There is a famous fable, that I’m sure we’ve all heard before: A mouse living in the jungle comes across an angry lion. The mouse is terrified, and he wants to run away, but then he spots a thorn stuck in the lion’s paw. That’s why the lion is so mad! The brave little mouse decides that despite the risks he has to help the lion. He pulls out the thorn and afterward the lion is thankful. He doesn’t eat the mouse. In fact, later when the mouse needs help, the lion saves him.
Your bookkeeping is that lion. It’s angry and it’s scary, and sometimes you want to run away. But, it just needs a little bit of attention. And once you’ve pulled the thorn out of its paw, you’ll be surprised at how helpful it can turn out to be.
There are lots of reasons why you might think that your bookkeeping is a wild beast trying to eat you. It feels safer to run away or ignore it completely. You’re worried that you’ll do something wrong and get eaten by the IRS. Or you have a bunch of numbers, but you don’t know what they mean? How can you make sure that you’re using that information the right way?
The best way to move past those fears is to be a brave little mouse and confront that lion. The only way you’ll make things better is by doing something. Because what you’re doing now isn’t working for you. Right? Why else would you be here?
And how can you do that? Well, that depends on how much of a start you’ve got. If you’re not doing any bookkeeping at all, tracking your expenses is a good place to start. Don’t judge yourself to start with, just write everything down. You’ll be surprised to see how much money you’re spending in certain places. The first time I did this, I found out that I had spent over $500 on eating out in one month!
Honestly, that’s the hardest step, finding and gripping that thorn. After that, pulling it out is easy. Figuring out what to do with your money is a lot easier, when you know where it’s going.
And why should you do all that work? Ignoring that lion hasn’t hurt too much so far. Well, there are a couple of reasons why you should want to take on that lion. First, ignoring it doesn’t mean that it won’t bite you anyway. If you’re doing something wrong, and you get audited, the IRS will still want their bite. But, the bigger issue is that you won’t have the amazing ally that your tamed bookkeeping could be.
There are huge benefits to taming that beast. Great bookkeeping gives you so many tools to make your business better. First of all, it lets you know what you’re spending. Do you make sure to spend every dollar wisely? If you aren’t tracking, how do you know?
Beyond that, though, keeping up with your bookkeeping allows you to react in real time. What if one of your product lines stops performing? How will you know? More importantly, when will you know? You can’t change your marketing or your product in response to the change if you don’t even know about it!
Another big benefit of taming your bookkeeping year round is that your tax preparer won’t have to do it for you. Instead of sorting through a box of reciepts, they can use your financial statements. They’ll be so happy to not have to tame that beast that they’ll probably charge you less. How often do you get to say that you saved money on your tax prep?
The biggest benefit to taming the bookkeeping beast is the ability to compare your business to others. Do you know if you are spending the right amount of money on your marketing? What if I told you that businesses like yours spend about 3% of their revenue on marketing? Would that mean anything to you? If you could open up your bookkeeping software and see your current revenue and marketing numbers, it would. If you’re spending more, you know that your marketing needs some work. If you’re spending less, you can look and see if you need to step up your marketing. That right there is the biggest way that great bookkeeping can help your business.
So, as you can see, there are big benefits to being a brave mouse and taming your bookkeeping beast. Until you are brave enough to take the first step, you’ll never get to see the benefits of a tamed bookkeeping lion.
For more tips on how to save time on your bookkeeping, download my free report: 8 Ways to Spend Less Time and Have Better Bookkeeping. Or, to find a partner to help and guide you on this journey, schedule a free consultation with me, The Serenity Keeper. If I keep your books, you keep your serenity.