For many wellness business owners, financial management and bookkeeping might not be the most exhilarating part of the day. However, it’s a crucial element that can make or break your business.
Efficient financial tracking not only helps you maintain control over your finances but also empowers you to make informed decisions for growth. Here are some best practices for streamlining your bookkeeping systems to make life easier and your business more profitable.
1. Choose the Right Accounting Software
The first step to efficient financial tracking is selecting accounting software that meets your specific needs. It needs to be both user-friendly and versatile enough to handle industry-specific transactions like membership fees, class bookings, or retail sales.
Look for software that can integrate with your existing point of sale system, CRM, and even your scheduling software. We like Quickbooks Online because it streamlines nicely with most banks and allows additional access permissions for accountants come tax time.
2. Regularly Reconcile Your Accounts
Account reconciliation is the process of ensuring that your financial records are accurate. Doing this regularly, preferably weekly, can prevent errors from turning into significant issues down the line. This is where having a bookkeeping service on your team can save you the time of doing this yourself.
Use automated reconciliation features in your accounting software to speed up this task and minimize errors. If you hire a bookkeeper, be sure to answer any questions in a timely manner and review how things are reconciled so you can spot any trends or issues early.
3. Employ the Profit First Model
The Profit First model is designed to prioritize profitability from day one. By allocating percentages of your income to Profit, Taxes, Operating Expenses, and Owner’s Pay, you automatically put your business on a path to financial health.
Implementing Profit First is straightforward but can be transformative. And it’s not complicated if you’re following best practices. We have a tool that can help!
Download our free Profit First Overview to help you get started with Profit First today!
4. Delegate and Train Your Team
If you’re wearing too many hats, you’re likely not wearing any of them well. Delegating bookkeeping tasks to a dedicated staff member or a contracted professional allows you to focus on your zone of genius—running a wellness business and supporting your clients.
Training is Key
Make sure the person you delegate to understands the nuances of financial tracking in a wellness business and is trained on your chosen accounting software. Create an onboarding training so any new team members understand your business’s values and mission.
5. Regularly Review and Revise
Taking the time to review your financial reports monthly or quarterly can offer invaluable insights. By assessing your Cash Flow, Profit & Loss, and Balance Sheet, you can make informed decisions for your business.
If something isn’t working, or you find opportunities for more efficiency, don’t be afraid to tweak your system. Constant iteration can lead to a more streamlined and efficient financial tracking system over time.
Effective bookkeeping is not a one-time setup but an ongoing process that evolves with your business. By implementing these best practices, you’re setting up your wellness business for both immediate gains and long-term success.