By Dennis Najjar, co-founder of AccountingDepartment.com, a proud sponsor of the 2023 WPO Entrepreneurial Excellence Forum
Are you a female entrepreneur looking to maximize the growth potential of your multi-million-dollar business? Have you been struggling to leverage best-in-class accounting techniques that can propel your organization forward in an optimal manner? You are certainly not alone. Many female entrepreneurs, who have faced incredible odds and achieved remarkable success, find themselves still grappling with how to manage their finances most efficiently.
But tackling your accounting isn’t as hard as it may seem and to help get you on the right path, we’ve compiled some practical advice for taking control of your accounting processes and supercharging your growth! These principles will help shape the way you approach and understand financial management as an enterprising leader.
1. Understand the Basics of Accrual-Based Accounting
Having basic accounting knowledge is one of the keys to success for any business—and companies on track to grow do so faster and more efficiently by embracing full accrual accounting. Accrual basis accounting focuses on transactions that have occurred regardless of whether payment has been received or not and records your expenses when they occur rather than when they are paid. This method, in combination with proper revenue recognition, can help stabilize your financial outlook and help you see your accounting story through the numbers.
2. Utilize Technology and Automation
Automating accounting processes is a great way to free up time and money for businesses of all types. With the right accounting technology, accounting workflows can be streamlined, resulting in more efficient use of resources. Automated accounting systems ensure accuracy by eliminating the potential for mistakes and allow users to access financial data quickly and easily. In addition, accounting technology often helps users keep better track of assets, liabilities, and other financial information for effective decision-making. Today’s accounting platforms—such as QuickBooks, NetSuite, etc.—sync with applications across a wide array of specialties such as expense reporting, time tracking, inventory, e-commerce sales, and more to create a comprehensive and integrated accounting system that gives you all your information together.
3. Outsource Your Accounting Needs
As a business owner, you know that proper accounting and bookkeeping are critical elements for success. One of the pandemic-driven shifts in business organization was the idea that core competencies should be tackled in-house and other business activities may very well be handled better when outsourced. Why? Because in addition to freeing you from the task of managing other departments, it leverages the internal thinktanks of third-party companies whose main goal is to stay abreast of trends and opportunities. For women-owned businesses, this may be even more mission critical as you can rely on the advice and expertise of companies who are keeping a direct eye on opportunities available specifically for women-owned and operated small businesses.
4. Track Your Cash Flow
Another pandemic-inspired insight that many women-owned businesses learned firsthand was the need to have an accurate way to forecast cash flow. And even more so, to adjust and update forecasts in real-time as situations changed. Simply—staying on top of cash flow forecasting is essential for company success. By tracking cash flow daily, business owners can easily anticipate possible bumps that could appear down the road, making it easier to navigate their journey ahead. Even more so, having the right cash flow dashboard in place provides a complete financial overview, allowing owners to monitor their cashflow quickly and accurately in real-time. However, cash flow forecasting doesn't stop there; understanding cash flow patterns across all aspects of a business will enable owners to make more informed decisions and create an even better cash flow forecast. Therefore, tracking cash flow daily not only offers a better understanding of day-to-day financials but also provides peace of mind knowing what the future holds.
5. Invest in Financial Planning Tools
Spending money can feel like an effortless task – simply swipe your card and boom, the pillows are purchased – but managing those spending decisions is a crucial part of financial planning. Your business is nothing without a proper budget—and yet time and time again we meet businesses operating without a company-wide budget and/or department-specific budgets. This puts female entrepreneurs at an immediate disadvantage by removing direct control over your company’s financial picture. The right budget in place is managed by systems and tools that will track your budget against actual spending and give you a monthly view of how you’re doing. It will also enable you to make edits and adjustments to your budget as things change during the year. Consider investing in software that captures transactions from accounts, creating a comprehensive overview of your finances. Analyze spending trends or take advantage of features to create personalized budgets at different levels or goals. With full visibility into spending habits and diligent budgeting, you can make better decisions about how to best allocate resources for your own personal financial gain.
Without a doubt, accounting is one of the most important aspects of running a business. Even if it may seem intimidating at first, female entrepreneurs should strive to build a basic understanding of key principles of accounting—and especially the key components of reviewing and managing financial information; it could be the key to successful and sustained growth for any business. With enough dedication and an open mind, aspiring entrepreneurs can quickly grasp the nuances of accounting and start growing their businesses with confidence. Furthermore, seeking the help of expert advisors or consulting services is often wise; cloud-based software solutions or other modern tools may also come in handy and make accounting easier to tackle. The journey towards successful entrepreneurship requires discipline and courage—which is exactly what your accounting requires as well.
About the Author
Dennis Najjar
As co-founder of AccountingDepartment.com, founded in 2004, Dennis Najjar is committed to best practices in accounting and supporting small to medium-sized businesses. With his years of professional practice, Dennis possesses the knowledge and experience to oversee the AccountingDepartment.com team in helping clients with strategic business planning for future success and growth.
Learn more at accountingdepartment.com.