Anyone who has been into entrepreneurship for more than a year or two knows that personally keeping track of your finances can be quite a hassle. I have tried it many times, with several different methods, from doing nothing, to using Excel, to eventually using QuickBooks Pro. Although at the end of the year I have not been up to date, and everything I did was totally a lost cause because it is such a hassle to every day type into your computer little expenses, and income here and there. Have you tried to keep track of your accounting profit/loss only to find it a complete mess too after even just a month?
I believe the best way to do your accounting now, is to not do your accounting at all, instead, have someone else do it. Keeping tracking of finances every day, day in, day out is a hassle and everyone who tried to keep their finances clean every day, will probably agree with me that it is a hassle. It is a lot of work, and it is most likely not where your time is best spent either.
A more efficient, faster, systematic and ultimately better way to making sure your bookkeeping is up to date is to simply outsource your bookkeeping monthly to an accountant or an accounting firm. This way at the end of each month you can just gather up all of your receipts and send it off in the mail to your accountant and they will deal with your financial mess. Each month they can send you a report back on how you are performing and make sure your books are kept clean for the IRS, or even any potential acquirer of your company. If someone is going to acquire your company, trust me, they will be looking over your financials and they better be clean.
Wouldn’t it feel nice to just send all your stuff to someone else, and have him or her do all your financial reports, payroll, taxes, and monthly net operating income reports for you? If you have someone do it for you on a monthly basis, now you can focus on what you do best, and as an entrepreneur, that should be building systems.
Wes, but isn’t outsourcing your accounting work every month expensive? No, not really, it doesn’t have to be. My friends, although I won’t mention their names, generate over $6,000 a month in new monthly memberships for their web product, and what they do is simply pay an accountant in the city they live in about $100-$200 a month, each month, to keep their their books clean, and run their payroll for them.
At the end of the year your books are extremely clean, organized, and done correctly. Best of all you were able to focus on what you do best, and let someone else deal with all theses receipts. Also doing this method will allow your accountant to advise you early on what you should do to minimize your taxable income. If you send your accountant all of your financial files at the end of the year, that year is done, and there is nothing they can do to save you money on your taxes. But if you were continually meeting with your accountant on a monthly basis, and letting them handle everything, they would be able to tell you before the end of the year what you need to do before it’s to late. (At the end of the year, you’re accountant will now probably be able to help you save more money than you spent to have them keep your books monthly for you. Getting a monthly accountant is not a liabilty, outsourcing your accounting monthly is an incredible asset.)
If you do this, I’m sure you will agree with me, at the end of the year your company’s financial department will be a lot better off than if you had tried to keep track of everything yourself tediously in QuickBooks or even worse Excel. It will be better off someone who is experienced keeps track of everything, instead of you trying to multi-task every day and do to much, when someone else could to it better, faster than you could.
If you have seriously dived into, and studied entrepreneurship, you should understand that true big company entrepreneurship is really about building systems and processes. Systems and processes that your company will use, so it can operate with or without you 24/7. The biggest mistakes are those, which are made early on, making a mistake early like doing everything yourself, only to find yourself 5 years down the road as a self-employeed entrepreneur who got himself into a job instead of a big business.
What I’m saying is, if your going to do something make sure you do it the correct way, not the wrong way. And make sure to start the correct way, not the wrong way, by doing it right in the begining, because in the end there will be a huge difference in outcomes. Just by being aware of a simple concept like this can dramatically effect your company down the line in the thousands if not millions of dollars. And I believe if you want to build a world class company, or even do $1,000,000 a month with affiliate marketing, you should have someone else handle your books for obvious reasons, but more specifically it would be wise to outsource your accounting work on at least a monthly basis so they can keep it all clean and organized for you.
Tracking202, Inc is currently looking for an accountant in the Silicon Valley area, we will be outsourcing our accounting for a couple hundred bucks each month. And if someone chooses to acquire us later on they will be in awe at how well are finances are done. Start the process of building your business in a systematic way, begin the process of working on your business, not in your business. Start your business with the right mindset, that you are ultimately putting people and systems in place for you so you do not eventually have to do work all day if you do not have to.
And to do this I’d highly, highly, recommend outsourcing your accounting work each month instead of doing it yourself. It may cost you alittle bit of money each month, but if you make any money at all, at the end of the year it will have saved you money. And by meeting with your accountant often you will be increasing your financial literacy, which is more important than the money itself. Will you outsource your accounting, do you outsource your accounting now? Why not? What do you think?
“The Best Way To Do Your Accounting Is To Not Do Your Accounting.” – Wes Mahler