Awhile back I wrote about three key financial statements that all businesses should be using. The folks over at TaxJar have written a more in-depth explanation of how to use those reports to make better business decisions.
When choosing a bank, there are four “bare bones” items things to consider.
According to SBA.gov, more than half of U.S. businesses are home-based. I own one of them, so I know both the benefits and the challenges of working from home. In the hopes that I can be helpful to other small business owners, here are some things I’ve learned over the years.
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If you’re tempted to switch to a cloud accounting application, but you’re afraid you’ll regret it, this article is for you. Let’s briefly review the advantages of a cloud accounting application.
Most cloud accounting applications offer free trials, as well as free tutorials and demos. If you’re even remotely considering the switch, I encourage you to investigate these further.
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In a small business, because cash flow can be a challenge at times, you (the owner) must be very cautious with your expenditures. But balancing quality against cost efficiency can be its own challenge.
Which part of your company can best help you identify cost savings? Your accounting department, of course. That department tracks all your expenses and, therefore, best understands where you can save money. In fact, the accounting department is key to keeping your financial operations on track. It has direct influence on the overall productivity of your company. Your awareness of these facts can, however, lead to overspending on bookkeeping and accounting functions, because the expenses seem to become a necessity.
There are ways to optimize the accounting processes and reduce costs, without degrading quality. Modern technologies and business practices allow you to reduce accounting expenses such as hardware and software, facilities, and manpower, while achieving the same level of quality. These technologies and practices allow you to easily outsource outsource your bookkeeping and accounting functions. Secure cloud accounting applications significantly reduce your hardware and software expenses. Such applications also give you real-time access to updated financial records, from any internet-connected device. (More on cloud accounting applications in my next blog post.) Other applications such as Hubdoc.com, Bill.com, and Teamwork Projects streamline the handling of receipts and other important documents, bill payment, and financial project task management.
These technologies allow you to hire virtual bookkeeping and accounting staff on a contract basis, greatly reducing your expenditures on both manpower and office space, without sacrificing speed, convenience, or quality in your company’s accounting functions. To ensure your quality standards are met or exceeded, seek out qualified, experienced financial professionals who are certified in the application(s) of your choice, and who have verifiable references. It’s also important to take into account any language barriers and differences in time zones, especially if you want your virtual staff to be available via IM during your office hours.
Schedule a free consultation with me today and learn how easy it is to work with a virtual bookkeeper.
Did you know there’s a way to receive your mail without having it actually come to your business (or home)? It’s called virtual mail, and the service is popular with small business owners and RV owners, among others. I use it for my business, and my husband and I use for our personal mail. It cuts down dramatically on junk mail, and converts all our “real” mail to PDF. That makes it easy to digitally file important mail items. A Google search reveals a comprehensive list of companies who provide the service. The two largest ones are Virtual Post Mail and Traveling Mailbox.
Here’s how virtual mail works.
Virtual mail companies typically take stringent security measures to ensure their employees don’t steal vital personal information; these measures are different with each company. If the company’s website doesn’t explain those security measures, I encourage you to contact them and ask. It’s probably wise, however, not to have things sent there that contain bank account numbers, debit/credit card account numbers, etc. And if you do have them sent to your virtual mail company, request that they be forwarded to you rather than opened and scanned.
The larger virtual mail companies have locations in multiple states, and can therefore provide you a mailing address near where you live. In addition to virtual mail services, each company offers different add-on services, so it’s important to evaluate each one carefully in order to find the best combination of price and services you need.
Back in 2007 I took on a sign company client. It was a small business owned by a retired engineer who had bought the business from a relative, having never owned or run a business of any kind before. The books were several months behind–especially accounts payable. There were stacks of invoices and bills that were not filed or organized in any particular order. Even after I entered them into QuickBooks Desktop for payment, the owner refused to let me or anyone in the office setup any kind of filing system for them, and would not explain why. Because I was doing the books, it quickly became evident to me that the business had serious cash flow problems. The bank account balances were barely enough to cover payroll each week. Furthermore, even after entering all those bills and invoices into QuickBooks, few of them were paid, and most were seriously past due.
At the end of each week I sent the owner updates on what I had completed in relation to the bookkeeping and what information I needed from the owner in order to complete other bookkeeping tasks. All my emails were ignored. (I should note here that the owner was almost never in the office when I went there to work on the books.) After a few months I terminated the relationship. I could not properly do my job if the owner was not going to communicate with me. There is only so much a bookkeeper can do without that communication. Just a short time later, the company went belly up.
It is so important for business owners to know where they stand financially. In order to know this, they must be responsive to bookkeeper and/or accountant requests. They must have a filing system (digital or physical) for all types of documents including invoices, and to understand that bills must be paid on time. And they must keep the books updated so they can effectively make both routine and emergency business decisions.
Even more important, a business owner must be willing to accept when a business is no longer viable and take appropriate action.
Avoiding and Surviving Audits”
Common Mistakes Small Businesses Make”
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