Thanks to Japanese organizational guru Marie Kondo, people across the world are "tidying up" their lives and clearing their spaces of anything that does not "spark joy."
The ultimate goal of the KonMari approach is to declutter and simplify. Whether it is a home, an office or a closet, Kondo urges people to purge their physical possessions in order to free their energy and time for the belongings that are truly important. The result, she promises, is life-changing.
When you think about Kondo's overarching message – letting go of anything that does not spark joy – it's easy to see how that same theme can be compelling in other areas of our lives, like small business ownership.
When it comes to managing their finances, entrepreneurs should consider viewing their bookkeeping through Marie Kondo's lens.
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Does it spark joy?
If you ask entrepreneurs what it is about their small business that sparks their joy, you may hear responses like connecting with customers, solving a problem for people, building a legacy or innovating a product. What you probably won't hear setting people's hearts on fire is managing their books.
Small business owners have consistently reported that managing their financial operations ranks among the top challenges they face, according to the National Federation of Independent Businesses' small business trends data. The small business mentoring organization SCORE reports that 40 percent of small business owners say that bookkeeping and accounting are the worst parts of owning a business. Still, a meager 10 percent of small business entrepreneurs outsource their bookkeeping, only 17 percent use a CPA for their accounting, and just 15 percent contract out their payroll.
Declutter the business owner's brain
Bookkeeping can be a tremendous time sink. Especially in a new, bootstrapped company, there are just not enough hours in the day for owners to do everything and do it well. Instead, entrepreneurs should focus on the things that put them closer to their business goals, such as marketing, sales prospecting, customer service and product development.
By using a digital bookkeeping service, business owners can declutter their brains of the seemingly endless details and mundane processes that go along with keeping their books up to date. Handing over bookkeeping to the experts will help turn the clutter of receipts, statements, logs and ledgers into actionable data that owners can use to make smart decisions about where to take and how to manage their business.
The mom-and-pop approach to bookkeeping can also prove to be risky, especially as a business grows. Even with the wealth of do-it-yourself tools and resources available, the sheer volume of data and paperwork needed to keep accurate records can be daunting. And, when the books are not in order, it could mean filing taxes with inaccurate information, which can have legal implications and financial penalties.
On the flipside, armed with accurate financial records, accountants are better equipped to see opportunities for deductions and areas where their clients could get tax breaks.
Do it once
According to Marie Kondo, people who embrace her method need only do it once to feel its positive effects. But, for some small business owners, just the act of getting started with a digital bookkeeping partner may seem like a ton of work – especially if they're staring at piles of spreadsheets, statements and receipts. But the reality is that the initial setup is simple, and it really does get easier from there. A good digital bookkeeping service will easily integrate with all major banks and financial institutions, which means owners never have to worry about uploading statements or scanning receipts again.
Owners should partner with a company that supports them with a real live bookkeeping expert on the back end. With this, they can quickly get answers to any questions that come up and speak with someone who is familiar with the intricacies of their business. Whether they need information for the bank, investors or the IRS, working with a digital bookkeeping partner makes it easy to quickly get an accurate and crisp picture of what's coming in and going out, see holes that need to be plugged, and make educated business decisions based on real numbers.
With an expert force handling their bookkeeping, entrepreneurs can get back to focusing on the parts of their business that they love. They can let go of the stress, frustration, and time commitment that comes with managing their own financial records and move toward creating and maintaining a business that truly sparks joy.