When major challenges that are faced by Startups and SMBs are discussed, price constraints remain on the top of the list. Obviously, funds are often limited for them and facilitating all the requirements is not easy in those circumstances. Apart from that, meeting time deadline is another factor in which businesses have to struggle.
Most startups and SMBs have the tendency of being focused on their main services and that somehow pushes the timeframe for accounting operations. Failure to meet the deadlines with the taxes, due payments, etc. can invite the legal penalties. Accounting delays with the clients and partners can cause serious losses to the business. So, slower accounting is never an ideal situation for startups or SMBs to be in. To overcome such delays, it is essential to understand the cause of delays:
1. Smaller Bank Deposits
Smaller bank deposit is a polite synonym for the monetary struggles of SMBs. The budget is smaller and that divided between various entities. So, the bank deposit is rarely sufficient for a larger payment, when required. When any urgency of expense turns up, efforts are made at collecting the amount from the different sources, which take some time to finally process the payments. Moreover, because of the smaller funds in backing, the expenses are too precious and you can expect intense thought involvement before taking the final decision. This could add to the delays in accounting task.
2. Inaccuracies with the Financial Gaps
Consider this example – an office space is currently priced at $100,000 and you currently have $80,000 allowance for it. So, you plan the business to make $20,000 more in a quarter of the time. At the end of the quarter, you realize it costs $110,000 now and you are still lacking the amount. The price of quantities varies with the time and other factors. Predicting these variations is not an innate talent of all the fresh entrepreneurs, because of which some make mistakes with futuristic commencements. Such mistakes with finance can keep on procrastinating the operations and keep business from reaching the desired targets.
3. Changing Suppliers & Vendors
At startups and SMBs, things change very rapidly. It means the requirements of the business also vary with time and that results in the change of suppliers, vendors, and partners regularly. As these parties are directly responsible for the monetary exchanges with your business, the regular changes or delays from their end will invite troubles at your accounting department. What’s even worse is that they may be adopting different methods of payment, which increase the complexities of payment (both – incurred and paid) significantly. The more changes with parties, the tougher it will be for you to balance the statements on time.
4. Lack of Accounting Expertise
Accountants have the expertise in their field that allows them to perform even the herculean accounting tasks within the deadlines. However, such expertise may not be the part of every entrepreneur’s skill set. But ignoring these shortcomings, they try to do the accounting on their own and do not hire a professional accountant. This might appear to be a money-saving option. But in real approach, lack of accounting knowledge will only cause errors and inaccuracies with the data, which will only add either to the delays or to the penalties. You might even miss on some important tax saving opportunities as well. And not to mentions the slowness with the work is inevitable.
Considering the limitations with the funds and resources, there is a lot of which smaller businesses have to compromise, but accounting must not fall in that range. You may adopt better ways to save money with the department operations by adopting for better technologies. Since being flawless and quick with the accounting are equally crucial factors of the business success, never allow the delays to stay with it as much as possible.