By: Heather Kirkby, director of product marketing for QuickBooks Online at Intuit.
As the economy roller coasters, it’s unclear what lies ahead. The best way to ride it out and stay on top? Tighten your seat beat and lean into the curves by having a well organized financial management system in play to make sure your small business is running as efficiently as possible to withstand any twists and turns.
You can’t measure the cost of disorganization, but the strain on a business is astronomical – wasted time and money, missed opportunities, loss of records, and even legal issues — not to mention stress! Here are a few things to keep in mind to create a foundation that’s rock solid:
Take stock of what you need – and weed out what you don’t
When you’re facing a mountain of old papers, organizing your financial records is too wearing a thought to even get started. First things first – make some broad decisions up front about what stays and what goes. It’s up to you how far back you keep files, but be aware that the time you are required to keep records includes the period of time during which you can amend your tax return to claim a credit or refund, or that the IRS can assess more taxes. As a general rule of thumb, never throw anything away that is younger than three years, and you may need to keep some records for up to seven. If there was ever a time that you did not file a return for any reason, keep those records indefinitely. If you’re unsure about a record, ask yourself if it could support an entry on a tax return, if it is connected to business property, or if it could support deductions that will be applied to other tax years. If your answer is yes to any of those questions, then keep the record.
Once you determine exactly what should be disposed of (and what shouldn’t), be sure your employees understand as well. Make a written list of “what stays” and share it with everyone in your company. A good way to make sure a file cleanup takes place is to mark your calendar and set aside a day for back-office organizing. IMPORTANT: Make sure to securely dispose of old financial records or sensitive materials! I recommend using a shredder.
Create a back-office system that lives with you in the 21st century
Take the plunge – migrate your paper files to your computer. A small upfront investment could eliminate hours of manual labor on an ongoing basis. If you’d like to go a step further, take your business online: the move will allow you to not only house your business in a safe place, but reap the rewards of a connected world with access to business insights anytime, anywhere.
One excellent, secure option is Intuit’s own QuickBooks Online (www.quickbooksonline.intuit.com), which enables you to manage your company’s finances online or from a mobile device. Migrating your back office online not only centralizes your financial management information, but also enables collaboration across the company on the books and eliminates the problem of duplicating work.
Go a step further with an online solution that offers mobile capabilities. As a small business owner, you’re undoubtedly an effective multi-tasker; a mobile solution that syncs with your online books will make you a master. Why not capitalize on the 15 minutes you’re waiting to see the doctor to follow up with customers who owe you money? Having access to customer information at your fingertips when you’re away from the office can improve your customer service game. You’ll be able to brush up on your history with the customer before knocking on her front door.
Be sure to select an online solution provider that you trust, to ensure the data you input while on the road safely and securely syncs with the rest of your system for seamless accounting. Most providers will also give you a small business rate, so your phone and data charges won’t be too hard to swallow.
Think critically about the needs of your company (e.g. goals for growth, number of employees, etc.) to choose a financial management solution that is right for you. If your business is growing, for example, you may want to consider online accounting options that allow multiple employees to access company data at once, so you can delegate certain accounting tasks to increase efficiency. If you’re worried about bandwidth, a range of sleek network accessories designed for small business needs can help boost network performance, while saving power and controlling costs. If you have specific needs – i.e. you’re a nonprofit organization, a construction company, or have some other specialized focus – make sure you choose a solution that’s tailored for your industry. That could mean that it has advanced capabilities for anything from inventory to tax reporting. Whatever your need, it’s quite likely that there’s a solution out there that’s tailored just for you.
Make your current solutions work harder for you
Data is power. Most businesses are sitting on top of a mountain of numbers – and with that – a mountain of intelligence that they could put to good use. Choosing a solution that compiles aggregated reports can allow you as a business owner to make smarter decisions that save time and make money. For example, a snapshot of how long it takes each of your customers to pay you can inform your decisions of what customers are best to do business with. Some solutions also show you how you stack up to other businesses in your area or industry, so you can see possible areas to grow or to reign in expenses. In QuickBooks Online, we recently introduced a Trends feature which does just that. Instead of putting your finger to the wind and guessing how your company is doing, investigate tools that will turn your business data into business intelligence.
Explore the world of online applications. Apps offer more than the games on your phone – in fact, there are hundreds of thousands that are tailored specifically to small business needs and can be accessed on a regular computer. Twitter is abuzz with updates on the latest small business apps (follow @BusinessApps (http://twitter.com/businessapps) and get updates almost every hour). iPhone, BlackBerry, and Droid fanatics also frequently dish about the best essential small business apps for their phones on various (easily searchable) blogs. Finally, you can check out the Intuit App Center (www.workplace.intuit.com) – a library of apps for small businesses by Intuit and third party developers that help reduce costs, manage customers, and run your business more efficiently. Look for applications that integrate with your other back office systems (e.g. your payroll and payments processing solutions), scale as your business grows, and are customizable to fit your specific needs.
One final point of advice: you wouldn’t build and furnish a house only to let it collect dust, so don’t let that happen with your business, either. Once you’ve built your foundation and reached a level of organization that your small business peers would envy, make sure to do some “spring cleaning” now and again to take full advantage of the time and investment you’ve put in so that you can spend more time focusing on your business.
Heather Kirkby, the author of this guest post, is director of product marketing for QuickBooks Online at Intuit. A seven year veteran of the company, Heather leads development and execution of strategy for QuickBooks Online. Heather holds an MBA from Harvard Business School as well as a Mechanical Engineering degree from Queen’s University. She enjoys arts and languages, outdoor sports and travel abroad.