Stage II: Mistakes Made By Established Businesses
1. Falling behind with accounting. In the midst of the whirlwind of your daily routine, accounting concerns may take a backseat to operational priorities. But as your business matures, at some point you’ll need to circle back, correct mistakes, and account for every transaction. If receipts are piling up or you’re having trouble balancing your balance sheet, it may be time to consider an alternative solution to your manual processes.
Accounting software is one way to become more efficient, eliminate computational errors, and prepare financial reports in an industry-accepted format. Built-in data backups and security can protect your information; when year-end approaches, you’ll be happy to have financial data stored in a format that can be easily transferred to your tax preparer.
2. Rushing to add administrative positions onto your payroll. Everything is important when you run a small business. But as a small business owner, there is only one of you, and you can’t do it all. Differentiating your business, finding your next customers, closing the next sale, and making sure you provide a quality experience that keeps them coming back are all essential, revenue-generating tasks that should be taking your time.
It makes sense to bring people on to help with the internal, administrative duties that have to get done but don’t necessarily contribute to success. Unfortunately, these employees can take a toll on your cash flow. And when revenue is lean, they still need to get paid.
Instead, you should consider outsourcing some administrative tasks, which can often be done at a fraction of the cost it would take to hire an employee to do them. For instance, you will want to hire employees to help sell, make products, and provide service. But to pay them, you may consider outsourcing to a company that can handle this for you without the commitment of salary, benefits, and training that an employee would cost.
3. Making regulatory mistakes. When you hire employees, there are many state, federal, and local payroll and employment laws that come along with them. To make things even more complicated, these laws and regulations may overlap and can be amended. Unfortunately, ignorance of the law is no protection to you as an employer. If you accidentally run afoul of these rules, you could be subject to heavy penalties and fines, some of the costliest ramifications of making business mistakes.
These are just the types of unexpected hits to cash flow that can lead to real problems for your business. If you’re in a good position financially, you may now find yourself in trouble. And if you’re squeezing by, this could cause irreparable damage.
Instead of trying to keep up with everything yourself, it makes sense to bring in external resources that specialize in these matters and hold any necessary licensing. Tax filings, payroll processing, workers’ comp insurance, and other HR matters often make sense to outsource, and can help protect you from costly and unnecessary mistakes.
Did you miss part 1 of this post? Check it out by clicking here.
Article written and published by Paychex, Ameris Bank’s partner for simple, virtual, cost-effective payroll and HR solutions.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.