular communication with customers.
3. Processing payroll is a big challenge for many small businesses. When it comes to tax codes, tax filing, and proper accounting practices, it’s no wonder the payroll process can be overwhelming to business owners. Most businesses are inconsistent in their approach to managing payroll; incorrectly file tax information; or are using the wrong accounting software. A simple solution is to partner with an accountant with comprehensive payroll and accounting services who can help find what works best for your business.    
4. Managing paperwork can be an accounting nightmare for many business owners. From reconciling your books and keeping up with expenses to filing all the proper tax forms and creating a budget, a mountain of paperwork piles up quickly for any small business owner. A good way to alleviate any obstacles before it overwhelms you is to sit down with an accounting professional to determine a plan that works best for your operations. Perhaps it’s finding the right payroll software or filing the tax documents specific to your business—an expert resource is invaluable.
5. Reconciling the books each month. Closing out the books on a monthly basis can be time-consuming and frustrating. It’s easy to make mistakes that can lead to inaccurate calculations or even IRS audits. A good way to stay on top of this task is with the right accounting system, and getting into the habit of monitoring transactions often—even daily if you can so that monthly task gets easier.

 
Turn your accounting challenges into solutions—contact us ASAP.
You have enough to worry about when it comes to running your busines successfully—get peace-of-mind accounting services from Sidekick. In fact, small business owners throughout Wisconsin and nationwide count on us to promote their financial health through results-driven accounting solutions. Discover what we can do for you—call 414-310-7689 or email us.

Photo Credit: Photo by Ann H from Pexels