How To Save Money By Breaking Your Bad Bookkeeping Habits
As a small business owner you are always on the lookout for ways to save money. Saving money can help most of us to avoid unnecessary debt and extra costs such as interest charges. What many people do not realise is that bad bookkeeping habits can be very costly and drastically reduce the funds that you have available for savings. If you practice bad bookkeeping habits for very long, you may even lose your financial security and possibly your business.
The following are some bad bookkeeping habits that you absolutely must break if you wish to obtain financial independence and security.
Have a plan to do your books and keep up with your accounts on a regular and timely basis. The old saying “those who fail to plan, plan to fail” is very true when it comes to bookkeeping. If you put off your accounts too long you will find yourself rushing to compile your records at the last minute. Being rushed leads to costly mistakes and errors that should have been easily avoided.
If It Isn’t Broke, Don’t Break It
You know, it’s not up to you to single-handedly keep the major software developers in business. While it may be exciting to always have the latest gear and newest software and accessories, changing hardware and software all come with a price in terms of the time invested in switching from one system to another and also for the purchase price of the new software or gadget. If you have a system in place that is not that old and is currently doing the job, do you really need to blow a few hundred or thousand dollars to replace it just so you can have the latest edition, or because you have heard the latest edition might be easier to use?
Extinction Is A Bad Thing, Just Look At The Dinosaurs
The only thing that might be slightly more costly than paying to upgrade or change your software system every few months is the failure to evolve and use software at all. While keeping all of your receipts in a shoebox or shopping bag may have worked when you were a university student, if you want to have a handle on the operations of your business, some sort of software that tracks your income and expenditures is absolutely necessary for your survival. At a minimum, your software should enable you to track your income and outgoings as well as quickly categorise your spending and saving, to be able to make forecasts based on prior historical data by category.
Next week we will look at some more bad bookkeeping habits that you must break if you want to stay safe and secure in your business.