I'm an engineer, I like building and always felt that I should spend more time delivering value than counting what I am making. Also, I was trying to solve for growing revenue rather than reducing cost—which I still think is what I should prioritise.
However, this is my 4th year in business and with expenses rising and having to manage payroll. I have begun to realise that I have not been the most realistic with my choices at times. I appreciate the wisdom of the older folks who have been successful at creating wealth from running a business and think it’s important to get the basics right.
I want to start putting in effort to do my accounts regularly and would love if I could have a checklist of sorts which I could just tick off regularly rather than it being a never ending project.
I'm curious for how successful business owners on HN manage this?
Does any have a template they like to use? What questions should one’s accounts system be able to answer? What type of decisions does it help you make?
Appreciate any help!
Certainly in the U.K. small businesses with a turnover under a certain amount can have their accounts signed off by a chartered accountant and then submitted to companies house.
Over a certain amount accounts have to be audited.
Day to day - cash flow is the most important thing to any business. Can you meet your outgoings, what is your burn rate. Being able to predict several months into the future with some degree of certainty is very useful.
How much cash will be in the bank at the end of each month over the next 6-12 months.
If our prediction is wrong, why are they wrong? What assumptions are we making that are incorrect?
If you are burning cash, what is the runway? How many months before fund raising is needed?
These tools are great, they allowed me to see instant balance standing and allowed me to do forecasting on my reports. VTiger was really great because my costs were directly tied to project management which allowed me to predict costs way more accurately than my competitors.
As great as that was, it could not ingest bills automagically nor was the format consumable by my accountant. Every month I would spend 8-16 hours updating bills manually. Every year end I would spend 20-30 hours to export my data into excel to send to my cpa. These hours shrunk by half before I sold the business but I never went back to a DIY/OSS approach for accounting again, instead I relied heavily on the OG Quickbooks desktop app.
I don’t know what I would use today, likely salesforce or something similar
Or Waveapps would be my second choice, but I haven't explored how it handles local taxes.
data/timetracking/
With this structure I can build PDFs by parsing markdown all calculated and branded with my logo. But you can also see a good overview in the most markdown Wysiwygs or Gitwebs. On the last page of my invoice I automatically add a tasks summary listing for every task I worked on. It's simple, can be edited with vim or within the development environment, can be `grep`-ed and still pretty flexible (as you see you can even do refunds).
For my little business this is enough... # Customer
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John Doe
Mainstreet 5
10001 New York
My project to work on
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# Time tracking
2023-02-27
- 17.52-18:41 A project task
- 18.42-19.49 Yet another project task
2023-02-28
- 11.52-12:11 Something else
- 16.43-19.01 And even more
- 00.05-00.00 Refund
Also a fair bit of Excel for certain things that are more practical to do separately and put in as summary entries. E.g. I have custom Excel app (VBA/form) for rapidly reconciling credit card and banking expenses and tying in the correct image from a bulk set of receipts that I've scanned.