Accounting and bill paying are elements of a business that are too important to neglect. If you are a small-business owner, whether a sole proprietor or a partner, you might become so busy with your growing business that you overlook important tasks. When you reach this point, it's time to start automating or delegating -- particularly the time-consuming job of keeping the books and paying the bills.
The secret to controlling your cash flow and paying all your bills on time is a good accounting system. Accounting software eliminates some of the time-consuming steps in bookkeeping by facilitating the selecting and paying of bills. Software can use online bill payment or cut physical checks, and it simplifies tracking the execution of those payments. Software can also automatically download debit and credit data from your bank, making it easier to keep the books and control your cash flow.
Even if you use accounting software, it takes time to categorize credits and debits and reconcile your bank account every month. Hiring a bookkeeper or accountant can relieve you of this burden. Your bookkeeper can also prepare a tickler file of bills to be paid and can have checks cut by your accounting software and presented, with the bill and return envelope attached, for your signature. This allows you to maintain control over the access to your checking account and to choose when to pay certain bills that can be put off.
In many small partnerships and corporations, partners or co-founders split the duties according to their skills. Usually, the chief financial officer or controller of your company handles bill paying. To control risk, require two signatures on every check, and establish this requirement when you open your bank account. In a small company, partners often handle several jobs. The person in charge of finances may also be marketing to attract new business, writing contracts, managing employees and not having enough time to devote to single-handedly doing the bookkeeping and bill paying.
If you are a typical business owner, you probably keep information in your head about when money is due to arrive and when major bills must be paid. This is a habit that can result in disaster when you get busy, and you might need to give someone else access your bank account to pay bills and monitor your revenues. Hiring a bookkeeper or outsourcing to a bookkeeping service are possible solutions. Also consider outsourcing payroll to your bank or a payroll service. Established bookkeeping and payroll services generally carry insurance protecting their clients from any errors or omissions committed by the service. If you hire an internal bookkeeper, make sure your business insurance covers errors and omissions as well as fraudulent activities such as embezzlement.