Common Problems that Business Owners Face
Every department in a small firm faces obstacles, and the accounting department is no exception. As a business owner, staying on top of your finances takes effort, which is difficult enough when you're already wearing multiple hats.
Do I need to know about accounting to ensure proper books are kept for my company?
It's okay if accounting isn't your strong suit; there are plenty of people who can assist you. However, you must still maintain your books, organise them, and ensure that your employees are paid on time.
You should also keep an eye on all your transactions and make sure that your bank statements all match up each month.
What do you know about Collaborative Accounting?
Collaborative accounting is a concept that allows firms and clients to engage in real-time, removing the barriers of time and distance so that tasks can be completed more efficiently.
What are the common problems that business owners face?
Unable to get work done on time
A common scenario in companies is that staff accountants require time to close the books for the month while carrying out their day-to-day activities. This will eventually snowball and will lead to the books being closed inefficiently and oftenly months after its being due. With that, business owners will miss out on making accurate and timely financial decisions once the management accounts are out.
When compared to having a collaborative accounting with us, business owners must hire full-time accountants, which is rather costly.
Hiring a junior accountant, for example, may cost between $2,500 and $3000 per month; nevertheless, doing collaborative accounting with us will only cost you $100 per month.
Focusing too much on accounting
Small business owners are responsible for a variety of duties that can consume time in their daily schedule. Sales and marketing operations, the hunt for financing, product development, accounts payable, accounts receivable, and business expansion can be tough for entrepreneurs to balance.
If a small business owner is unable to recruit support in these areas, it might be difficult to devote the necessary attention to all aspects of the company. Business owners focus too much on accounting can have an impact on business growth.
Regulatory Changes & New Accounting Standards
The new regulations of the Companies Act enforced by ACRA and IRAS can be a challenge for in-house accountants. Most of them are unaware of the updated regulatory changes and accounting standards. This is in contrast with Accounting Firms who are always up to speed on the latest regulatory changes and new accounting standards.
Reconciling your books
Closing your books can be a hassle, especially if you don't have a good accounting system in place.
It's all too easy to make a mistake that leads to inaccurate calculations, data analysis, and even audits, which is why you should double-check all of your company transactions at least once a month.
It's a good idea to go over your accounting accounts at the end of each day while the transactions are still fresh in your mind.
Difficulties in preparing cash flow
Cash flow is one of the most prevalent issues that small businesses face. Many businesses fail in their first year due to cash flow issues, and this is largely due to small business owners' lack of knowledge about how to manage their own money.
Small business owners frequently struggle to set aside funds to meet expenses, making it tough to remain on top of bill analysis and track down payments from consumers.
With a proper accounting system, bolstered with experienced and knowledgeable accountants, small business owners will be able to improve the company's image and make excellent business sense because it allows you to focus more on growing the company.
Forgetting to report small transactions
How do you handle small transactions in your company? It’s tempting to dismiss petty cash transactions as insignificant, but your company must keep track of all of its expenditures, no matter how minor.
This is particularly essential in retail settings, where many transactions are conducted with cash. Small transactions, such as paying for the postal delivery, should also be recorded, even if the amount is insignificant.
We can keep track of the minor transactions, and the bigger ones will be much easier to manage. You'll be able to simply manage your books when your firm develops in size and the number of transactions increases if you keep track of little transactions.
To sum things up, all of the above are the common problems faced by business owners.
If the above strikes close for your company, consider reaching out to us. We can manage your accounts and transactions while giving you some financial advice to help your company grow. So that you can focus on other responsibilities.