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What do you expect your Profit to be this Year?

Posted on October 7, 2014 at 1:17 AM Comments comments (7)


  Profitability is a key driver of financial success in business. The goal of every Business owner should be to make profit and improve their business to make it better.

  If you were having a discussion, one year from today, and looking over your financials, Will you be happy with your financial progress? This question should propel you to take action, about what you expect your profit to be for the year.

  Profit is like a car,that must be driven; it does not drive itself; for you to get a projected profit, you have to be on top of your profit expectations. I have listed some questions, which should stimulate you to focus on an expected profit, as the year is coming to an end:
  • What do you expect your profit (taxable income) to be for this year?
  • Is this level of profitability above-average for your industry?
  • What percent of revenues does your profit represent?
  • Is your expected profit up or down from last year?
  • How much of your profit will be converted into cash this year?
 
  As you go through these questions, you're painting a picture of what your financial success should look like, and this will lead you to action, for an end result. Having a picture requires taking action to actualize your projected expectations. These steps below will help you achieve your financial profit picture, feel free to put them into practice and see the transformation, it brings to your business:

  1)  Have a Target Goal: You need to have a financial goal for your business at the beginning of every year. The Goal can be broken into monthly, quarterly and semi-annual financial targets. It is advisable and easier to have a monthly target.

 2) Monitor your Progress: Once you set your financial goals, you will need to monitor your progress, against your target every month. You can only monitor your progress by examining your monthly financial reports (Profit & Loss/ Balance Sheet Reports). If you have not been preparing your report, this should be a good time to start.

3)  Adjust: At the end of every month, you need to review your target goal against your actual results (financial reports), and decide if you need to make changes, in your business, to achieve your targets. The changes can be in form of reducing an expense category to putting a plan in place for faster accounts receivables process.

 This is the secret to creating your financial success for your business. I challenge you to put these into action and watch your business achieve your desired projected profit.

 Do you need help with interpreting your financial reports? Perhaps you are yet to prepare your financial reports for the year, and don't have an idea of your actual profit; Call us NOW for further consultation and Assistance.

 We will be glad to help you.
 










Tips for Managing Your Business Cash Flow.

Posted on August 5, 2014 at 2:49 AM Comments comments (26)

 It's already the eighth month of the Year, We are gradually getting to the end of the year, and soon it will be time for Year End Reports. In our last Newsletter, We discussed the concept of Cash Flow and how it affects our Business Operations; this month, we will be looking at tips to manage our Business Cash Flow.

  Being in Business for yourself is like being an Air traffic controller, especially in the area of cash flow management ; You can imagine trying to control 100 Airplanes landing simultaneously on two runways; this can be an upheaval task, but we regularly see clients line up their monthly bills, their projected income, business projects and business expenses and try to combine all these activities, at the same time, trying to ensure a steady cash flow into the business; you can imagine, the projected outcome, if all these activities are not properly coordinated.

  Cash Flow is the heartbeat of every Business, and if a Business does not have the cash on hand to pay their vendors, they will definitely run into problems. The main Cash Flow Problem, that Business Owners face is as a result of Lack of Creative Cash Management. Below are some Tips to overcome the Ups and Downs of Cash Flow Problems in your Businesses:

1) Always Schedule All Payments: Most Business Owners line up their monthly bills, compile them, sit down and issue all the checks and set up Bill Payments at once; but the trick is to have a " Holding Pattern". It is advisable to schedule each payment, in order to get to your vendors in a timely landing, without affecting other Cash Flow activities. 
  Every Business has Three (3) tiers of Checks Disbursements Groupings:        
a) Must Pay Group- These are payments that can hurt you, either in cost or ability to operate your business, if they are not paid. These include items like Taxes, Rents, Payroll and Service Charges.
b) Important to Pay Group - These are payments, that have a reasonable grace period, and if not paid, a financial penalty can be incurred, as a result of Nonpayment. These include Utility Bills , Credit Card Payments and Insurance Payments .
c) Flexible Payment Plan Group - Suppliers, Vendors and Wholesalers, that supply most Small Businesses are the best sources of flexible credit financing. Most of them will continue to work with you, if you arrange a regular payment plan with them.

