Finance Horror Stories: The Terrifying Tales of Small Businesses. Part 1.
This Halloween, light the candles and take the time to read these truly terrifying tales of things that could go wrong with your small business — before it’s too late.
What you are about to read are documented true horror stories, and they are the stuff of nightmares; the kind of things that people never forget. They are horrible to live through, but in the long run, very useful — they teach you lessons that ensure the success of future projects.
These small business owners relive their tales of terror around the metaphorical campfire, so you don’t have to.
Warning: The following stories may be relatable and cause nightmares.
Part 1: What Happens When You Delay Your Bookkeeping
Here is a quick story about a business owner who learned the hard way that bookkeeping is an important piece of your day-to-day operations.
Found on an old tape recorder, John says “It was like an endless storm of stress, frustration, and fear: New transactions were piling up weekly, I was procrastinating on catch-up tasks to focus on new revenue for cash flow — and when finally making some time to catch up, I ended up being sidetracked by new complexities and nuances that required more research and ledger revisions.”
Clearly, John was having a very hard time getting his books in order for the upcoming tax deadline. The issue was, it wasn’t just one year of taxes he was filing; it was five years — gasp.
Like many business owners, John didn’t put in the time and effort required for ongoing bookkeeping or on-time tax filings. Understandably, he was busy with more important aspects of the business that needed his focus for his business to survive. Meanwhile, years of bookkeeping work piled up and many tax deadlines were missed. How does someone recover from lapses like these?
John sought help from the local priest, who so happened to be a lawyer and tax professional to learn what was required of him to clean up his mess. Luckily the holy water wasn’t needed on this occasion, but it did come down to going back through his bank statements, credit card statements, and invoices to put together the necessary information for complete and accurate books. He started slowly chipping away at it but realized that he needed to put in a substantial amount of hours to get the job done. At the time, it didn’t make sense for him to hire a bookkeeper, so he came to terms with his inevitable fate: he needed to hustle.
On a separate recording, John recorded this horrific entry “The final week was easily over 100 hours, basically did nothing but sleep, accounting, and a bit of time on my day job; took off a couple of workdays entirely and ran the other days as tight as possible to maximize bookkeeping time. I’d say it took me around 400 hours in total, once you add up all the bits and pieces.”
In the end, John was able to complete his bookkeeping cleanup, but not without serious sacrifices. His lessons learned were:
Complete your bookkeeping and reconciliations on a monthly basis.
File your taxes on time, but if necessary, make sure to file an extension.
Utilise software like Airbank from the start.
Run as many transactions as possible through your business bank accounts and cards.
Organise your incoming and outgoing invoices.
All of this sounds very basic, and it is! It’s one thing to understand this and another to actually put it into practice. I recommend setting aside time every week to work on it and avoid your own horror story.
That’s it for today. Tune back in tomorrow for Part 2 in our exclusive Halloween series — The Terrifying Tales of Small Businesses