I remember talking to a friend about keeping track of my freelancer invoices once and he feigned falling asleep.
“Why are you talking about bookkeeping? That’s boring and everyone hates it,” he said.
He was also doing some freelance work, so I tried to explain how putting in a little bookkeeping time can translate to big savings, but he wasn’t into it.
“I just don’t like numbers.”
It’s a pretty common excuse that freelancers and business owners use to procrastinate on their general accounting tasks. And we get it: you’d rather be doing the work you love than crunching the numbers you don’t, even though we all know how necessary it is.
But bad bookkeeping will cost you money. So let’s tackle your top excuses head-on and see if we can’t get you to power up that calculator.
“I just don’t like numbers/math”
Let’s get this one out of the way first. We hear this excuse a lot, and if you’re reading this, there’s a good chance you’ve made this excuse as well. But the truth is that general bookkeeping for your small or midsize business (SMB) or freelance work just doesn’t involve much math.
It’s a common misconception that basic bookkeeping requires a head for math and numbers. That’s not true at all. It’s mostly about entering expenses and income into your accounting system, and letting the system do all the math for you. If you can copy/paste, you can do general bookkeeping for your business and personal needs. – Naomi Granger, CPA
This excuse is like not tipping at a restaurant because you can’t figure out 20% of the total. Nonsense.
Basically, if you can add, subtract, and punch numbers into an Excel spreadsheet, you have all the tools you need to do most of the bookkeeping your business needs. Can it get more complicated? Sure, but only if you really dive into forecasting and projections. Just doing the basics is easier than pi.
“My bookkeeper/accountant does it all so I don’t have to”
This excuse is common, especially for growing SMBs. The owners realize that things are getting complicated as they scale, and hire a firm or an individual to deal with the paperwork that they should be handling. The problem here is that these SMBs will pay for just a few hours of this service each year, usually right before tax time.
This approach costs you money.
The reason is because accountants don’t always have your back. Not only will they charge a hefty fee by the hour (especially during tax time!) to simply sort through your receipts, but they just won’t push very hard to figure out the maximum tax breaks for your business. Why? Because they’re just not as invested in your business as you are. No one is.
The reality is that this excuse is similar to saying “I go to the dentist twice a year so I don’t have to brush my teeth.”
Maybe your oral and financial hygiene will survive, but there will be more problems and costs in the long run.
Doing basic bookkeeping on your own (organizing invoices, tracking profit/loss) will save you a ton in fees, keep you accountable for your business’s financials, and make sure nothing slips through the cracks that could save, or cost, you money.
“I don’t have enough time to deal with it”
The phrase “time is money” is never more true then when you’re running a small business. It feels like every hour not spent on your business is money lost. But you’d be surprised to learn just how little time it takes to keep your books balanced.
A report by score.org shows that the majority of small businesses spend less than 80 hours on taxes, payroll, and working with an accountant in an entire year. That comes out to about 1.5 hours a week, and that’s including way more than general bookkeeping as working with accountants usually takes a bulk of that time during tax season.
And remember, getting started is the biggest time sink, as you’ll have to clean up bad data and figure out your best method of keeping track of your income and expenses.
Once that’s set, the subsequent weeks will be easier and quicker. You can save even more time by ditching Excel and utilizing an affordable accounting software solution that can automate tedious, repetitive tasks such as monthly invoicing. In essence, it usually comes down to just 15 minutes a week to achieve bookkeeping goodness.
“I just don’t enjoy it”
This excuse is what we consider a more honest version of the first excuse on this list, because if you did enjoy something, you could put up with even the boring parts. If you liked bookkeeping, you’d bear the math involved.
While it’s impossible to force anyone to enjoy invoicing and tracking P&L, it helps to figure out exactly why you may be procrastinating on this “unenjoyable” task. According to 5minutebookkeeping, here are a few reasons:
- We don’t know what to do
- We don’t know how to do it
- Our need for perfectionism
- Our fear of failure
If these reasons strike a chord in you as to why there are negative feelings involved with bookkeeping, that’s okay! You’re not alone. Now that you’ve identified why you’re slacking here, you can address the reason or reasons.
When our clients get started, they often feel a mix of all four. We always advise them to start small. Just spend 15 minutes at the end of each week doing the basics. Don’t know the basics? Spend those 15 minutes reading about it.
Trust us, it’s not rocket science to keep your books straight. Just committing a little time each week can drastically change your mindset in this area, and potentially save you a ton of money.
This post first appeared on Capterra on October 19, 2017.