  • Tip #1: Try to schedule Payment Dates, into the Three (3) tiers of Checks Disbursements groupings and issue check/Bill payments accordingly.

2)  Make Payments on your Revenue, not on uncollected Sales : I am sure, that none of us will want to land a plane, hoping that the runway is beneath us in the fog bank, as also Business owners, it is not advisable to make projected payments on uncollected revenue. You may wander, what happens to Credit Facilities, Guess What, Most Credit Facilities still have a timeline for payment.

  • Tip #2: Always prepare your Cash Flow Statement and financial reports, and review them periodically, to have a full knowledge of your Cash Flow.

3)  Do not use Payroll Taxes to float your Business Operations: Studies have shown that most Business Owners use the Tax liabilities, collected during payroll, to float their businesses, rather than remitting the payments to the appropriate Tax Authorities. They don't realize that they spend more in potential penalties, fees , interests, time and aggravation, if they engage in this act. Tax Liabilities grow, if they are not remitted at the appropriate timing.

  •  Tip #3: Try to discipline yourself to deposit the payroll tax money collected, into a Separate Bank Account, until you are ready to remit the payments.

4)  Establish Relationships with your Credit Provider: It is very important for every business owner to plan for a rainy day. Having a great relationship with a vendor, that gives you a credit facility, avoids cash flow storms, which might bring in a sense of desperation or lack of control. 

  • Tip #4: If you work with a quality company, that provides working capital or credit facility, stick with them and build a relationship, once they know your credit worthiness, they will be there to help you quickly, in times of need.

 5)  Invest in a Good Bookkeeping/ Accounting Service: It is important for Business Owners to have a grasp of their cash flow and understand the effect on their business growth. A Good Bookkeeping service is invaluable to your business, particularly in preparing your monthly financial reports and cash flow statements, which will help you, see how your Business is doing as well as maintaining your Business Cash flow. 

  •  Tip #5: Rather than worry about how to prepare your company financials and your cash Flow Statements, as well as trying to figure out, the amount of Payroll taxes to pay; let the professionals handle it.

  Understanding and Managing Cash flow has been a challenge for many Business owners, but with the application of these tips, it is possible to grow your Business to a greater level , and also have enough funds for other activities, that will bring more revenue into your Business. 
 
  Please feel free to contact us on 202-422-4586, if you will need further help on how to manage your Business Cash flow and financial Reports. We will love to help you. Remember: The best time to take control of your Cash Flow is RIGHT NOW.

Assessing your Company's Financial Health.

Posted on October 1, 2013 at 3:20 AM Comments comments (12)
                       
   Recently, A Client of ours requested to know the health of his company and was of the opinion that the total income, that his company made was enough to prove that his company was healthy. We had to explain to him, that the company's total income was not enough to show the financial health of his company. We realize that a lot of business owners always make this wrong assumption. We hope that by the time, you finish reading this article, you will have a better understanding of how to assess your business/organization's financial health position.
 
   It is important to note that, to assess your company's financial health, you will need more information than your Gross Income, to see how well your business/organization is doing. There are three important financial information, that you will need and these will also help you in making your Business decisions. They are:
 
  • Balance Sheet-A Balance Sheet provides an instant picture of an organization's financial situation at a particular point in time. It shows an organization's assets(what it owns),liabilities(what it owes) and net worth(the difference between the two).It also provides a breakdown of current assets and fixed assets, as well as current liabilities and fixed liabilities. The Balance sheet also shows how much equity(ownership interest),that you have in the Business.
 
  • Profit & Loss Statement - A Profit & Loss Statement shows all actual income and expenses incurred for a particular period of time, such as a month, quarter or year. This statement reports the most important numbers of the organization, like the Company's Gross Profit, total expenses and Net Income, through which Business owners can determine, if their business is making a profit or loss.
 
