AD – guest post. Depending on where you are in your blogging for profit journey, you may or may not yet realise just how important accounting is to your business. It’s far more than just being on the right side of the law.
Why Keep Detailed Accounts?
From your accounts, you can gather information that will help with a multitude of business decisions you’ll have to make for your enterprise to grow:
- Big decisions, such as if you can afford to expand or alternatively how and where to make cuts when finances are tight. Every decision that impacts your bottom line should be taken with reference to your finances.
- Analysing how you’re doing is vital, otherwise, you don’t know if you’re slowly running out of money or if that great-sounding project is worth the time and effort.
- Setting a budget. Looking at past business performance tells you when you’re likely to see a slowdown in sales or when things will speed up due to seasonal demands. When you can see what happened in previous years, by looking through your records, you can anticipate and plan your business schedule and activities.
How Accounting Can Protect Your Business
One of the main reasons why some businesses fail is by not managing their finances properly. Learning accounting is important for any business owner. This becomes even more so as the business grows. Whether you’re managing one blog or have expanded into an entire network of online enterprises.
Some of the ways accounting can protect and help you:
- Detecting Fraud – this is so important and yet fraud and theft can be really hard to uncover. Whether you’re dealing with unscrupulous customers or companies, or whether your staff are taking advantage, keeping a close eye on your accounts makes sure you know where every penny is going and can spot irregular transactions.
- Investment and Funding – if and when the time comes to approach the bank for financial help, demonstrating a sharp insight into your accounting will put you in a good place when asking for a loan or applying for a grant.
- Smoothing out Cash Flow – when you’re watching your accounts, you’ll know who your slow payers are and which of your clients or sponsors bring in the best profits. Bottlenecks in cash flow can quickly send small companies under.
Bookkeeping – the ‘How’ and ‘Who’
If you’re already running an extensive network of blogs, you’ve probably got help with accounting. But maybe you’re thinking about expanding your team. Depending on your location and needs, you could consider taking on an accounting technician apprentice. This is a way of keeping your costs down while also investing in your future, and someone else’s.
If you’re more at the start-up stage, you might be wondering what your options are to get going with properly managed accounts. There are three approaches:
- Bookkeepers. Lots of bookkeepers are self-employed, so they’re willing to help with your books as and when you need them. Maybe a few hours each month to bring things up to date. They could also do it on a daily or weekly basis to help with invoices. Bookkeepers will also make sure your accounts are ready to submit to an accountant for your end of year taxes.
- Accountants. An accountant will prepare your end of year reports and statements and submit your tax return. With their in-depth knowledge of business accounting and how finance works, they’re also able to offer advice and help you avoid potential future problems.
- Keeping your own accounts. This is a perfectly viable solution too, especially if your needs are relatively straightforward and you can devote the time. Bear in mind you’ll be responsible for keeping all your records, claiming all your expenses, and compiling your end of the year tax return.
There is also a fourth way, which is to do part of the work yourself and get expert help when you need it. So you could, for instance, keep your own books through the year and then have an accountant go over everything at the end of the year.
Whichever route you take, learning a bit about accounting so you can use the figures to your advantage really can help you take your blogging business to the next level.
While you are here why not check out more of my blogging posts?
What to Consider When Setting up a Business?
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