Record keeping is a necessary evil of small business ownership. But there is a world of difference between having a recordkeeping system and having a good record keeping system. So many things hang on your ability to keep quality financial records — tax reporting, budget forecasting, your ability to acquire capital — that it just doesn't make sense to neglect this important task.
Here are some tips to help you establish and maintain a recordkeeping system that would make any small business owner proud: Don't be a hero — get help when you need it
Many small business owners can't bring themselves to hire someone to handle their company's recordkeeping needs. Instead, they try to handle the recordkeeping themselves, and hire staff to sell and market their products.
What these business owners don't realize, however, is that they are doing their business a tremendous disservice. No, good recordkeeping won't bring in any additional money in the form of sales. But it will certainly eliminate unnecessary expenditures such as overpaying taxes and financial inefficiencies.
And think about this: Every hour you spend muddling your way through recordkeeping is an hour you can't spend doing what you do best — leading your company. Use technology to your advantage
The days of keeping records with a shoebox full of receipts, a bulky handwritten ledger, and an adding machine are over (thank God!). Today, the task of small-business recordkeeping is largely a computerized endeavor.
You have a multitude of affordable, yet reliable accounting software options at your disposal. Different programs are designed to meet different needs, so you are going to have to do some research. You will also need to decide what you will expect from your software. If you just need a program to keep records for tax purposes, then your software doesn't need to be as complicated (or as expensive) as it would need to be if you want to use it to track inventory as well.
A word of caution: Take into account the future needs of your business and whether your software is capable of growing with your company. Changing accounting programs midstream is a hassle that can be avoided. Orchestrate, integrate and coordinate
The best recordkeeping systems are ones that are thoroughly integrated with the existing systems of the business. Even if you aren't going to be the one who will do the actually recordkeeping, you are going to have to be the ringleader who initially makes sure the recordkeeping system is a good fit with the tax reporting, IT and procedural systems you already have in place.
A good place to start this potentially intimidating task is by calling a meeting with your key leaders, IT coordinator and tax advisor to assess your recordkeeping needs. Most people understand what they need a recordkeeping system to do, but overlook the needs of other departments within the company. By assessing your needs together, you increase the odds that your recordkeeping system will be a quality one.