Owning a business can keep your schedule filled with necessary duties. Sometimes, it can be difficult to keep up and accomplish everything on your to-do list. This can cause some things to be put off for another day. In many instances, the thing that is continuing to be put off day after day is your business finances. Bookkeeping should be updated regularly to ensure accurate financial decisions are being made. Not doing so could lead to your business suffering from expensive costs and penalties.
Procrastination is something that many everyday people suffer from and business owners are definitely not immune. Procrastination in any area of business can cost your company a pretty penny, but procrastination and business finance are two things that should never go hand-in-hand.
What Is Procrastination?
Procrastination is putting off responsibilities for no specific reason. In a study performed by Darius Foroux, out of 2,219 participants, 88 percent of those participants admitted to procrastinating at least an hour every day.
There are many reasons as to why people procrastinate:
The fear of failing
The need of achieving perfection
Not knowing how to do something
Many business owners tend to fall into the trap of procrastination due to the negativity that they have associated with finances and numbers. Most people, even business owners, have not been taught how to manage finances and money, so it would make sense that handling these financial responsibilities is uncomfortable to them.
The Negative Affect of Procrastination and Business Finance
Bookkeeping is an important area when managing a business. Procrastinating your bookkeeping duties can result in many errors when you actually do get around to it and this can cause you to blindly make financial decisions for your business. Procrastinating in this area may also result in failing to make a proper budget, because you don’t have accurate and updated financial information.
Bookkeeping also helps you keep track of your company’s payables and receivables. Bookkeeping allows you to make record when customers are making payments to your business. If you ignore this, you may not be able to track when they are not making their payments to your company and as time passes it becomes more difficult to collect. Along with this, your accounts payable will be affected, because your payments to your banks and vendors won’t be made on time. This can really hurt your company’s credit and reputation.
Without updated financial records, you cannot complete your tax returns and IRS penalties will begin to incur and cost your business a pretty penny. For an LLC business, your tax penalty can be up to $195 a month multiplied by the number of members for the late return. For a C-Corp company, late penalties can be around 5 percent per month of unpaid taxes.
How to Beat Procrastination
Procrastination is common, but in order to be successful, find a way to beat procrastinating habits. Some helpful tips to beating procrastination include:
- Positivity; be clear about your goals and consistently speak positive affirmations over your goals and objectives.
- Schedule your bookkeeping work in small chunks on your calendar; make your schedule realistic and achievable, even if its just five minutes a day.
- Separate big problems into small tasks
- Don’t be ashamed to ask for help. If you feel like you need to hire an accountant to help you catch up, do so.
Bookkeeping does not have to be a stressful task, and procrastinating it will only make the issue worse and could cost your business a lot of money. Fight procrastination, especially when it comes to your financial responsibilities and you will see your business thrive.