If after reading part one and part two in this series, you’re starting to see the value in better understanding your financial performance, then we’re in a good place to move forward. If you’re thinking, “Sure, that all sounds good, but I don't have time to put this much energy into tracking and thinking about my money—and I can't pay someone else to do it,” then you need to stop and reconsider. Having a relationship with your numbers is key to your success, but there are some tools you can leverage to reduce the technical work significantly.
The first principle is automate, automate, automate. The more you take these valuable—but admittedly time-consuming—processes and automate them, the more you'll be able to see the value in your data without feeling the pain. In the not-too-distant past, getting any information out of your accounting system was a nightmare. Data input involved long hours of tedious work—or hefty fees paid to bookkeepers to do it for you. But in this web 2.0, cloud-based, app-driven business ecosystem, there’s no reason to keep your accounting records in Excel or tape expense receipts to a piece of paper. And by leveraging these systems to automate financial functions, you’ll use your money and time more efficiently—taking technical work off your plate and freeing you to work on the business.
Next, recognize that other people can help make your business a financial success—and the best part is they don’t require a salary or benefits. At a minimum, your financial team should consist of your accountant, your banker, your attorney and your coach. They'll help you to make smarter decisions and protect your biggest investment of all—your business.
You should bring your accountant on board for tax prep time at a minimum, though it helps to find a tax advisor who doesn’t mind fielding the occasional question throughout the year. Ask for recommendations from owners of some businesses you admire or who are at similar levels in your industry.
The banker is an often overlooked teammate, but in today’s age of bank mergers, online-only services and remote call centers, it pays in multiples to have a real human with a direct line you can call when something goes wrong with your money. Those are not the moments to wait on hold on some 1-800 number. Business bankers generally love taking you out to lunch and learning more about what you’re doing with your small business, and best of all, this relationship is almost always free.
Your attorney doesn’t have to cost thousands of dollars either, but it’s important to get referrals from people in your industry. The less time they spend learning the particulars of your industry, the less it’s going to cost you. To start, you’ll want your attorney to help you draft some template contracts and agreements that you can use over and over again—the kinds of things that help you make sure you collect your money on time and have inexpensive remedies in the event someone doesn’t pay you. This early, minimal and incredibly valuable investment means you'll have someone on speed dial when something bad happens—which is not the time you want to be looking for a lawyer.
Your EMyth Coach is there to make sure that everything you do to build out your financial systems directly supports your Vision. You’ll design action plans for the work to be done and tracking sheets for metrics, and discuss trends in your financial statements. Perhaps most importantly, your EMyth Coach will ensure that while you leverage a financial team, you don’t abdicate your financial responsibility to any one of them. No one is ultimately responsible for your business but you. And you have everything you need inside you to take that control.
With your financial team in place, there are a few important tools you’ll want to include as you automate your business finances. So here’s a roadmap for how to automate your financial processes—for about $150 a month—for a team of five:
- Time/Expense/Billing: Hands down, the best and most flexible time tracking system out there for smaller teams is an app called Harvest. This app lets you track time from the web or your phone to any number of projects and at multiple billing rates. This time can then be used to create timesheets for your employees or invoices for your customers. It has its own built-in reimbursable expense tracking to add to those invoices and it also plays nice with many other expense tracking tools.
- Bookkeeping: While QuickBooks is the grandfather of small business accounting—and not without good reason—there are many new players on the market that offer outstanding features, value and more intuitive interfaces. For those whose accounting needs aren’t too sophisticated, Xero is a major player in the global market.
- Payroll: For anyone with employees (or even one person corporations that need to do payroll for themselves) there's great value in having someone else handle your payroll. A payroll processor will generally take on full liability to make sure your taxes get filed and that all the tax payments are paid to each government entity on time. Even big firms like ADP can do this for you relatively inexpensively, though newcomers like Gusto are driving cost down even more.
- Receipts/Mileage: Shoeboxed started out as a company that literally let you ship them a shoebox full of receipts that they would then digitize and send back to you in a nice, clean file. Since then, they realized a bigger need in the small business community and have expanded to do so much more. Now, you can snap pictures of your receipts from your phone or email them straight from your inbox. And you can add them to expense reports or track them to finally be able to account for cash spending. Best of all, the Shoeboxed app utilizes the GPS in your phone to help track your mileage with just a couple of clicks, so there’s no more notebook in the car and last minute hair-pulling.
With all of these resources, there’s no reason to go it alone when it comes to your finances. With the right tools and teammates, you can take control and get the information needed to make smarter financial decisions. But the most important thing to consider with all of these tools is that you like to use them. Because at the end of the day, the perfect tool at the right price won’t add any value if you don’t actually use it. So take advantage of free trials, test out how you would actually use the tool in your business, and make sure you enjoy interacting with it.
Want to take it to the next level? Great. After you’ve mastered automate, automate, automate, it’s time to integrate. When you get these various systems talking to each other, you do two important things: cut down the amount of time you have to spend on your finances and reduce the opportunities for human error to come into play.
For example, the invoices you create in Harvest can automatically transfer into your Xero accounting system, so they are tracked as receivables and ready to be paid. The payroll you run on ADP can automatically link into your Xero file so you don’t have to make manual journal entries. The expense reports you create from Shoeboxed can drop into Xero without entry so they appear ready to be repaid. Think about the systems that are pivotal to your organization and then integrate the related financial systems that work well together to get closer to your turnkey business—and give you a big sigh of relief.