Atomic Accounting!

Atomic Accounting: Habits are the Compound Interest of Business Improvement

Looking for a long- lasting, low risk, high return way to improve your small business this year? Building and improving your bookkeeping and accounting habits is guaranteed to build value for your customers AND your company. The best thing is that it’s free and you can start anytime. 

3 Habits and How They Build Value

Habit: Send monthly statements to customers on the 1st of every month with a personalized email asking them how business is going. No statement is too small!

Value: Customers know where they stand, can plan their cash flows and are reminded to take advantage of any trade discounts you are offering and are more likely to pay you in a timely manner.

Habit: Record expenses paid personally by shareholders on a monthly basis instead of waiting for year end.

Value: Sales tax ITCs (which may be significant) can be claimed more frequently and improve cash flow. Shareholders can access their updated loan balance when planning remuneration through salary or dividends. This is especially true if shareholders pay for a significant number of items on their personal credit card.

Habit: Explore unused functions available in your current accounting software on a regular basis. 

Value:You already paid for that expensive accounting software (on average business owners only utilize around 20-30% of the software features they purchased) so learning to utilize the available functionality will likely save you accounting fees at year end, and help you improve cash flow planning during the year (think minimizing short term, high interest debt), or gain margin by assigning more recoverable expenses to customers that you didn’t track before.

Pick a habit! Which one are you starting with?

Author James Clear published Atomic Habits in 2018 and we give him the credit for referring to habits as “compound interest”. Despite habits being dangerously over- analyzed, Atomic Habits is really about the tips and tricks that allow us to actually implement all those habits successfully and make them stick.