accounting

Bookkeeping – Are you Stuck?

Bookkeeping – Are you Stuck?

Managing your own accounting incorrectly can hurt your business now and in the long-term. Bookkeeping is by far one of the most important aspects of starting and operating a successful company.  While it’s easy to get caught up in glamorous tasks like designing your website or choosing a logo, you will not survive without a solid understanding of the numbers. The streets of entrepreneurship are littered with former business owners who ignored the financials and discovered too late that they were operating at a loss, not a profit. Don’t just think about hiring a bookkeeper. Think about hiring a bookkeeper who will guide you so you can take your Profit First. For those of you stuck just thinking about the hiring aspect, you may want to pay attention to what Eileen P. Gunn from Entrepreneur has to say. “Entrepreneurs who hire accounting help usually discover they weren’t doing nearly as well on their own as they thought they were.”  Among other things, a great bookkeeper and Profit First Professional combo, will know when you should be setting money aside for the slow months. The subheading of Gunn’s article also hits the nail right on the head:  “When QuickBooks takes you Continue Reading »

Three Business Reports for more Control

Three Business Reports for more Control

A great business needs great financial organization. Why? Because those who “wing it” when dealing with things like revenue and expenses, eventually find themselves in a downward money spiral—that is really hard to get out of. Any serious landscaper or interior designer will tell you to properly measure the ratios of products you’re using, in order to get the most out of them. Otherwise, it’s just money down the drain. Know where your money is going, how often and why. For instance, when you have a clear understanding of your cost of goods for the month, you will be able to plan with greater ease the number of products needed for the following months. Then you will be able to see amounts of money spent and where best to apply it within the company. To get more control of your finances, maintain these 3 monthly reports. 1. Income report – Also known as the Profit and Loss Statement, shows a business its revenues vs. expenses within a monthly, quarterly or yearly timeline. The end result will be your net income or net loss (not to be confused with gross incomes or losses). Net income is company profit made after all business Continue Reading »

Startups with Financial Discipline will Thrive

Startups with Financial Discipline will Thrive

A room full of entrepreneurs will agree, that sometimes all it takes is a really good business idea, and everything else just falls into place. However, most of the time, the idea has to be worked and re-worked in order to turn into a well-calculated risk! Growing a business happens in stages. Like a sapling freshly planted in the ground, a new business requires a lot of attention before it is financially self-sufficient or stable. The story of the entrepreneur losing financial ground in its first or second year is a reality that may be construed as apathetic ownership or just plane ambivalence. The bottom line is, no one expects it to happen to them—and they shouldn’t… If they are keeping track of their finances correctly and exercising a great deal of financial discipline, even the toughest soil can produce a flower. Best practices for startup, after your launch: Do another solid review of your business plan. It’s important to look past the initial excitement of “lift-off”, with another hard look at your destination. When products and services sell, clients begin to notice your brand more, and as the onset of a larger bank account begins to occur, it’s easy to get Continue Reading »

Are you a Profit First beginner?

The great thing about using the Profit First method, is once you start it’s easy to continue. Even if you got interrupted in the process, or somehow got off course, you can always pick up right where you left off. Because Profit First isn’t consumed with complicated accounting jargon and instead focuses on the business owner’s money habits and attitudes, the concepts remain easy and always available to implement. While everybody has setbacks, the Profit First methods do require follow through if one is to fully benefit, however. Following up with our blog Become profitable in the simplest way (starting simply with profit first) we discussed how to easily begin managing money that addresses cash flow issues by opening two separate bank accounts—one bank account for saving money to pay taxes and the other to build profit. Now that you’ve gotten a feel for separating your profits and money for taxes, forge ahead by opening three more bank accounts for deeper money management! The next 3 bank accounts for Profit First enthusiasts will be: Owner’s Pay — savings account Owner’s Pay is for the owner’s salary or regular recurring distributions. To keep this balanced system growing in a healthy way, continue to keep Continue Reading »