|Posted on December 8, 2014 at 2:29 PM||comments (12)|
The Holidays are here and it's time to ensure that we have some cash tucked somewhere for the Holiday Shopping, Gifts, Christmas Parties, as well as Year-end Savings.
In our last Newsletter, we uncovered the myth of profits, and learnt that, understanding how transactions occur in our business and its effect on our financial statement is key to managing our profits. Please feel free to refer to our last newsletter for the full details. This Month, We will be looking at 5 strategies of turning our Profits into "Cash":
1 ) Cash is King:
Every company experiences an increase or decrease in Cash availability at any given period; the basic key to turning your profit into "Cash" is what you do, when you have made a Great Sale and received Payments from a Business Windfall. This should be the period to have a Savings or Cash reserve Account, whereby you can set aside a certain percentage of this revenue and discipline yourself, not to meddle with the account. This is called effective Cash Management, and it takes a lot of discipline, but if taken seriously, you will achieve great results.
2) Plug your Cash Leaks:
A lot of Business Owners are surprised about the waste, inefficiency and unchecked spending of precious Cash that should have remained in their Bank Account, if they have been managed effectively. As a Business Owner, it's possible to have been a culprit of any of these acts:
It's time to take a forensic trip down your Profit & Loss Statement and try to justify every expense line item, I assure ,you there will be a 5 % more profit ,just waiting to find its way to your bottom line.
3) Take Ownership of your Business Account:
A lot of Business owners tend to mingle their personal expenses with their Business Account. Once you indulge in this practice, your financial reports are contaminated and become pretty worthless, especially when it comes to decision making. It's better to take ownership of your Business Account and maintain it, as a separate "entity" from your personal account. This will help you manage your cash flow better, and hence you will able to pay yourself appropriately. After all, this is the reward of being a savvy business owner.
4) Avoid taking on too much Debt:
Too much debt sucks the financial life out of a company. In our last Newsletter, we learnt how Principal Loan payments occur on the Balance Sheet and are funded by your profit; Imagine what happens when your company is overburdened with debt, Chances are that you will use your Cash flow to continually offset the debts, and this causes your company to be cash starved.
The only way to eliminate debt is to put yourself and your company on a
"strict debt reduction diet".
If possible, Stop adding further debt to your company; otherwise have a strategy on how to pay off the debt, if you MUST take on further debts.
5) Have a Budget:
A Budget is a blue print of an estimation of revenues and expenses for a given period in the future. A Budget gives financial direction. A Budget keeps you on track and helps you to manage your cash flow. Preparing a Budget makes you disciplined and faithful to keeping your profits. This is the best time to prepare a Budget for your Business towards the upcoming year.
As we approach the New Year, Why don't you try out these practices and watch your Cash flow grow. You will be surprised at how a few dollars will add up in your Bank Account.
Do you need help with creating your Budget for the upcoming year? Are you experiencing problems with recognizing your expense line items and don't understand how your Cash flow operates? Why don't you give us a Call, We will be glad to help you out.
|Posted on February 1, 2013 at 2:13 AM||comments (25)|
Do you know that Inputting checks, managing bank accounts and creating reports doesn't have to be an intimidating process?
Wow,we have entered the second month of the year 2013, and I know that so far, it has been a great and fantastic season for us. For most people in the States,this is a period of tax preparation and filings, for both individuals andorganizations.
We should know by now, that having a good bookkeeping system is essential to having a successful and smooth tax filing season. I know from experience, that some small-business owners view bookkeeping as a burdensome task that takes them away from running their business. It makes others nervous, and they may second-guess their knowledge and skills in fear of the Internal Revenue Service knocking on their door.
I want to let you know that, you don’t have to be intimidated or bored by accounting or Bookkeeping. Successful business owners don’t view bookkeeping negatively. They have adopted a few basic procedures to stay on top of the paperwork. By doing so, they save time, money and a lot of stress.
I have listed below the basic steps to gain control of your business bookkeeping tasks:
1. Use accounting software such as QuickBooks: QuickBooks is a set of software solutions, designed to manage payroll, inventory, sales and other needs of a small business. Each package is developed according to different industries and their needs.
