There are many books or websites which teach entrepreneurs or startup how to do sales and marketing, but seldom have they mentioned the financial management. As a certified accountant, I certainly concern financial matters more than anything else! Without a good financial management, how can you sustain your business?
This doesn’t mean every entrepreneur will have to study accounting or finance in order to run a business, but he/she will need a good sense of money management to be responsible for every dollar and cent. No matter what size is your company, or how proficient you are in accounting, I would highly recommend you keep making your profit and loss account every month, so that you know how well you are doing, or to what areas you will need to pay special attention.
If you are from an accounting background like me, it could be the easiest task to handle from the many plates on the table. But it is also for this same reason that we think we have all the figures in mind, so we do not even bother to put them down into a proper format and just leave it aside until the day comes for the audit or tax filing. Don’t fall into this psychological trap! Without the financial performance sheet in front of you, you will just lose the focus and eagerness to get more sales and control spending. I have had this experience before and I know what it’s like. I spent a lot of time doing many administrative set-up actions like business card design, printing, sales presentation etc., and I just left all the financial matters aside, thinking I could come back to them any time. And because of the many nitty-gritty tasks around me, I totally lost my focus in getting the required sales revenue!
What I could have done is actually outsource those nitty–gritty things for a very minimal cost to another financial accountant, and use my time doing something more valuable, e.g. meeting new clients!
When it comes to accounting software, unless you started off as a sizable company, I would actually suggest starting off by just using the most basic tool—a spreadsheet. Of course, as your business grows, you will need proper accounting software to manage the figures and produce the financial report for review and make the necessary business decisions (though you can continue to choose Excel, I don’t recommend it, as you need extra time to manage the debit and credit). I chose QuickBooks as it helps me get organized. It is designed for small businesses, so it is very user-friendly and affordable.
Leave the numbers to the accounting software and let them make it even bigger!
What financial management challenges that you usually encounter? Tell us more and share!
