Small Business Accounting Tips
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Small Business Accounting Tips
Advice for taking better care of your money
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Why Outsourced Accounting Is Best For Small Businesses and the Economy

Businesses are generally very good at deciding which services to specialize in and which to outsource. However, finance and accounting support needs are often underestimated by small businesses and start-ups. With the exception of payroll which usually does get outsourced to one of the large firms that specialize, all other functions are either not fully performed or kept in-house at the mercy of unqualified staff.

 

Big businesses benefit from a full finance department with dedicated Directors, Controllers, Accountants and assistants for managing the accounting, bookkeeping and financial reporting. Small businesses could also benefit from having specialized departments of course, but often they don’t even hire a bookkeeper and the bookkeeping responsibilities get passed off as just another administrative duty for the “office manager”.

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Keeping your books in order will make tax time less taxing

As the close of the calendar year approaches, many small business owners will be scrambling to gather receipts, check stubs, bank statements and other financial data in preparation for tax time. For weeks, maybe months, these small business owners have been involved in running the day-to-day operations of the company and have not taken the necessary steps to record the day-to-day transactions. If you find yourself in this position year after year, you might want to consider the following advice.

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Small-business Q&A: Deal with risks early on

Q: I'm opening a new business but must go into debt to do it. Pretty scary! How can I protect myself?

 

A: Do your homework before you get started, which is another way of saying prepare a good business plan - and, the better the plan, the lower the risk.

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Passive Income for Every Entrepreneur

Passive Income for Every Entrepreneur | Small Business Accounting Tips | Scoop.it

Leverage is a powerful concept. It's the fundamental difference between being a freelancer and being an entrepreneur: being paid for your time vs. making money off the efforts of others or your own past efforts. Passive income is that concept carried to its logical conclusion: maximizing your income with a minimal amount of effort by yourself or your employees. Here are five ways passive income can be incorporated into your business strategy.

 

 

 

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Want Better Cash Flow? Look At The Balance Sheet

The top line on the Balance Sheet report is Net Income – now you see why the #1 thing you should do to improve cash flow is to improve net income (profits), because that is the ultimate source of cash flow. The cash flow statement then begins to reflect how balance sheet line items affect cash flow. So, let’s look at the balance sheet to make sure we are doing everything possible to manage assets and liabilities in the best way to have a positive impact on cash flow.

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Accounting Literacy Means Survival or Failure

There are three main functions or departments in every business. First and foremost is sales and marketing – nothing happens in business until something is sold. Second is the production and distribution department – getting your product or service to the customer. The third is accounting & finance – now we have to account for the money and make sure we can repeat this cycle over and over again while producing profits and cash flow. Unfortunately, the accounting & finance division is often an afterthought and usually the weakest link for many small businesses. Nonetheless it is critical function for any successful small business, and business owners need to have some level of accounting literacy to be successful.

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Payroll tax deadlock could hobble economy

Payroll tax deadlock could hobble economy | Small Business Accounting Tips | Scoop.it

If Congress fails to pass an extension of the payroll tax holiday, it would put a serious dent into economic growth in 2012 and could even help tip the U.S. back into a recession, according to economists.

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The #1 Thing You Should Do Today To Improve Cash Flow, Even During Tough Economic Times

The #1 Thing You Should Do Today To Improve Cash Flow, Even During Tough Economic Times | Small Business Accounting Tips | Scoop.it

The #1 thing you should do today to improve cash flow is work on improving profits. No joke. Especially in tough economic times every business has to focus more than ever on making sure the bottom line is not eroding. All cash flow management starts with profits. Notice I did not say revenues, but rather bottom line profit. Improving your long term cash flow is impossible without increasing profits in the long run. Cash flow management, forecasts and projections are necessary, but will only go so far if your profitability is falling. If cash flow is tight lately, start by analyzing profitability.

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New Entrepreneur: Get a Budget!

Many brand-new entrepreneurs learn quickly that they have to create a budget for their new companies. It can be a daunting experience for someone who doesn't have an accounting background or never maintained a personal budget.

 

Business owners who don't create a budget and stick to it are likely to find they don't know how much money is coming in, and how much is going out. If they keep trying to run the business that way, they're likely to run into trouble.

 

There is plenty of help for budget neophytes. If you're one of them, it's a good idea to give yourself a quick education about budgets, and to meet with an accountant or other financial adviser to learn about what items you need to have in your company's budget.

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How To Use Financial Reports To Run a Better Business – The Income Statement

The income statement is a document that reports on the flow of transactions your business has had over an entire accounting period, usually reported for a month, a quarter, or a year. The income statement is often referred to as a “profit and loss statement”, or simply “the P&L”. The income statement tells you the revenue the business has earned in the accounting period, the costs and expenses that were incurred by the business during the period and the net profit for the period – Revenues less direct costs less expenses equals net income or loss.

 

An in-depth knowledge of accounting is not necessary for you to use the income statement to help you keep your business on track.

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How to Use Financial Statements to Run a Better Business - The Cash Flow Statement

The Statement of Cash Flows is an important part of analyzing any business, providing the reader with insights into the practicality of the business to sustain itself with positive cash flow. The information presented in the statement of cash flows is not explicitly present in the balance sheet or the income statement, and but rather uses the balance sheet, income statement, and other selected transaction data to show the sources and uses of cash in your business. This is why the statement of cash flows is so important, it will help explain how your business acquires and uses cash, and answer the common entrepreneur’s question of “if the income statement is telling us we earned a profit, where the heck is all the cash?!” The statement of cash flows will shed some light on the subject, providing insights into sources and uses of cash that are not always obvious from the income statement or balance sheet.

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