5 accounting challenges (and how to overcome them)

Have you recently launched a business and want to know more about common bookkeeping and accounting problems you might face?

Starting a small business is an exciting (if demanding) time and it’s okay not to be an expert in everything yet. Learn about some of the typical bookkeeping and accounting problems faced by small businesses with this guide, including:

• Poor financial and accounting literacy
• Human error during data entry
• Poor cash flow for business expansion
• Legal compliance in your industry
• Cybersecurity

Go a step further and make sure your business is equipped with the knowledge to solve these problems. Read on to learn how to fix these issues to build a robust and successful enterprise with Countingup.

As a new business owner, it’s understandable that you might be shaky on financial terms and accounting practices. Starting your own business is an exciting time, yet with so much to do and consider, understanding the difference between net and gross profit might not be at the forefront of your mind. Depending on your background, you might even have absolutely no familiarity with these terms at all.

Therefore, a very early problem for new business owners is understanding some of the finer points of business finance and accounting. These terms and concepts are the foundations of the business world and you’ll have to become proficient with them if you’re to grow your business to a sustainable size one day. 

Investors and lenders want to see business owners confident with their money. While you don’t have to be an expert in everything to do with investing and tax compliance, it helps to get a feel for the basics within your industry. 

Some reading materials you might like to start with include:

• 10 Must-Know Business Accounting Terms
• What is Financial Management?
• What is the difference Between Gross and Net Profit?
• What are operating expenses?

It’s your quietest day of trading, you’re sitting down to a receipt or invoice pile that’s larger than you had realised and you’ve had a long week. Are you sure you have the stamina and focus to get every entry 100% accurate? Unfortunately, this situation is common for many small business owners, causing frequent human errors in their financial accounts, or at least it used to be. 

Managing your finances is difficult and time-consuming, but never before have new business owners had more chances to use accounting software to lessen the burden. With software features like the expense reminders, receipt capture and instant invoicing provided by Countingup, you can by-pass the admin drain on your time and keep your accounts more up to date and accurate.

Take advantage of modern solutions to old problems, get time back from your business and find an accounting software solution that suits you.

Even if you’ve got the financial terms down and have the latest and greatest accounting solutions available, you’ll still need to manage your money effectively. 

A critical vulnerability for new business owners is controlling their cash flow and planning how to use their profits. Without this foresight and consideration for how your business will expand and grow, many new entrepreneurs find themselves struggling to make their businesses sustainable.

Learn more about how you can improve your business’ cash flow and profits in our articles How to improve cash flow for your business and How to budget for starting a business.

Tax and business legislation are complex and evolving elements to factor into a business’ trading and future development. As a new business owner, it’s important to make sure you’re compliant with all the relevant regulations, including taxes on your profits and personal income, VAT and more. Otherwise, you may find yourself faced with fines from HMRC or in other legal trouble.

When it comes to tax compliance, your business can benefit from specialist advice from your accountant who can inform you about industry-specific advice and tips. The Countingup app can also help with more day to day elements of your business’ bookkeeping operations. Find a system that includes both and make sure your business is tax compliant going forward.

As a business, there’s a level of trust expected when it comes to handling customer and client data, especially payment information. Unfortunately, a considerable 43% of small businesses don’t have any type of cybersecurity defence plans despite them being a target for hackers.

While there are a number of routes for data hacks to happen across your business, don’t let it happen to your business’ financial records. Choose software that gives you peace of mind with cybersecurity protection and financial data storage in one place. Using an app like Countingup provides secure and instant data sharing with your accountant so that you don’t have to worry about who can see or access your company’s financial information. 

There’s so much to running a business, like keeping pace with your competition, budgeting, planning, advertising and customer service. So don’t let routine elements like bookkeeping and accounting cause you stress.

Use Countingup to take care of your financial admin and get back to spending time on building your business. Countingup is the business current account with free built-in accounting software that automates bookkeeping and simplifies tax returns.

With all your financial information in one place, you can take advantage of real-time profit and loss insights, automated invoicing tools and expense reminders. With Countingup, you can make sure your accounts are always up to date and accurate.

Gain more insight into your business’ performance and stay tax compliant while trading. 

Find out more about Countingup here and sign up for free today.