Top 5 Accounting Challenges For Small Business Owners
1. Managing cash flow
No business wants to feel hopeless while watching their debts pile up so managing your cash flow is important. Cash flows show how well your business is doing in terms of paying off what you owe and the profits you’re able to make. This is usually because businesses are unable to track their expenses effectively and efficiently. Often, when businesses hear the term cash flow, it is associated with profits. However, it is equally important to look at your cash flows when you’re experiencing a loss to get a realistic view of your business.
2. It's also the smaller things in life
Even down to the smallest transactions, all money coming in or out needs to be recorded. This can get tricky if your business offers different ways of payment because transactions are not being processed through one stream which makes it hard to track. Our advice to you is: to avoid any issues later on preparing your financial statements, start now! Think about it like starting an assignment the night before the due date. Cramming has never been great - not during assignments and certainly not now. So save yourself the stress later on and track the smallest transactions.
3. It’s just numbers
When dealing with finances, you would think it's just numbers, as long as I can see that the numbers are leading to profitability, I should be fine, wrong. For small businesses, accounting can initially be pretty basic and easy to understand but you may find yourself stagnant if you are not interpreting these numbers adequately. When it comes to numbers, accountants play a nurturing role for your business as they can crunch down the numbers and see how you can maintain your growth. If you are struggling to generate profits, accountants can look into your financial reports and help you create a better budgeting plan.
4. Not hiring a business accountant
Take a step back and see the bigger picture, accountants not only play a significant role in improving your business’ financial performance but your business as a whole. The role of an accountant can often be undermined but they’re more useful than you think. Businesses are constantly trying to achieve profitability, and a large part of that is understanding your finances. We are not telling you to be a financial expert, there’s already so much on your plate running a small business. But we’re suggesting you do not do it on your own - seek professional help.
If you are a business owner based in Sydney and are looking for a local small business accountant, M.A.S Partners can help you. We are dedicated to making your life easier so an investment in us is an investment in your business. To speak with our team of small business accountants in Sydney about the services we offer and what we can do for you, call us on (02) 9211 5000 or visit our website at https://www.masaccountants.com.au/