Most small businesses are great at procrastinating their bookkeeping until they really need something from it. Let's face it bookkeeping is pretty unattractive to most business owners. Bookkeeping is not sexy, it can be intimidating and for most people it is boring. Many business owners don't make bookkeeping a priority because they have not been shown how to use their small business bookkeeping as a tool to help them make better business decisions. Every once in a while a business will need something from their bookkeeping and it can be eye opening. Examples of when you might need an updated and accurate bookkeeping system are: applying for a business loan, trying to raise money, an investor meeting or filing your taxes.
A neglected bookkeeping system will not be able to produce the information you need in a timely manner. When you can't produce accurate business financial reports quickly to someone requesting them it is embarrassing. It also says a lot about your business in a negative manner. Once a business has gone through one of the above situations and failed they typically wake up and realize that bookkeeping is important and needs to be updated regularly. Here are all of the reasons why your bookkeeping is behind and how to overcome them.
Lack Of Time
The number one excuse I see for not keeping updated books is the lack of time. Lack of time is one of the worst excuses for not succeeding in business. It is not a lack of time that keeps you from updating your bookkeeping it is a lack of making time. People don't lack time they lack the desire to do all of the tasks that need to be done. Unattractive tasks like bookkeeping get pushed further and further down the to-do list until you are tired and the day is over. So you push it to the next day and then that day comes and you see bookkeeping at the top of your list. Then you think of all the other things you would like to do other than bookkeeping. This is a vicious cycle that continues and once you fall into this habit it is tough to break.
The solution: Block off some time on your calendar each week for bookkeeping and get it done. Consider using outsourced bookkeeping services to keep you books updated on a regular basis.
Lack Of Knowledge
Many business owners are not accountants. While many may have a degree in business or some aspect of business they may not have focused in accounting. That leaves most business owners with an accounting education that is an overview at best. Worse, that minimal accounting education may have happened a long time ago. As time goes on that short stint of an accounting background fades away and bookkeeping becomes a more difficult task to accomplish with confidence. So if you don't have the knowledge to do your bookkeeping anymore how do you get it done?
Solution: If you still want to do your own bookkeeping consider hiring an expert consultant to offer you QuickBooks and bookkeeping support.
You Hate Bookkeeping
Let's be honest a lot of business owners hate bookkeeping. I even have my frustrating days when I hate bookkeeping. A common theme working with small businesses is that many owners dislike their bookkeeping. Some cringe at the very mention of the word bookkeeping. No doubt small business bookkeeping can be painful; and the further behind it is the more painful it can get to bring things current. As I said before bookkeeping is not the sexiest of business tasks; yet it needs to get done.
Solution: If you don't like bookkeeping find someone that does. As odd as it sounds there are people out there that actually enjoy small business bookkeeping and they are pretty darn good at it.
Accounting Is Intimidating
Accounting can be an intimidating task. What if you code something wrong? What if things don't balance? What if you get audited? Will your do it yourself bookkeeping hold up in the eyes of the IRS? There are a lot of things that can go wrong when handling your own bookkeeping; things that could change your business and your life. The last thing you want is to have your bookkeeping neglect come back and result in a life changing event. It is the fear of handling your bookkeeping incorrectly that makes it such an intimidating task.
Solution: We always recommend that you have a solid CPA in place for your business. Make sure your CPA thoroughly checks over you books each year to assure everything has been handled correctly.
There are so many reasons that you can put your bookkeeping off, it is just that none of them are good reasons. Your bookkeeping system can provide you with valuable information that can help you run your business. No matter what your reason is for letting your bookkeeping fall behind find a way to keep it updated and use it to your advantage.