4 Ways Good Accounting Can Improve Your Mental Health as an Entrepreneur

Accounting is often the least enjoyable part of running a business for many entrepreneurs. Many people who choose to be entrepreneurs are bent on creating a difference in the world by creating something revolutionary or by scratching their own itch and creating solutions to a problem they face on a daily basis. Because accounting can be the least enjoyable part, sometimes it gets the least amount of attention and that can often cause business owners and operators to struggle in taking their business to the levels they want to…

Let’s look at 4 reasons why good accounting can help improve your mental health as an entrepreneur and in turn help you make a bigger difference with your business. Here are 4 reasons why good accounting can help you with your mental health:

  1. Allow You More Time To Spend On Your Business
  2. You Know Your Numbers
  3. Understand Growth Potential 
  4. Worry Less Around Tax Time

Understanding how accounting can help your mental health, decision making and ability to make a bigger difference with your business is crucial. Let’s take a deeper dive into these 4 reasons why…

1. Allow You More Time To Spend On Your Business

Oftentimes, accounting practices aren’t systematized or seamlessly executed in small businesses. Since making customers happy is often our number one priority, it can take a majority of our time and energy until we realized we’ve put administrative work off. Hopefully, you have an employee, a spouse, or an outside accounting solution that takes care of your business accounting. Sometimes though, if it’s an employee or spouse, they also might have other roles in the business… Or maybe you’re like one of our many clients who struggles to delegate financially related aspects of the business to others? In which case, you probably spend all day working on serving customers and making them happy and then all evening or weekends doing administrative work. 

This can lead to a pattern of overworking and lead us to spend less time with our families and friends than we should. When things like this happen, we can often get overwhelmed and watch our mental health slowly slip away. Overworking is one of the fastest ways to ensure we’re unhappy and unhealthy. This is why good accounting practices can help us avoid overworking and help us maintain healthy mental and emotional states. If we’re able to ensure that our business finances are tracked in an easy and seamless way, we often can avoid those late nights or weekend work and also be more willing to delegate our accounting responsibilities to others. If we’re able to delegate or track our finances in an easier way, we can spend more time serving our clients and working on our business.

Taking the time to organize your business’s financial health can be vital to ensuring you have mental health for other reasons as well, like knowing your numbers.

2. Know Your Numbers

By knowing your numbers, you can allow yourself to make informed decisions in your business. Entrepreneurship generally involves many risks, which can be scary and lead to your brain’s energy being consumed by unproductive thoughts. When you’re scared or living with anxiety, there’s an area in your brain called the amygdala that’s activated. When the amygdala is activated for long periods of time can lead you as a business owner to be more reactive, aggressive, and angry. Which not only can affect your own mental health but that of your employees and the ones you love, like your family. 

When you know your numbers, your can live with less stress, fear, and uncertainty in your business. You can make decisions with confidence because your numbers will show you exactly how much money you have to spend each month, where it’s going and how to create more revenue. It allows you to take risks on different marketing strategies in order to test what works and what doesn’t… And it helps you understand how your business is growing, which can help lead to a sense of pride and self-worth. 

Knowing your numbers can also help you understand your growth potential and most entrepreneurs want to grow their business, so let’s look at that now.

3. Understand Growth Potential

Understanding your growth potential helps us as entrepreneurs be hopeful and even more motivated to continue pursuing the endeavors that we’ve chosen. When we see that our business isn’t doomed to the continuing cycle that we’re on… When we see that our business has the potential to grow, it can help us feel a large amount of purpose and relief. 

Seeing your numbers and margins will allow you to see the places where you can make changes to your business or where you have room to grow. Maybe you have one particular service that has large margins and a predictable marketing and sales cycle? Why wouldn’t you double or triple down on pursuing more business from those services or products and limit your marketing spend on the products and services that are less profitable or predictable? Well you can only do this if you know your numbers and have a perspective of your business that allows you to understand your growth potential…

Lastly, it can help you worry less around tax time.

4. Worry Less Around Tax Time

Tax time can be a stressful time for many business owners… Trying to round up all last years numbers is insanely stressful if we’re doing it retroactively. When you have good accounting practices, you can count on approaching tax time with confidence and less stress. By knowing that you have your accounting in order in January, April 15th doesn’t have to be a looming deadline… It can be just another deadline in your business and it can allow your CPA to do the best job they can. 

Tax time is stressful and can add another element of stress to you and your business. Why not be prepared and less irritable around your friends and family by ensuring that it’s taken care of in real-time? 

In conclusion, accounting is a tool for growing your business and helping you take care of your mental health… Implementing good accounting practices will be a great way to help your business grow and maintain your mental health in the process. Consider how to do this and how much these 4 factors will help you sleep better at night, serve your customers better, treat your employees better, and have faith in your growing business.