5 simple mistakes that could cost you your business
June 28, 2017 at midnight
One of the more stressful aspects of running your own business is keeping up with—and understanding—the accounting. Here are five common mistakes business owners make that could cost them their business.
1. Being irresponsible with the books
This can include missed entries, or just falling behind on entries. It's difficult to explain how much anxiety this can cause to anyone who has not experienced it, but the stress is real. Thinking you can fill in an entry later and then forgetting to do it can cause hours of work later on. Any extra work spent doing anything other than selling and innovating your product is money lost.
2. Not understanding the importance of accounting
While focusing on the parts of the business where your passion lies is important, other parts of the business like accounting cannot be disregarded. In fact, a more thorough accounting focus and in-depth analysis can actually help you discover more efficient ways of running other aspects of your business.
3. Missing your calling
You were meant to create and sell your product, not spend your days adding and subtracting. As important as accounting is, you should never take your focus off your true purpose: the creation that made your business possible. If keeping up with the financial side of your business is keeping you from the dream you had when you first came up with the idea, it may be time to enlist the help of a professional.
4. Mixing business and personal finances
It really goes without saying, but it continues to trip up new businesses trying to get off the ground. Keeping business and personal finances separate may seem inconvenient in the beginning, but if you are confident in the future of your company, the minor inconvenience now might just spare you the major inconvenience of having to close your business doors later!
5. Technology issues
Technology cannot be expected to fix everything, and even great accounting software doesn't guarantee financial success. That said, going cheap on the software won't do you any favors, either. Technology can do wondrous things in the hands of those who know how to use it, so if that's you, you're in a great position to succeed. The key is to be honest with yourself. If you're being forced to admit your passion is your product and you're not able to take charge of the financial side of your business, rather get a professional to handle the books.