An accounting system can be an extremely powerful tool for business owners. When well-structured , according to the specific needs of the business, it converts raw data into a format that actually tells a story about your business and can allow for insights that are essential to optimum decision making (the magic of debits and credits). The balance sheet is a snapshot at a specific date, while the profit and loss is more of a narrative. It provides feedback on how your business is doing and communicates what you need to do in the future. Some of the information that can be gleaned is discussed below:
Having a dynamic, regularly updated sales forecast can be essential to the success of a small business. By forecasting your sales revenue you are helping to control for its unpredictability, an inherent risk in any business venture, and prepare for the decisions that are essential to your business profitability. Whether your sales are increasing, decreasing or static , it is always better when decisions are made proactively rather than reactively.
Preparing a sales forecast can be as simple as you want it to be and does not necessarily require an accounting degree, particularly when your business is small (although an experienced accountant can certainly help refine and streamline the process). Below are some tips to help you prepare your sales forecast:
One of the more unpleasant aspects of being a business owner is having to chase clients that do not pay. It is simeltaneously frustrating, stressful and disheartening, while attempts to collect are an utterly unproductive use of time and can have a significant impact on cash flow, particularly if you are unprepared.
There are ways to mitigate the possibility and impact of bad debts. Some of these include:
- Performing a credit check on potential customers
- Charging a retainer, which is paid up front
- Offering discounts for early payments
- Allowing several payment options including credit cards which allows for immediate payments
- Following up on delinquent receivables dilligently.
Regardless of your efforts to prevent them, incurring bad debts is often inevitable and ultimately, a cost of doing business. Consequently, it is important to ensure that you are prepared.Read More
The search for accounting software can be a confusing and overwhelming process. A Google search for “small business accounting software” yields 6.75 million results. Trying to get recommendations from other business owners often results in passionate discussions about why a particular program is great while another one sucks. Your accountant might point you in the right direction, but will sometimes recommend a program that they are comfortable with using, but might be too technical and not necessarily be the best solution for you. With so many choices out there, it can be difficult to know what to do.
If you are seriously contemplating purchasing or replacing your accounting software you have undoubtedly heard of QuickBooks. Intuit (the corporate entity behind QuickBooks) has brilliantly extended their reach to the point where the large majority of small businesses use their program in one form or another. Some people love it, some tolerate it and some actively seek out alternatives. This article is meant to provide some insight on whether QuickBooks is the right choice for your small business:
As the income tax filing deadline for the year approaches small business owners and their accountants are starting to feel the pressure. Receipts need to located, invoices entered, bank statements reconciled. Accountants’ offices are littered with shoeboxes and accordion folders while tax return checklists and missing info lists are being compiled and checked off. Google is starting to note an increase in tax related searches as business owners and accountants search for clarity on a variety of tax regulations, deductions and deadlines .
In an effort to assist business owners understand their obligations, gain a better understanding of the tax filing process and provide some structure to the chaos, I have prepared a list of some essential facts and resources that should help make the process a little more manageable:
It seems that this picture is worth a lot more than a thousand words. Starbucks removes Starbucks from it's logo and makes it more minimalist thereby joining the ranks of Nike, Apple and McDonald (explainersunnecessary). This should allow them to change direction and pursue greater expansion opportunities.
If you've ever wondered about how to duplicate an invoice in Quickbooks either because it is similar to another invoice or you want to create a recurring invoice :
There are actually two ways to do this:
1. Select the invoice you want to duplicate and click on Edit on your menu (or right click) on the invoice and select "duplicate invoice". Voila - you have a duplicate invoice.
2. Same as above, but instead of duplicate invoice select "memorize" invoice. A dialog box will come up asking you (among other things) "how often" to which you can select the appropriate time period (in your case it would be annually). You can then choose to either remind you when the invoice comes due or QB can automatically enter the invoice.
(Answered on Quora)
Some great ideas for promoting your smalll business website. Free options include signing up for Google analytics, setting up a business blog (search engines tend to rank websites with blogs higher) as well as Twitter and Facebook accounts. Additionally, commenting on other blogs in your niche and answering questions on Yahoo answers and I would add on Quora and Business.com are other free and effective ways to improve your website exposure and establish yourself as an authority.
On January 1st, 2010, Revenue Quebec will be in increasing the QST rate to 8.5% (yay!), bring the effective rate of QST to 8.925% and total sales taxes (GST and QST) to 13.925%, since the QST is actually charged on the net price + GST. This will affect anyone who charges QST including small businesses and self employed individuals. More info on the rate increase can be found at Revenue Quebec QST Rate Increase page.