  • Cash Flow Statement - This Statement shows how much actual cash enters and leaves your company's accounts for a time period,including all operating activities, investing activities and financing activities. Incoming Cash appears in different categories, such as Sales, Cash from Vendors, interest received, Owner contributions, any borrowed money or miscellaneous sources. The categories for outgoing cash are Payroll, inventory, operating expenses, equipments, capital expenditures, debts and distributions to owners.
 
    It is important to note that by combining these three statements, you will be able to assess the financial health of your company at any given time. Please note that you NEED to have a GOOD BOOKKEEPING SYSTEM in place, because this is the only way that your statements can be accurate, and with this, you will be able to make accurate business decisions.
 
  If you need help with assessing the financial health of your business/organization's and also  preparing any of the statements listed above, We are available to help you out. GIVE US A CALL TODAY ON 202-422-4586,and see how we can assist you. We will also give you suggestions, that will enhance your business and help your company grow.
 
   Please also feel free to fill out our contact form, so that we can get in touch with you and respond to your questions. We will love to help you.
 
    
    
 
               
 
       
 

How do you value your Finances?

Posted on June 19, 2013 at 2:07 AM Comments comments (2)
 
Recently, I was discussing with a friend, who was competing with her sister in selling their hand made beads. The conversation was about raising her prices from ten cents to twenty five cents per bead. I asked her what she needed to achieve from the increase and what areas of her life, that she feels the increase will make an impact, hence asking her the five most important things that matters to her in life.
 
She thought about it, looked at me and said in this order: “First, My Family, then My House, Television, Candy and then Money”. Impressed that she had come up with exactly five items, I probed a little deeper.
 
“Mary, what do you need to get the candy that you love?’
 
“Money”, she said.
 
“And how about the TV, what do you need to get that?”
 
“Money”
 
“And how about your house?”
 
“Money”, she replied once again.
 
 And then I asked, “How about your family, what do you need to get them?”
 
Just as quickly, she replied, “Love”
 
“That’s right, “I said, but don’t you think that maybe you have to reorder your list? You see, if you need money to buy the candy, the house and the TV, then don’t you think money should be more important than what it can buy?
 
In that instance, she thought about it and said, I was right, and within that short period, I introduced her to the law of money, a law that serves as the foundation for wise spending.
 
THE LAW OF MONEY: PEOPLE FIRST.THEN MONEY.THEN THINGS
 
You see, most of us are just like Mary, we value things more than we value money. We care more about having what money can buy than we care about having money itself. When we follow the law of money, we will find out that, we are respectful of money, and if we follow it and keep what we have and spend, it will make us truly rich. We will analyze each category:
 
  •      PEOPLE FIRST: We should always prioritize everything that is created by love, which include our Family, Friends, Partners, Children and Ourselves. The saying that goes that Money can’t buy love is true, and a life without love –regardless of how much money one has-is a poor life indeed.
 
  •       THEN MONEY: Can you imagine going to someone’s  house and having them proudly show you a room filled with thousands of dollar bills and telling you the history of how all that money came to be? You will be amazed at all that vulgarity, but at the same time, you will think nothing of it, when you compare it to another person's home that is filled with beautiful decorations, What did it take to decorate the home? Money. Money exchanged for furniture, paintings, carpeting, lamps and so on.
 
The difference in your perception is the VALUE SYSTEM that you applied- A Room filled with things is okay, whereas a room full of money is not.
 
 
  •        THEN THINGS: When your financial priorities are in order; things come last.
 
     In conclusion, when we work hard for our money, maybe forty hours or more a week and then go shopping, buy food, clothes and stuff, we usually say that we don’t know where the money went. This is also applicable, when we pay for services, that we really need; but why don't you consider this- CHANGE your perspective now, if we valued money over things and over items it can buy, then we would know exactly where our finance is going.
 
We should change our money/thing ratio, so that we will have more money than things, this will also encourage us to take great pleasure in seeing our money and watching it grow. With this approach, we would always know when we can afford something that we need and will be more likely to be able to buy the things we TRULY WANT to make us happy.
 
