6 Accounting Practices That May Be Sabotaging Your Bottom Line
Accounting may not be your talent. That’s okay. You’re a professional who is dedicated to helping kids, and you need to use your time efficiently to help nurture those kids. Sometimes budgeting and accounting can be the last order of business in a busy week, but without taking care of budgeting basics, things can unravel pretty fast. Below are some common accounting issues I run into when working with clients, along with some simple suggestions that can help!
- Doing nothing – Do you have any idea how much money you are spending? What about the income you are generating? Do you have enough cash for your payroll? Doing nothing can cause a lot of stress and worry each time payroll comes around. Tip: If you are having difficulties making payroll each month, it might be time to stop and take a look at what your income and expenses are. Find out where you can increase your income and cut costs so you have enough cash each month to pay your bills.
- Not using your budget – Why spend the time on a budget if you are not going to use it to help you plan your cash? If you have created a budget, use it. Tip: Review the budget each month and see how you did. Were you able to control your expenses, and have enough cash to pay your bills? Were you able to bring in the amount of income you were projecting for the month? If not, don’t worry. Try again next month. You can even adjust your budget if you find it is not realistic. A budget will help you plan for the cash you need, and if you have a surplus each month, you can save for larger purchases.
- Eating out – Do you know how much you are spending on those quick trips to the coffee shop or the local restaurant each month? Those expenses add up! On average, a small business spends $500 a month on meals. Tip: That is extra cash that could help with payroll. Instead, try making coffee or a dedicated meal a special treat for your staff once a month. They will appreciate it.
- Bank fees – Not planning for your cash each month can generate hefty bank fees. One example is going to the ATM down the street instead of your bank. Each trip to the ATM can be $1.50-2.50, and a NSF fee can be $35-$37 per expense. Some centers don’t realize they are generating these bank fees each month. Tip: Fees can be avoided with proper planning. Have a plan for your cash.
- Paying everything at once – Are you paying all your bills at the same time? Tip: Did you know you can call your utility companies and ask for different due dates so you don’t have rent, insurance, phone and electricity all coming out the same week? Spreading out those due dates can help with your cash flow each week.
- Not realizing you need help – Directors only have so much time. Your time is valuable! It’s okay to hire someone to help you. Time is money and there is no shame in admitting you need help. You can’t do everything! Tip: If your center is growing, look into hiring a part time accountant or office manager to help with accounting needs. You can also outsource your accounting, where reports are generated each month for a monthly fee. There are a variety of options out there to meet your needs.
Bottom line: Take some time to do a financial inventory of your business and take control. If you are a participating DPP provider in need of help with your accounting questions, plan a free visit with me and I will help you steer your budget in the right direction. If you are not a DPP provider, but still would like a consultation, my services are available on a fee for service basis through the Council.
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– Leslie Zirker firstname.lastname@example.org
Leslie Zirker has been working in accounting with small businesses for the last 12 years. She has her degree in Business Management & Finance. She is a mom of 5 kids, loves theater, and loves to see businesses succeed with small changes.Back to Our Blog