For those of you using Quickbooks you will need to update the QST being charged on both sales and purchases. The goal is to make a copy of the already existing QST on Sales and QST on purchases items, which will maintain the old rate. Once this is done the existing "items" should be updated with the new rate. This will automatically feed into and update the sales tax codes, so that you do not have to re-create them. Keep in mind that this should be done on January 1st, 2011 or first day back after the holidays, so that transactions prior to 2011 are not affected. The following are the steps required to make the change:
As the end of the year approaches, some of us find ourselves overwhelmed by top 10 lists, the shopping masses and endless renditions of Winter Wonderland. Businesses, on the other hand, tend to experience a slowdown, which makes it the perfect time for small business owners (when not partaking in holiday madness) to take a closer look at their overall business, financial and tax situation. A thorough review and analysis of your business will allow you to optimize your current financial situation as well as prepare for the future.Read More
One of the primary challenges facing a small business owner is uncertainty about the future. (It is also what makes entrepreneurship exciting). We may have an amazing product or service, but we can’t be sure whether this will actually translate into a profitable business model. A budget is an excellent tool to manage uncertainty and, contrary to popular belief, can actually be fairly straightforward to prepare, particularly for small businesses that do not have to worry about different departments, product lines and geographic areas .
A budget, very simply, is a tool that helps you predict your sales, expenses and profitability as well as your cash flow needs. It is based on estimates, which in turn are based on a combination of experience, history and industry knowledge. In terms of presentation, a budget should essentially mirror your financial statements and will include the following main categories:Read More
In a recent study by TD Bank Financial Group it was determined that one of the primary challenges facing small business was cash flow (The other two were managing clients and government red tape). This probably comes as no surprise to most small business owners, especially in the early stages. Of course, the simple answer to this problem would be a limitless source of cash. (Of course if we had unlimited funds, we may not find it necessary to endure the trial and tribulations of business ownership). Since this is usually not possible, we need to do the next best thing: analyze our cash flow requirements and find the most cost effective and easily available solution for any shortfalls. Even the most successful business can find itself shutting its doors if it is not able to manage it's cash flow needs.
Below are 4 financial metrics, which if monitored regularly, can actually help improve your business' cash flow:
As an accountant, I occasionally (literally) get shoeboxes of documents from my small business clients. Receipts are stuffed in and scrunched up and comprise everything from gas (good) to toilet paper (bad). As I contemplate the mind numbing exercise where I will have to sift through everything, identify missing information and worst of all, enter it all into an accounting software (usually Quickbooks), I often feel a sense of dread. I've often fantasized about a tool that could do it all for me (of course I could outsource, but since I only have a handful of these types of clients, it is not worth it, yet...). So, when I saw an ad for the Neatdesk scanner (shown ad nauseum on CNBC), I felt a little bit of glee as I perceived a potential solution to (at least part of ) the problem.Read More
When people hear the term accounting, there is an involuntary reaction whereby the comprehension centres (the medical term) of their brains tend to shut down, and sleep mode is activated. This is unfortunate, as accounting, especially to a small business owner, can actually be quite interesting. It is one of the primary tools by which business owners and other interested parties can gage the success of their business, as well as identify areas that require attention andneed improvement. To understand accounting, business owners need to have a basic understanding of how it works (debits and credits) and it's results (financial statements), explained below:Read More
When planning to start a new business, one of the first questions you ask yourself (and hopefully your accountant) is at what point are you going to start making money. One simple way to determine this is to calculate the breakeven point, which is the point at which your sales (revenues) equal your expenses.
How is it calculated?
- Top 20 Richest People of ALL Time
Includes some of the usual suspects - Warrent Buffett, Sam Walton, Rockefeller, Carnegie. The list also includes the founder of the first department store , a gold speculator and regent to Richard II.
- Dogs in the workplace increase productivity:
Researchers at Central Michigan University found that the presence of dogs in the workplace were likely to lead to colleagues being perceived more positively on measures of trust, intimacy etc. Also, their presence, made employees less likely to snitch. (The answer to world peace? Dogs!)
- Accountant arrested for scalping US Open tickets
Martin Scheffer, a long island accountant 339 tickets for the US Open in his possession when he was arrested. Perhaps this was not his first time: