If you don’t have a good handle on your finances, beginning with the money you spend (expenses), the money you receive in the course of doing business (revenues), how much your business is able to keep (profit) or how much you are in the hole (loss), how do you know how you are doing? I’m amazed when potential clients tell me – “There is still money in the checking account” as a response to my questions about their business financial situation and they are serious, not just kidding! If you are still keeping a box or a file of receipts hoping that at tax time you will find a great accountant who will work with you to translate the collection into a tax return, chances are you are not watching your cash flow as closely as you should be. It’s time to get serious about your business. It’s OK if you like keeping track in your own spreadsheet if it gives you the information you need as a business owner. For most small businesses QuickBooks is the most widely used although there are many other low cost (and even free) online accounting applications that let you track your finances from anywhere. Many banks and business credit card services let you download your recent transactions directly into your accounting program. Some will even categorize your expenses into spending categories to help you with the record keeping.
You and that great accountant that you work with will appreciate your step up into an accounting system. You will be able to keep your finger on the pulse of your business and start to do some analysis and answer questions like: What is your typical sale? When do your customers buy? What products or services are the most popular? What is your business income? What is your profit margin? Can you afford XYZ?
What would be helpful for you to know about your business financial systems? Share your thoughts in the comments area below.
Stay tuned for Part 3 – Time Management - in the next issue of this blog.
Read prior blog topics and visit my website at www.thebizedge.biz to find solutions to your business issues. Enjoy your business!