So next time, you go out to spend money, always remember that you are not throwing the money away, but you are exchanging it for something that has a value to you.
 
Please feel free to give us a call today to get your finances organized, so that you can capture where your expenses are going and invariably increase the value you need for the important areas in your life.

Why Use Quick Books Accounting Software?

Posted on May 8, 2013 at 2:30 AM Comments comments (21)
  
It is important for every business owner to have an effective accounting system in place, so that they can increase their efficiency and manage their finances effectively. When a client comes to us in need of Bookkeeping /Accounting Services, it is noticed that most of the time,many of the business owners do not have an accounting system in place and this puts their businesses and finance in a great mess.
 
An  accounting System is the basis of a good business and goes a long way, in showing how the business can handle its profits,manage its expenses, handle its payroll and invariably increase its net worth. We always advise our clients, to get QuickBooks, to handle their accounting/bookkeeping records.
 
QuickBooks is a set of accounting software solution that is designed to manage payroll, inventory, sales,purchases, invoices, receipts and other needs of a small business. It is usually tailored to meet the needs of every different industries and business types. We always encourage our Clients to use Quick Books and if they cannot afford it; we can set up their company QuickBooks file on our system, and prepare their reports and send in electronic files to them, to view, their company financial position.
 
We will go ahead to list a few reasons,why you should use QuickBooks for your Business Accounting Software:
 
  • QuickBooks can be customized to work, whichever way, you desire. It is specifically designed to be flexible and adaptable to a wide range of businesses. In addition,Quick Books have customized accounting packages for all industry typesincluding the ones for Contractors, Retailers, Health Care Professionals, Non-Profit Organizations, Real Estate Industries and several others.
 
               We also advise our clients on the suitable type of QuickBooks to use for their business and invariably help them in setting up the Software,to suit their Business type.
 
  •   QuickBooks has been proven to be stable, reliable and consistent with using the best accounting practices, to produce financial statements, which most companies use to make business decisions that will move their companies forward. With Quick Books,you can make forecasts and budget projections, which are necessary tools if you want to move your business forward. You can contact us for more details regarding these business tools, and how to use it to work for your Business.
 
 
  •         You can grow your business with QuickBooks. QuickBooks will help you design a business plan to use while trying to secure a small business loan or line of credit, and also planning for the future. This software can create a projected Balance Sheet,Profit & Loss Statement and statement of cash flows in the formatrecommended by the U.S. Small Business Administration.
 
 
  •      The Use of QuickBooks can save you time on Bookkeeping and paperwork, because many of the simple Bookkeeping tasks are handled automatically in QuickBooks, thereby making it easier to run your business effortlessly. We have seen clients that tried doing their Bookkeeping on Microsoft Excel, and gone through so many headaches,to clear or balance an account item,after spending long hours without any solution; With QuickBooks, you do not have to exert as much effort and you are sure of getting immediate results and a reconciled account, which shows up immediately.
 
 
  •     You can create your Company Invoices with QuickBooks, as well as your receipts, and send them via email to your customers, rather than using a Microsoft template,that you always have to edit, which may lead to several errors and repetitions.With QuickBooks, once you create an invoice, it is synchronized with your accounting system.
 
  •       QuickBooks enables you to view your Accounts Payable(Vendors) and your Accounts Receivables (customers) without stress, and this will give you a clearer picture of how to handle your vendors and customers effectively.
 
  •        With QuickBooks, you can easily generate reports you need information on, so that you will always know where your business stands. As a business owner, you need to know whether you are making money or not, or whether your business is healthy or profitable. If you need to know further on how to use QuickBooks to perform this function, we are always available to train you, and show you the multiple ways, that you can generate over 100 reports on QuickBooks, which will invariably move your business forward.
 
 
  •       Every Business owner wants to get paid for their services and will also need a faster means of payments to improve the company cash flow; With QuickBooks Online Payments,you can e-mail an invoice or statement, through which your customer can easily pay you with a credit card or bank account transfer. This is really a great feature,because you do not have to wait for the check in the mail anymore.
 
