I hate math these days. I used to be relatively good at it and I enjoyed it but that was before it was a requirement to keep my company in operation and before it was mind-bogglingly frustrating when the number you get is not the number it’s supposed to be.
Often if you’re a creative entrepreneur / small business owner, you may not have had the training for or experience of running the financial side of a business, and this can be aggravating. While I do not claim to be an expert of any sort, I can offer you four tips to help you maintain sanity while crunching numbers in spreadsheets. We’d also love to hear from you - any best practices you suggest for staying on top of company finances? Or recommended solutions and resources? Let us know in the comments!
1) Be diligent about keeping track of expenses and income.
I mean OCD-level diligent. This may seem obvious, but can easily fall to the wayside in the midst of a production wave or planning a massive event and if you’re not paying for software that automatically downloads all your transactions. It’s important to set aside time at least once a week to input financials and once a month to reconcile your bank account and make sure you know where everything stands. If you have multiple payment streams it’s important to document what is coming from where - Stripe, PayPal, Square, etc. should all have the ability to filter and download transactions into a spreadsheet so you can analyze them.
2) Sweat the ‘small stuff’.
When you are dealing with numbers, you need to be exact and you need to record every little thing, including the random $0.11 from Google one month and the irritating chargeback you got one month that was reversed the next. If you don’t include those things you may throw off reconciling your bank account for the rest of the year and it will be difficult to hunt down the problem.
3) Make sure you’re aware of tax regulations and basic tax requirements.
State tax regulations in particular change frequently, even from year to year, so stay up-to-date on these - search for local news stories with this information and bookmark pages like this: NC Department of Revenue Info for Businesses, to make sure you know the latest. NC in particular has made updates for 2014 regarding Admission Charges for events (PDF). Also make sure you have what you need to file taxes - an EIN / Federal Tax Identification Number is the most basic element and things like Sales and Use require a separate registration process.
4) Find a great accountant.
I cannot stress this one enough. Though you can do many of the bookkeeping tasks on your own, if you clicked on any of the links in the above paragraph you’ll see how confusing things become very quickly. Yes, accountants cost money. But if you find a great one, he / she is worth it. A great accountant will be willing to help you find answers to financial questions you have, will work with you to file taxes, and will guide you in putting together financial information in an organized and detailed manner, saving you hours of trying to figure it all out on your own. (We personally love Barb Sarvis, CPA, PA.) It is also important to find someone you can trust and be brutally honest about the company’s financial state. Ask other people or networking groups you are a part of for referrals, and always make sure you are upfront about all monetary aspects of the business.
If you remain organized and diligent about reconciling transactions and respecting deadlines, it’s not nearly as burdensome as it can sound at first. I’m not saying I've started actually enjoying math again yet, but I am finally learning how to set up financial processes that work and that is extremely rewarding.