As a business owner, have you ever wondered just how much your disorganization is costing you? All that time you waste looking for things, files, or paying someone to clean up your books, research issues after you receive a government notice, or a vendor statement with a high balance? it really is money down the drain in lost productivity.
As an entrepreneur, you have to be aware of many things in your business. It is your responsibility as a business owner after all.
Here is a list of documents and things that you should keep organized:
- Business registration (Federal and State)
- Company bylaws for corporations
- The operating agreement for LLCs
- Employment agreement
- Employee Records
- Payroll Federal and State Filings and Payments
- Bank and Credit Cards Statements
- Deposit details (copies of checks received and invoices)
- Check copies or paystubs
- Business Tax Returns
- Customer Contact Records
- With today’s cloud technology, getting your documents organized is simple and easy to implement compared to the high cost of disorganization.
An organized system should be a helpful tool, not a hindrance to productivity. Stop procrastinating this very important aspect of owning a business, avoid the high costs and get to work in organizing your business documentation.
As I drive around town and watch all the leaves fall from the trees, it reminds me that just as nature clears the path for the new season, we as business owners need to do the same in order to grow.
The questions is, what do you want to achieve? Do you want to grow your profits? what will it take? Do you want to sell new services or products? what market research have you done? You get the idea, once you have answered this, you have to take time to identify the things that take up your time and energy and prevent you from reaching your goals.
For example: friendships, social media, hobbies, clients, credit card statements and ledgers, types of services or products, etc.
Once you have identified what you are giving up, make a commitment to getting it done, light the fire to clear the ground for you to plant new seeds in fertile ground!
No better time than the present to set goals, write the plan, clear the path and start anew.
Those who know me, know I am fascinated by politics and public policy which is why checks and balances resonates with me so much as an accountant and a business owner.
I find that small-business owners often have so much on their plates they might not notice what is actually taking place in their business that, if not addressed, can deplete cash, cause legal problems, or cause a host of other issues.
This is why I encourage creating checks and balances that allows you to implement an accounting system that promotes separation of duties. For example, separate accounts receivable duties from accounts payable. You don’t want the person in charge of receiving payment for invoices and services rendered to be the same person responsible for paying outgoing invoices and payroll. Making accounts receivable and accounts payable interchangeable duties can lead to serious cash misappropriation.
Another example is to require monthly reconciliations to be completed by an independent person who doesn’t have check signing responsibilities. Review the reconciliation report to document that a review and reconciliation was performed and keep a record with your files.
Most people have a distorted sense of who is most likely to commit fraud which is why creating the proper checks and balances minimizes your business’s exposure to fraud and other misappropriations.
Besides the key is to adopt the the attitude of the founding fathers – we hope and believe that people our worthy of our trust but at the same time, we put in place measures to reduce our need to rely on trust alone! Do you have check and balances system in your business?