Top 5 Recordkeeping Mistakes of Small Businesses

1. Not having a system or using the "shoe box method".
2. Not keeping customer accounts accurate.
3. Not invoicing customers regularly.
4. Not following up on over due invoices.
5. Mismanagement by abdiction.

Set-up a record keeping system and use it.

Set-up a record keeping system and use it.

The 'Shoe Box Method' is evidence of poor management. Small business owners are busy, I understand. But how do you expect to ever be successful if you can't handle even the basic record keeping duties? What are you going to do when you really get busy? You'll probably go out of business or you'll throw away profits through unnecessary inventory, excess costs or missed business for lack of successfully completing the most basic business tasks.

If you don't have accounting or bookkeeping knowledge, get it or hire it out.

Basic bookkeeping is not difficult. However, if you don't understand business accounting and bookkeeping and don't have the time to invest in learning it, then hire an employee or outside service to do it for you. Not doing it is really not an option. Using your checkbook as a guage for business success and planning is a very poor system.

Keep customer accounts accurate

Keep your customer accounts in good order. One way to guarantee that you don't get paid is to keep your customer's accounts in a state of dissaray. This leads customer to believe that you can't handle even the most basic recordkeeping tasks and give them an excuse not to pay you. "I'm not paying until you get my account cleaned up."

Invoice customers regularly

Set-up a system to invoice customers daily, weekly or somewhere in between. You've done the work or sold the product, now you need to get paid. If you don't invoice customers, you can't get your cash.

Make sure you get paid

Businesses of all sizes work hard to provide excellent service and good products at fair prices. It's only reasonable to expect your customers to pay you in a timely manner. Stay on top of your accounts receivable and contact your customers when invoices aren't paid. Ignoring past due invoices will not keep your customers from getting upset; it will only insure that you don't get paid. And do you really want to do business with customers who refuse to pay?

Not managing is mismanaging

It's your business. If you don't care enough to manage it, who will?

Chris Gattis is a business consultant and coach specializing in small and medium business management. If you're interested in starting a business or managing your existing business more efficiently so that you can enjoy the financial success and lifestyle that drove you into business ownership in the first place, visit his website at http://www.BluePointStrategies.com or email Chris at cgattis@BluePointStrategies.com.

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