As a brief glance at The Apprentice will often illustrate, if you’re a numpty with your numbers you’ll struggle as an entrepreneur. Every series, heck, nearly every episode Sir Alan Sugar’s left berating someone for getting the numbers wrong.
In many ways it’s a skill that’s undervalued, pitching and presentational savvy often given more credence in today’s image focused world. Establishing some accounting savvy is just as important though and integral to enjoying a long and fruitful career as an entrepreneur.
So, if you’re an aspiring Apprentice candidate eager to avoid the wrath of Sir Alan or an entrepreneur merely looking to get a better grip of your accounts, here’s five tips to help you on your way…
Know your tax facts
First up, it’s important to get up to speed with the various tax return deadlines and to figure how much might be liable to pay, along with when you’ll need to pay it by, as should you be a little lax with your tax, fines can start coming your way.
Tax has tendency to be taxing though, so in many ways this is easier said than done. Thankfully here in the UK the HMRC have recently introduced ‘webinars’ to clarify this sort of thing, so that’s well worth checking out if you’re UK based and a little clueless.
By knowing your tax facts, the deadlines as well as the fines, you’ll be able to structure your accounting better. So try and get to know the facts around tax first.
Establish an accounting routine
All too often the aspiring entrepreneur neglects keeping a keen eye on their accounts, cash flow crises and the like arising out of their accounting apathy.
It’s therefore wise to integrate accounting firmly into part of your daily routine, alongside all the other aspects of running your business like marketing and sales.
By doing this you’ll have a better idea about your financial wellbeing, whilst you might also limit the stress come tax return time.
Put your paperwork in order
Some sort of filing system is vital, especially where paperwork is concerned. Keep all your documents in a disorganised draw or shoebox and you’ll likely end up tearing your hair out, struggling to find that important document when you need it most.
Instead then, establish a filing system, with different sections for all your invoices, bank statements and every facet of your finances. You might then spare yourself some financial grief.
Technology has made things infinitely easier on the financial front, apps and software reducing the complexity that used to be involved in accountancy.
With accounting software you can easily reconcile your outgoings with your bank statements, work out tax and produce clear graph visualisations all in a nice little package. Elsewhere, there’s a multitude of apps, account tracker amongst them, providing a tidy and easy to use online platform where you can manage your finances.
Budget, budget and then budget again
As an entrepreneur, your finances are likely to be erratic by their very nature. That said, there are ways to bring some order into your accounts, budgeting being one of them.
By establishing and keeping to budgets you should be left with a better picture of your finances and thus left a little less prone to periods of cash flow crisis. On that note, it’s also worthwhile embracing tools like cash-flow forecasting, this further helping ensure that you legislate for any potential lean periods.
Hopefully these five tips will help you if you’re struggling a tad. Accounting isn’t easy (largely thanks to HMRC) but it can be made simpler by taking a few of these steps.