Proper Accounting Program Will Fuel Your Business
Accounting in Small Business is Fuel that keeps everything running. You have heard the old joke that “as long as my wife has checks she thinks there is money in the bank”. I know we wish that was true, what a simpler life it would be. Another way to look at it is to imagine your gas gauge on your car was broken, I can guarantee that it would be only a matter of time before you run out of gas. Proper accounting practices keeps an eye on the cash flow (the gas) to keep your company running.
Recording expenditures and income properly and promptly will assure that you know what is needed as far as available cash to pay those bills and exactly how much money your business is taking in. That is the bare minimum requirement for accounting, and this will not provide the insight, the knowledge, nor the power to efficiently grow your business.
To get the mileage and maximum use from a car it is recommended that you do regular upkeep. Again at a minimum change the oil. Neglect and abuse of your vehicle have great consequences on it. Ignoring a sensor warning, squealing brakes, and other situations will lead to more breakdowns and will reduce the vehicle’s dependency.
The same is true for your business, if you don’t maintain the necessary upkeep and financial management you might as well steer your business to the junkyard. Your fear of additional expenditure is unwarranted. Having the right accounting service will save you money. That’s right, an expense that saves you money. It will also free you up to go out and get more business.
Important Accounting Tips
- Your accounting program should dive deep into your business. It’s simply not a bookkeeping job if you want to grow your business. There is so much more than making journal entries. There are many facets to the finances of the business. Meaning it’s not just income and expense, it’s how you develop income, business credit, analysis, receivables, margins, forecasts, etc…
- Your accounting program should lead to an active budget, whereas you can see what your expected expenses and income will be and be able to properly plan for them. This activity will also make you more aware of where you will be able to save money, and where you can properly spend it where it will have a direct effect on your business growth.
- Don’t Do It All Yourself! You opened a business because you have a specialty that you are good at. A painter is good at painting, an auto mechanic fixes cars, so whatever your specialty is, stick to doing that, that’s what brings in the business. Spending your time trying to do paperwork, and other back-office duties keeps you away from building your business and driving the cash flow. This is called outsourcing! Automating many processes can allow an easy flow of information where all procedures, analysis, and recordings will be done in a timely fashion. This leads to faster growth and more profits.
- One of the most important things to follow is never, ever, ever mix business with personal expenses. Forget about the accounting nightmare it may create, but it’s the liability it may create. The main reason you start an LLC, Corp., etc is to protect yourself personally from liability. If you start using business money for personal expenses it can be deemed in a court of law that you can become personally liable for any suites against you for utilizing the business for personal use. Each business is considered its own entity, so your personal financials are considered a separate entity as well. When you get your personal expenses involved the courts can say that you have opened the door to personal liability.
- Finally having a professional accounting partner will assure that you are ready for tax season, that your sales tax is paid on time, and that all other needed license fees are paid and up to date. They will also inform you of any new regulations that may affect you.
Keeping up with your receivables and payables keeps the cash flow coming in and builds confidence with your vendors, and you can better maintain your budget. Again, don’t try to do everything yourself, the time spent away from building sales will cost you more, outsource it! Remember “penny wise dollar foolish”.
Being a business owner means learning how to delegate. You are the boss and keeping your eye on the ball is important. Taking your attention away from driving business will hurt your business financially. Your focus on the development of the business will allow you to come up with new and effective ideas on how to take it to the next level.
Ebizmore Accountants and Advisors is the right partner for your business. At Ebizmore we do more, never worry about payroll, financials, receivables, payables, or anything else that would distract you from concentration on what you do best, growing your business. We even make business growth easy by analyzing the data and advising you on the proper path. We work to strengthen your relationship with vendors and negotiate better terms to drive profits. We simply say we do what it takes! Contact us at firstname.lastname@example.org.