Exploring the mindset of adopting good accounting practices — Lionesses of Africa

by Charmel Flemming 

Are you an entrepreneur or small business owner who feels like there aren’t enough hours in the day? Do you feel so bogged down with daily tasks that you can’t get around to implementing strategic plans in your business? Do the phrases “accounting”, “tax submission”, “compliance”, “forecast” make your skin crawl? Don’t worry; this is not one of those tiresome infomercials. 

Our physical state of being can often determine our mindset and mental health. The processes and operations in our businesses directly affect our physical activity and how much time, energy, and mental capacity we dedicate to different aspects of our lives and businesses. So, let’s get honest about the reality.

Working on your business vs working in your business.

Typically, freelancers or solopreneurs are a one-person band, and the service provided is dependent on them doing the work. Working in your business requires you to execute all daily work and deliverables to the client, whilst working on your business asks that you focus on the company’s strategic direction, vision, research and development, and decisions. And it’s essential that all business owners who want to grow, expand, and scale their companies focus on the latter. 

With the help of fast-paced technology innovations, intelligent solutions can help you run your business more efficiently. Advancements like cloud-based accounting can alleviate some of the pressure and overwhelm that business owners often experience on a day-to-day basis. You’d be surprised at how many tasks can be automated or outsourced without breaking the bank. The return on investment, resulting in your increased capacity to plan and build on the bigger picture of your business. 

An automated accounting system can streamline activities like bookkeeping, quoting, invoicing, getting paid and paying bills, and financial reporting and taxes. Some of the benefits of adopting a cloud-accounting system also include making informed business decisions quickly and accurately, saving valuable time with scheduling and automation, low maintenance costs and collaborating in real-time with your team or accountant and bookkeeper. 

A good mindset demands more than just good software.

You know that bottom drawer in the kitchen that you always fill with miscellaneous junk that you always think you’ll use but never do? Or the little ashtray in your car that you use as a trash bin that keeps filling up, and you never get around to cleaning it out? That should not be your accounting system! 

Besides agility, efficiency and efficacy, sound accounting practices ask that you also review, declutter, and streamline your accounting systems regularly. Adopting good accounting practices can give you a clearer insight into your business, owning your finances and leaving room for you to initiate more impactful items on the agenda. To adopt sound accounting practices, you need first to become acquainted with the basics of accounting if you are not confident about your understanding. 

Here are our top 5 tips to help you on your way to adopting good accounting practices:

1. Consult regularly with your accountant. Accountants often email or virtually transfer financial statements or management accounts. Don’t allow these valuable documents to “gather dust”. Read them and learn what’s happening in your business financially. If you don’t understand or are unsure about anything, don’t be afraid to quiz your accountant.

2. Keep it together. No, not your marbles! Keep your financial documents, invoices, receipts, statements, and sensitive information all in one place. Doing this makes it easier to find and less likely to lose. Cloud-based solutions like Google Drive, Dropbox, Hubdoc or Xero, simplify scanning your documents and storing them safely in the cloud. You also never have to worry about fading ink or dogs chewing pages ever again.

3. Shake it off and clean it up. Get rid of all the clutter in your financial strategies and systems and eliminate any processes that do not serve to improve your accounting practices – time to clear out that kitchen drawer or ashtray we discussed above.

4. Stick to the plan. Implementing good accounting practices takes time and effort, and even more so to keep the processes in place and work effectively. Ensure that your team aligns to the new, improved processes. Practice makes perfect!

5. Research and review. Google is a fascinating place, filled with endless information about everything. Do constant research (you can involve your accountant in this process) about the solutions and innovations available to help you maximize your business. Review processes and practices regularly to ensure they are still beneficial and work as expected.

How often have you heard, “I’ll gym when I feel better”, when in fact it should be, “I’ll feel better when I gym”? A good mindset regarding your business, finances and accounting starts with implementing good accounting practices. Set your company up for success with lean, agile processes and set yourself up for a healthier, untroubled mindset and improved mental health.