This is the recurring stressor I hear time and time again. My company’s accounting is just overwhelming I am so afraid that I am doing it all wrong that I just cannot even deal with it. First of all let me reassure you. You are not alone and this is totally normal. We all feel a very real sense of overwhelm when presented with tasks that are outside of our skill set and or comfort zone. Second, I am here to help you. I may not have the magic wand to make all of you accounting fears disappear but I do have a few ideas on how to drastically reduce that feeling of impending doom. Read on to learn my tips for managing accounting overwhelm.
1. Identify the problem.
In this case I would hazard to guess that the problem is that you don’t completely understand the expectations of the tax authority. The other side of that coin is that you have not established a clear strategy for managing your documentation.
2. Make a list.
Before we can create the ideal solution we have to identify the questions. Grab a sheet of paper and make a list. I want you to write down all of those repetitive accounting fears that are taking up valuable mental space. Some examples to get you started might look like:
- What type of business entity should I be?
- What are my deductible expenses?
- Do I have to collect sales tax
- How much do I need to save for income taxes?
- How do I receive credit card payments from customers
- Do I need a new bank account?
3. Review and research.
The act of getting those fears out of your head and on to paper will most likely relieve some of that anxiety. Even if you don’t feel significantly better you have a place to start. If you are a do-it-yourself kinda gal/guy then you can take it to google. If you realize that you need support you now have a great start on finding the right accounting person for your business. Consider this your list of interview questions.
4. Create actionable items.
A lot of the overwhelm experienced by entrepreneurs is experienced by just not knowing where to start. The key to accomplishing what feels like monumental tasks is to break them into smaller pieces. If you kick it old school grab yourself a stack of post its and a white board and break out each item from your list and give each one a time frame so that you can stay accountable. One of my favourite way to stay on top of things is to use google calendar or iCal. I created a calendar just for my upcoming bill payments. In the details I added who the vendor was, the anticipated amount. I referenced my bill to find out what my due date was and used this to create the monthly, quarterly or annual recurrence. Here’s the thing the calendar did happen in one day, I added new items once I received them. Essentially this is a process that you develop over time in about 3 months you should have a complete picture of your month to month. Next up getting organized….
5. Create an organization system that works.
It doesn’t need to be fancy, it doesn’t need to be beautiful (no need to break out your inner Martha just yet), but it does need to be functional and logical. What I mean by this is that you need to be able to find any document that you are searching for in under a minute. Bonus points if you can do this without relying on your software to locate the hard copy.
Remember my last post where we discussed the chart of accounts? Your chart of accounts is a great template for your system. This is ideal for sorting your documents after they have been posted in your accounting system.
If you process your receipts in batches less frequently I recommend getting an accordion file. If you are going to organized “by month” then take the extra time to do it chronologically. Also, don’t rely on your memory alone. Make notes on your receipts so that you know what they were for later on and note which account the expense was paid from. This is my golden egg to you…trust me. When in doubt…KEEP IT!!! If you are uncertain about the eligibility of any expense keep the receipt and set it aside in a file labeled “ask my accountant” On that note, please please please get your bank and credit card statements and print those suckers off if your receive them in PDF.
Back that @ss up
one of the beauties of living in the 21st century is all of this amazing technology that we have access to. There are several FREE apps for smart phones that you can download that will allow you to snap a picture of your receipts and either e-mail them directly to your accounting software or another service like Evernote which allows you to index and tag documents like they are your bff on Facebook.
Spending the time up front to really organize your papers will save you mucho dinero. Most accounting professionals charge by the hour. If they have to spend time sorting through your files to find what they need then this is considered billable time. I really hope you have found this helpful. I would love to hear from you, does your accounting system make you feel overwhelmed? What needs to happen to reduce this for you?