How Founders Lose Time with the Financials

Founding a business takes stamina and a lot of guts! It’s definitely not for the faint-hearted. Still, many individuals choose to go down this route because they strongly believe in their idea and know it will be successful. If you’ve founded a business, you will already know the immense effort required just to get things off the ground. An often-underestimated part of running a business is the financials. Many founders end up spending far too much time on this area because it’s complicated. Accounting is a whole skill set and it takes a lot of studying and experience to know how to make the best of your business’s financial situation and run it efficiently. Many founders struggle alone with their finances and they wind up using up all their time trying to deal with financial issues. Even worse, mistakes are often made as a result. And we all know how costly financial errors can be. If you recognize this issue within your own business, it’s time to make a change and start doing things differently.

Time is Money

If we all viewed our time the same way we do currency, we’d spend it a lot more wisely. But the thing is, time really is valuable, so you absolutely need to treat it like a currency.

Write down how much time you are spending daily on each area of your business. You will likely find a disproportionate amount of it is being spent on the financials. Since it takes an average of seven years before a business is fully established, is that something you can afford to do each day?

Clearly, the goal is to free up that valuable time so you can spend it on other areas of the business that need it more, but how can that be achieved? Well, first, you need to take a look at what you’re doing wrong.

How Time is Wasted on Financials

Founders tend to start businesses because they’re passionate about something, not because they have mapped out a financial strategy. This is why founders’ business financials are often messy, inaccurate, and entwined with personal finances. Here are some of the common ways that time is wasted on financials:

Mixed Business and Personal Bank Accounts

It’s hard enough keeping on top of personal financial activity, let alone mixing in business too. Having mixed accounts makes it incredibly difficult to work out which is which. When it comes time to file your taxes, an incredible amount of time is wasted trying to get the right information compiled.

As the old saying goes, never mix business with pleasure, and this is one of the reasons why. Always have a separate account solely for business activity and never use your personal account for any business financials.

Not Keeping Records Up-to-Date

Financial transactions, accounts payable and receivable, and any other financial activities need to be properly recorded. Letting it pile up will create a mountain of work that takes a mountain of time to sort out with a high chance of making errors. Not to mention, you might find yourself in trouble when tax season rolls around, or you’re the lucky recipient of an audit.

Records need to be properly maintained on a daily basis. While it still takes time to do it each day, it’s far more efficient than leaving it for months or failing to do it at all. Proper records also give you an accurate picture of the health and liquidity of your business. This is especially important if you want to seek investment.

Not Using Proper Software

Accounting software is great because everything can be stored in one place, and a lot of financial activity can be automated, which is a fantastic time-saver. Using dedicated software makes errors far less likely and gives you the ability to pull reports as and when you need them without having to spend time creating them manually.

Many founders will use something like an Excel spreadsheet or, even worse – write everything down in a book. If you lose either of these things, you’ll have to do it all over again. The best part is that accounting software is cloud-based, so you’ll never lose your data!

Not Getting the Right Help

Founders are known to be proud and independent individuals, and sometimes requesting help does not come naturally. However, hiring an accountant is the best solution as it takes the headache out of trying to do it all yourself and significantly lowers the risk of errors being made.

Hiring a qualified accountant will enable you to:

Have accurate and up to date financial records whenever you need them
Ensure that there is enough liquidity to manage invoices and bills and that they are paid on time
Have a clear picture of the health of your business
Know how much liquidity you have at any given time
File your taxes with ease
Look more attractive to potential investors
Spend your time growing and/or scaling your business

You’re likely recoiling at the thought of the cost of hiring an accountant. It’s true that an accountant can cost you a lot of money, especially if you don’t need one full-time. The great news is that there are other options available out there to suit your needs.

Virtual accountants like EvolveCFO make it affordable for founders to get the help they need at an affordable price point. You have access to a team of dedicated accounting professionals who can take care of everything for you, and all work is completed on cloud-based software, so you can access it anytime you need.

Pricing is arranged into tiers, so you only pay for what you need. As you scale your business, you can scale the level of service too.

Wasting precious time on financials is no longer necessary, and you can spend your days doing what you love instead. Get in touch today and let EvolveCFO make you richer with time.