Updated for 2013:
Yes, it’s almost here—the end of the calendar year! While most people are asking themselves what is the best way to celebrate New Year’s Eve, freelancers and small business owners should first be asking themselves important financial questions about their business finances. Before the clock strikes midnight on December 31, here are some questions you should ask yourself and your bookkeeper or accountant:
1) Are my general ledger balances reconciled with my bank statement balances?
2) Are there any accounts receivables or bad debts that can or should be written off?
3) Are the inventory balances correct—do they include inventory items that should be written down to match their actual market value?
4) Are the listed fixed assets still owned and properly depreciated?
5) Have all adjustments been made for any prepaid items such as insurance and fees?
6) Have all payables been accurately recorded?
7) Have all payroll tax liabilities been reconciled with the quarterly reports?
8) Are all of the notes payable accounts (loans) reconciled with the bank statements?
9) Are all debts included in the year-end financial statement?
10) Are all accounts receivables been reviewed and correctly aged?
As you prepare to answer these questions and check your financial records, are you even sure that those records are in good order? Can you and your financial advisors easily access all of your documents? Are all of your invoices, receipts, and business documents entered and indexed? Do you have a comprehensive way to keep track of all of the relevant conversations and emails with your clients and customers? Have you sent out your final invoices and collected those last payments?
Those of you who follow our Writing It Right For You Blog know that we periodically highlight the great apps we use to run our company. We actually use the apps we recommend—after we’ve tried several similar apps. All of the apps we recommend are especially designed for people and companies like ours: freelancers, SOHO (Small Office/Home Office) business owners, and solo practitioners—they are not scaled down versions of larger applications meant for large businesses.
You know that if you treat your business as a business, taking good care of the administrative tasks are just as important as completing the actual client work. If you are a freelancer or a small business owner with 1-10 employees, check out the apps that we have found to be very helpful to keep our business records in order, to manage our clients and our projects, to do our bookkeeping and accounting, and to invoice our clients.
All of these apps are online and are SaaS, which stands for “Software as a Service”. Instead of plunking down hundreds of dollars for shrinkwrapped software SaaS applications are delivered and supported directly to your computer online for a monthly subscription fee. Besides the ease of use, one of the things we most like about our apps is that they are interrelated and work together so that we don’t have to enter the same information repeatedly.
The data is secure and can be accessed from any computer (and mobile devices in most cases) with an Internet connection. A good group of apps to start with if you are considering using cloud-based apps and keeping of your client and financial data in the cloud:
- HIghrise by 37Signals for our CRM (Customer Relationship Management) application to keep track of all of our prospects and clients.
- Freshbooks for time tracking and invoicing for your clients.
- GoDaddy Bookkeeping (formerly Outright) for small business bookkeeping and accounting.
Happy New Year—here’s to greater success and a more organized business for you and your company!