The great thing about QuickBooks is the fact that it combines a variety of accounting processes into one user-friendly system, and this is why it is highly recommended. You have to become at least generally familiar with theQuickBooks software, this includes basic knowledge like knowing how to input checks, enter vendors and customers, reconcile bank accounts, and create reports and other data. Once, you have this in place, you can choose one of these different ways to maintain it:
2. Scan your receipts, business cards and other important paperwork. Some software products import directly into QuickBooks. Utilizing this type of tool will help save time and paper, and help audit-proof your record.
3. Separate personal accounts from business accounts. Don’t mix the two.Keeping personal and business bank accounts and credit cards separate will make bookkeeping much easier and help maintain your corporate veil if you have a formal entity.
4. Avoid cash.Instead, use your debit or credit card religiously. When you use cash you lose track of potential write-offs. If you have to pull money out of an ATM, note on the receipt the purpose of the withdrawal.
5. Go paperless.Storing tax documents for at least six years can be a hassle. Another option is to purchase a small fireproof safe to store important personal documents(passport, life insurance, etc.) along with a regular backup of your bookkeepingsoftware and tax returns saved on a flash drive. For extra data protection,consider off-site physical storage or online data storage for these records and scanned files.
6. Auto-track your mileage. Keeping a written record of all your business, charitable and medical auto mileage can be a pain. Look into a satellite-assisted service, phone application, or software program.
7. Meet with your CPA at least twice annually. Review your business plans, financials, tax deposit amounts, payroll procedures and tax strategies.The cost of taxes is too high to leave your plans to chance. Just a few minutes on a regular basis can save thousands of dollars. Also, remember that your CPA should be bringing you strategies and ideas in these meetings. If the meeting consists of you throwing out ideas and your CPA shooting them down, you have the wrong CPA. Find a planner who is reaching out to you with ideas and strategies on a regular basis.
We are available to help you out with your QuickBooks Bookkeeping Services and training,and we also offer other accounting/Bookkeeping services at great rates too. Why don’t you give us a call today and see how we can save you and your business tons of money.
Email us for more details on [email protected] ,we would love to hear from you.
|Posted on January 16, 2013 at 12:00 AM||comments (15)|
Build up your Personal Balance Sheet
Do you know that everyone has a personal Balance Sheet? Just a reminder,A Balance Sheet is a financial "snapshot" of a Business at any given point in time.It shows your assets and liabilities and tells you your business networth.
It is a rule that every Businesss has a Balance Sheet,so also should every individual have a personal Balance Sheet,Our Personal Balance Sheet is defined as our ability to make a difference wherever we are,and this difference creates a value for our personal life. As we gain abilities,our personal Balance Sheet improves and ultimately helps us to reach our goals.
For instance,when we find ourselves in a situation,we ought to assess it and jump into it, to make something happen,whether we get credit or not;our Personal Balance Sheet goes up and will make us much more valuable,this indicates that whenever we approach any situation,we should rather consider it as an opportunity for personal growth,and watch our personal balance sheet improve.
Finally,as we build our personal abilities to make a difference,we will be rewarded,just as a business balance Sheet shows the value of a business.
My Dear Friends,this is the first month of a new year,it is not too late to go out and make a difference in the world and watch your personal value grow.You will greatly be rewarded for this.
|Posted on December 28, 2012 at 2:33 PM||comments (8)|
REVISIT YOUR GOALS: New Year’s resolutions are nice but what’s wrong with getting a jump start on them? If you are self-employed, take a look at the specifics of your business aspirations. If you work for someone else, revisit the objectives of your position and find places for improvement. Weed out outdated responsibilities and add in any new ones. Decide where you want to be in six months, a year and two years, then brainstorm specific ways to attain those goals.
While you are at it, look ahead in your calendar and pick a date every three months (or less) to go through this process. Having affairs in order makes everything in your work life more streamlined and easy to manage. Take the time to get a jumpstart on organization before the rush of the holiday season.
This coming year,2013,it will do you good to think about your how you want your life to be,set your own agenda and learn how to make your life better.
Think about what floats your boat, then take ACTION to make your dreams a reality.
My dear, you will be glad,you did.
HERES WISHING YOU A HAPPY NEW YEAR AND A PROSPEROUS 2013.