Are you still managing your own small business books?
Are you still managing your own small business books?

Are you still managing your own small business books?

I heard a staggering statistic at last week’s Xerocon conference: 50% of small businesses fail without a financial advisor to help them understand their books. I looked deeper into the research and found another surprising statistic from Xero’s Make or Break survey of small businesses. Of 2,000 small business owners whose businesses failed, 65% of them blame financial mismanagement. A recent Inc. article tells us, “Successful entrepreneurs don’t make the mistake of mishandling their finances; they manage their money well and keep a close eye on cash flow and other financial reports.”

Yet, there are countless small business owners out there managing their own books. In our practice, we tend to see people when they run into a problem—their taxes get thorny, the IRS starts poking around, or they realize their books are a mess. These issues tend to arise because entrepreneurs are skilled and passionate about their core business functions—not bookkeeping and accounting. They must ask themselves, “Is bookkeeping the highest and best use of my time?”

With all of the technology and automation in the accounting field, it can be tempting to think that you can handle your business financials on your own. What we’ve seen is that there are many tasks technology handles extremely well: eliminating dual data entry, managing paper, paying bills, and keeping accurate records of who’s doing what, just to name a few. Where the human element comes into play is in helping you understand what your books are really telling you.

The right financial advisor is your partner in making business decisions, helping you to determine if you are applying best practices to your accounting operations, providing insight about how much you can afford to invest in your business, whether you’re ready to hire new staff, or how to make your spending work to your advantage at tax time. Cash flow issues, for example, can be anticipated and remedied with the right forecasting (and a little help from technology). Tax planning works wonders when it comes to being prepared at tax time and even reducing your tax liability. Getting out of the weeds with day-to-day business management—such as running payroll, tracking expenses, managing workflows, and keeping records—will free up your time and energy to focus on the things you’re passionate about.

Xerocon is one of the biggest cloud accounting events of the year, so it’s no surprise that there was a lot of talk about tech and automation. However, no one has lost sight of the human element that’s vital to the accounting field. Most business owners don’t launch on day one with a sophisticated accounting platform. They do all inevitably reach a point where a series of spreadsheets and DIY bookkeeping solutions just aren’t cutting it for their small business books.

Our cloud accounting division, GCT Technology & Accounting, grew naturally out of our traditional CPA practice as a way to keep up with the direction of our industry without diminishing the critical role of a real, live person looking at your financials. We’re here to help you through daunting financial issues and find a pathway to growth and success. We’re also here to grow with you, making sure you stay on track and make the best possible financial decisions. Contact us today to schedule a consultation.

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