  •      QuickBooks encourages paying your bills online, by setting up your current bank account on QuickBooks; you are ready to pay your bills without licking any envelopes or printing paper checks. You can even pay anyone from your credit card companies to your pizza service. In addition, the Online Banking feature lets you download your monthly statement from your participating bank directly into QuickBooks for easier reconciliation.
 
  •     Do you know that you can set up your liability accounts like Loans, Notes Payables,Credit Cards and Line of Credits on QuickBooks? Once this is done, you will be able to know your monthly balances, and see your principal and interest payments every month; doing this takes off so much stress than having to wait for the statements from your Bank ,or paying the extra charges, that will be required,in the event that you loose any of the statements.
 
  •        Payroll can be done via QuickBooks, this saves our client a lot of stress and money, because it will eliminate your dependence on payroll companies to prepare your payroll; and you get to see the number of hours, that your employees have worked in total for each pay period, in addition to the net amount that they are due,after tax liabilities. You are also in control of your Company Tax liabilities and payments.
 
 These are just a few of the reasons for using QuickBooks Accounting Software for your Bookkeeping services; we have found out that most business owners always underutilize a lot of the QuickBooks features, either because of ignorance or lack of training.
 
You can always contact us to train you on how to best utilize your QuickBooks Software.We offer various QuickBooks services at very affordable rates. Our  QuickBooks Services include:
 
-         QuickBooks Setup
 
-         QuickBooks Personalized & Group Training
 
-         QuickBooks Supervision/Review
 
-         QuickBooks Support
 
-         QuickBooks Tune Up
 
-         QuickBooks Cleanup
 
-         And many more
 
          It is always important to make the best use of your QuickBooks software in order to get the best financial reports for your business. Using QuickBooks Accounting Software is a smart and affordable way to get a handle on your books. Accurate records enhance educated decisions for your business and will save you money.
 
WHY DON’T YOU CALL US TODAY ON 202-422-4586 to schedule an appointment; so that we can show you the best way to use your QuickBooks Software, and if you do not have one, DON’T WORRY, We can always purchase one for you or set up your QuickBooks Company file on our system and send you regular reports, so that you can manage your business effectively and make great business decisions.
 
Please also feel free to fill out our contact form, so that we can get in touch with you to respond to your needs. We will love to help you.
 

Bookkeeping Tips to Save Time and Money.

Posted on February 1, 2013 at 2:13 AM Comments 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:
 
  • Do it yourself: You can take a class on the software or alternatively, CALL ON US for a one on one training at a great rate; We can also help you to set up your QuickBooks Chart of Accounts; once this is done, you can dedicate time each week to input information and reconcile bank statements. Please note that if you fall behind on inputting transactions, it can be difficult to catch up. This is when most people throw bank statements and receipts into a box and procrastinate. If this happens, don’t worry, you can still call on us to help you sort out your data, input your transactions and prepare your reports.
 
  • Train and hire a family member to maintain the books. From a supervisory role and internal control system standpoint, it’s still critical to have a basic working knowledge of the software and procedures. We can help train your family member and also provide regular support, when needed, so that you can relax and go on with your business.
 
  • Hire a local bookkeeper to provide the services you need, and turn the books over to your certified public accountant for planning and tax preparation at the end of the year. A bookkeeper will certainly be more skilled and knowledgeable than you or a family member, and you do not have to pay as much,as you will pay a CPA to do the Job. One smart strategy is to negotiate a fixed monthly fee so you can budget for the service.
 
  • Engage your Bookkeeper to provide all bookkeeping services, and transfer your tax preparation to your CPA, by doing this, you are putting in place a great check and balance between what your Bookkeeper and CPA are doing. This will also ensure that you are getting most of your tax deductions accurately.
 
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.
 
 

Build up your Personal Balance Sheet

Posted on January 16, 2013 at 12:00 AM Comments 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.