- Business and Employment
Bookkeeping For Small Business
Three Ways to Guarantee Small Business Success
Are you self-employed, working hard, but not getting ahead? Afraid you're paying too much in tax? Feel your business is out of control because you don't have the money skills you need? Here are three easy steps to take back control and make your business succeed.
If you worry about money, you are not alone. Many small business owners, self-employed, and entrepreneurs feel your pain. Money, taxes, and planning are trouble spots for any company, but they're especially important to those who own their own businesses. But you can find relief by taking action today with three essential changes.
Where does the money go?
Understanding small business cash flow
Have you lost control of the money side of your business? Do you work like a dog but have only peanuts to show for it? Do you have any clue where your money goes?
The right record keeping system can make or break your business success. The flow of money is crucial to every aspect of running your business. Knowing how and when cash flows into your coffers is just as important as knowing when the bills are due. Not only do you need cash coming in to cover the bills, you can't grow your business without investing more cash.
If you're running your business through your personal bank account, you're making your job a lot harder. And if you aren't keeping receipts, invoices, billing records, and reviewing financial reports often, your business truly is out of your control.
Here's the easy way to get a grip on your cash and start managing your business finances today. Set up a bookkeeping system and stick to it. There are online solutions and desktop software that are as simple to use as your checkbook. If you don't have the time or hate numbers, hire a bookkeeper.
Save every piece of paper that relates to your business, and get that information entered into your company's records. Then review a cash flow report every week to see where your money is going. Look for expenses that can be reduced or eliminated. And check to see that you're being paid within 30-45 days. If not, find out why. This simple step alone can take a failing business to profitability in a very short time.
Let Your Voice Be Heard
There are some opinion polls and a 2-question survey on this page. Thanks for taking a minute to answer them all.
Confident in your business records?
Add a comment if you like.
How confident are you that your business records are accurate?
Bestselling Books for Small Business Owners
Here are the best of the bestsellers if you're a small business owner who wants to spend less time managing your money woes and more time growing your business.
Learn how to maximize deductions that the IRS considers legitimate.
A novel approach to managing your business finances.
Comprehensive advice on setting up & managing your business to save on taxes.
Practical guide to manage your finances & run your business successfully.
Sure you're not paying too much tax?
Got something to say about taxes? Leave a comment!
How confident are you that you're paying no more taxes than necessary?
Are you paying too much tax?
Did you know that small businesses get all the breaks?
Are you afraid you're paying more tax than you should? How do you know? Have you stuck your head in the sand, hoping when tax time rolls around that your accountant can work miracles?
Why leave it to chance? As a smart business owner, especially someone who's self-employed, you need to have a firm grip on reducing taxable income on a daily basis. By ignoring the reality of taxes, you could be jeopardizing the future of your business.
Here's the simple solution to tax planning: good record keeping. In the same way that you need to understand how cash flows in your business, you need to keep tabs on taxable income. And you're in luck, because small business owners have the most favorable tax deductions of any group.
Every legitimate business expense has the potential to reduce your taxes. But if you're not recording your income and expenses, you're running around blind. Until, of course, you hand over a shoebox full of disorganized litter to your accountant, hoping he or she will take the time to sort it all out in your favor.
Are you willing to put the future of your business in the hands of someone who has too much to do in a very short period of time? Instead of giving it away, take control now. Set up a bookkeeping system and discover the deductions you may be missing. Your accountant is in a much better position to help if you can provide good reports. You'll save time and money preparing your tax return, too.
The biggest benefit from good bookkeeping is knowing that you're taking advantage of every deduction and aren't paying more taxes than is absolutely necessary. Get that monkey off your back and spend more time building your business.
How do you prepare your tax return?
Add a comment if you like.
Do it yourself or use an expert?
What's your plan for the future?
Create a roadmap to success
When you started your business, did you have a plan? Maybe a dream of what you wanted to achieve? Did you write down the steps it would take? Did you have any idea what it would cost?
Lack of planning is one of the major causes of business failures. As many wise men have said, you can't reach a goal you haven't set. So how can you expect to be a success if you don't know how to get there? Especially in the current economy, creating a financial plan for your business is absolutely essential.
What you need is a budget. Don't worry! Budgeting isn't as difficult as you may think. Basically, you need to list out all the sources of income and all the categories of expenses that you know you'll need to start or run your business. This includes everyday costs like telephone and copy paper - and the big purchases like computers and equipment.
Any decent bookkeeping system, online or desktop, can help you set up a budget. If you're already in business, once you've entered three months worth of income and expenses into the program, you have a good idea what it takes to run your business. Just project those three months out over a year, then add things you pay quarterly or once a year.
You may be surprised when you look at your business from the perspective of an entire year. You'll see patterns where you need more cash coming in to cover a large expense. You may even find that you have more available cash than you thought.
Once you see how your business finances change over time, you'll be in a better position to plan ahead. Your budget gives you a ruler to measure how well you're meeting your goals. And you know that having a plan is one of the best ways to guarantee your business will succeed.
Would financial planning help your small business?
Feel free to add your own answer and/or leave a comment if you like.
What's your experience with budgeting & planning?
Use it or Lose it!
The bottom line
Attention to these three areas - cash flow, taxes, and budgeting - is absolutely essential if you want your business to succeed. By simply setting up and maintaining a good bookkeeping system, you can take control over all three aspects of money management. Plus, you may find that organizing your finances has other benefits - less stress, better focus, and more time to put your energy where it's needed the most - growing your now successful business.
Do it today! Tomorrow you'll be glad you did.
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