(Newswire.net — April 13, 2019) — Over the past few years, the Japanese philosophy of “KonMari” has gained a significant amount of attention across the world. This philosophy—drawing from lasting traditions and recently popularized by organizer Marie Kondo—involves looking at all of the things you own and deciding whether or not they “spark joy.”
In theory, KonMari makes it easy to declutter your home by identifying the things that you need and the things you can throw away. The method itself is both simple and effective, making it accessible to people from different cultures everywhere. Unsurprisingly, Marie Kondo’s books and television programs have all become quite popular.
While the KonMari method was primarily developed for cleaning one’s house and “tidying up”, its principles seem to be truly universal. If there is something messy in your life, you should take a look at it and ask yourself “does this spark joy?” If not, why are you still keeping that thing in your life?
If you are the owner of a business who is looking to tidy up your books, then the KonMari method may be surprisingly useful. While this technique will obviously need to be adapted to your specific situation, using these principles can help you create a set of books that is both useful and “joy” inspiring. In this article, we will discuss a few of the ways you can declutter your books and enhance your general bookkeeping practices.
We will also review how an outsourced accounting team can provide value to your business in many different ways. With tax season coming to an end and spring cleaning just around the corner, now is the perfect time for your business to make some changes.
Develop a digital bookkeeping system
If your business is still using paper to balance your books, you are not only years behind in terms of technology—you are also creating much more stress for yourself than is actually necessary. While making the switch to a digital bookkeeping system may be rather cumbersome at first, the benefits of this change will compound over time.
Fortunately, there are many high quality accounting software products to choose from. While QuickBooks is the standard accounting system for most new businesses, there are plenty of other reasonable options available as well. Using a digital system makes it easier to track information, generate reports, and also minimize the time in each day dedicated to bookkeeping. Furthermore, if there is a mistake in your books, you can easily correct an entire report at once, rather than needing to go back and make specific entries by hand.
Consolidate your Financial Reports
One of the things that can make reading your balance sheet difficult is the fact that your business simply has too many different classes of assets. Your balance sheet is supposed to represent a “snapshot” of your business’ assets, liabilities, and equities at a specific point in time. Having too many categories can make this particular financial report much more difficult for investors and internal decision makers to digest.
For example, instead of entering each item that your business uses for production individually, you may want to consider having a broad category titled “equipment.” Instead of listing each of the properties your business currently owns, consider consolidating these assets into a category titled “property.” When your business does need access to the more specific details, these details can still be found elsewhere. But in the meantime, generally striving to create a cleaner balance sheet will ultimately make it much more useful.
Review each item that your business currently owns
As time has gone on, your business has accumulated a considerable amount of things. While some things will be used on an everyday basis, other things are merely sitting around and collecting dust. Making an effort to periodically review the things that your business actually needs can help you operate more efficiently and ultimately increase your bottom line.
Instead of asking yourself, “does this spark joy?”, you should be asking yourself, “does this serve a purpose?” If your business has property lying around that hasn’t been used in years, you could potentially sell that property, liquefy into cash, and then use that cash to serve a much more objectively useful purpose.
When going through the things that your business owns, you should try to simultaneously consider the value these things could be sold along with the value these things actually provide for your business. For example, if something is worth $10,000 and that thing is only providing your business with a few hundred dollars’ worth of value each year, selling that item may be in your best interest. In order to make this process as useful as possible, it will be important to carefully select the right depreciation method and inventory management system.
Hire an accounting firm for the things that don’t “spark joy”
If you are like most business owners, then bookkeeping is something that you consider to be quite tedious. Instead of committing your time to the aspects of your business that are most productive, you find yourself consistently being tied to making manual accounting entries.
While advancements in accounting software and related technologies have helped make this process a little easier, bookkeeping still consistently ranks as the most challenging component of running a business. In fact, a recent survey revealed that more than 17% percent of small business owners consider outsourcing their accounting and bookkeeping services.
If bookkeeping is an activity that doesn’t immediately “spark joy”, then your business may want to consider bringing in some outside help. There are countless accountants and accounting firms available to choose from and—contrary to what you might assume—many of these people actually derive joy from what they do.
Outsourced bookkeeping services can help you organize financial reports, create books that are capable of passing an IRS audit, and also prepare your taxes each year. With a qualified CPA, you can have your questions answered throughout the course of the year and also make important decisions using objective, reliable information. While the degree of help you will end up needing naturally depends on the dynamics of your business, taking the time to compare your options can help you create a much more joyous year.
Conclusion
The principle of “decluttering” is not only useful in the home—it is useful in seemingly every other aspect of your life. Making an effort to declutter your books on an annual basis (or even monthly basis) can help directly improve both the financial and spiritual health of your business. By keeping these helpful tips in mind, your business can refocus itself and direct its energy in a more positive direction.