It’s that time of year, when we reflect on the things we need to do better and what can be changed for the incoming year, to have more success. You’ve been putting off cleaning up your accounting system. Your books. It’s painful to think about cleaning up the mess that already exists, but you know you can’t make good decisions without good financial information. It’s critical to your success. What to do?
An alternative to spending the excruciating time and effort to clean up your historical books is to start the new year off right. So at the end of the year 2022, you will have a clean full calendar year of books done right, and as the year progresses, you can feel confident relying on the clean information that you’ve captured starting at the beginning of the year.
A few things to consider and take care of in order to get this done and do it right:
What information do you need to have to make decisions?
This is the best place to start as it will drive everything else. What are the key questions you ask in order to know the health of your business and before making key decisions? They might be questions like: What does my cash flow look like? How much money am I making each month? What are my most profitable jobs or customers? Where am I wasting money? What adjustments can I make to be more profitable?
Knowing the questions that are important to you will help you decide if you already have the right software or need something else, and if and who would be the best partner to help you moving forward. Take a few minutes to think carefully about what those questions are. A good place to start is by considering the questions you ask that keep you up at night.
Decide on Accounting Software
There are a wide variety of software solutions with pros and cons galore. Some are industry specific. Some have lots of bells and whistles. The end of the year is a good time to reevaluate if necessary, but switching is a big task.
If you already have software that’s good enough for most of your needs, with no major holes for your industry, the simplest thing to do is move forward with that and make the other adjustments described below. Switching software may be a task for another time. Right now the focus is on getting your books in order.
Refine Your Chart of Accounts
Your chart of accounts is there to make sure your business captures the information that is important to you and the business. How do you know what’s important? Are you able to get the information you need to answer your most pressing questions when you need them? See above “What information do you need to have to make decisions” for some of the questions that you should consider.
Do you have the right categories set up to capture the information needed to make decisions? If not, make those adjustments now. Seek the guidance of a good accounting partner.
The advantage of starting the new year off right with your books in order is that you don’t have to do accounting system cleanup to have a clean calendar year worth of data. But, If historical data for analysis is very important to you, you can handle that incrementally as the year progresses and as your team or partner has the bandwidth.
Decide on an Accounting Partner
If your books are a mess, it’s more than likely it’s because you and your team don’t have the time or the bandwidth to properly handle your accounting internally. Continuing to try to do it yourself without the right resources will probably produce the same results. It’s time to bring in a partner that you can trust, to work closely with you, to get things done right.
This can be done in a few different ways:
- 100% onshore solution – This approach gives you the most accessibility, flexibility, and comfort. This is the most comfortable solution for the majority of businesses.
- Mostly offshore solution – This tends to be the least expensive solution but has challenges with accessibility due to time zone differences and communication due to language and terminology. As a result there can often be a disconnect between you and the service provider that creates frustration and a lack of comfort.
- Hybrid approach – an onshore lead and point of contact with offshore support for those that are comfortable with that. This can be the best of both worlds as it eliminates communication and time zone issues but you get the cost benefit by the behind the scenes use of offshore resources.
Curucaye provides accounting & bookkeeping solutions in all three categories. It comes down to what you are comfortable with and what will work best for you. For the 100% onshore solution, all of our resources are North American based.
Obviously there’s a lot more to consider including improving financial processes, delivering the right info to the right people at the right time, etc. but the items above can get you started on the right path as a new calendar year begins.