Author: Jennifer Brazer

Being involved in all aspects of your operation is imperative as a corporate proprietor. However, that doesn’t mean you must be an expert at everything. Business holders may wear those strategic and customer-relations hats well, but many have difficulty with the business’s accounting side. Even worse, financial mistakes can truly exploit growth or adversely impact your bottom line. It can clog cash flow, attract undue attention from the IRS, or hurt reputations with suppliers, customers, and staff.

To avoid those situations, listed below are ten accounting mistakes business owners are prone to and why these errors can be so harmful.

1. Falling behind in entries and reconciliation

Time is not on the small business proprietor’s side, especially when daily fires are put out. Months can pass rapidly without making any entries in the books or reconciling any business checking statements, credit card statements, sales tax accounts, or other types of financial accounts. This means financial statements and reports are not current. Without up-to-date information, it is challenging to make sound business decisions.

2. Struggling to be an accounting software shrewd

In a rush to set up the business, some business holders may not have spent the time correctly learning the accounting software they have chosen. Not knowing what the bookkeeping software can do means you could certainly make a mistake or miss out on some powerful functionality. Not setting up a software system properly could also lead to unused reporting capability and incomplete information, resulting in bad business choices.

3. Not seeing the reports for the tools

Accounting is not just an instrument for entering financial data to achieve state and federal tax protocols or tell you how much money is in the bank. Instead, bookkeeping is a powerful mechanism that answers questions connected to how a business owner’s tactical decisions are functioning or not functioning.

4. Mixing business and personal finances

One of the most common accounting mistakes business proprietors make is to mix their business and personal finances. Keep these separate and distinct to provide a more precise track record of what was used for business and specifically related to personal use only.

5. Throwing away receipts

Paper trails still count, but even those can become digitized. However, receipts are kept. The point is that they need to be recollected. Receipts provide solutions to any mistakes or gaps in bookkeeping records, and many offer supplementary deduction opportunities come tax time.

6. Making math mistakes

In the haste to finish the accounts after a long day, math mistakes can happen quite effortlessly, even when using automated accounting solutions. Math mistakes can also result from posting entries to the wrong account or making typos.

7. Concentrating only on the short-term

With the day-to-day matters of running a business, it is easy to preoccupy in the short term and completely forget about the future. Bookkeeping, though, is not just keeping track of today’s statistics. It’s also about estimating future growth and recognizing financial risk from current financial decisions or results.

8. Hiring the wrong person

The wrong person can create financial problems beyond making uninformed resolutions. Trying to save money or help a loved one out can lead to audits or penalties. Employing the wrong person can create issues that haunt your business for many years to come.

9. Thinking technology is always the answer

Tossing money at technology does not guarantee accounting mistakes will be avoided. After all, you still need to make the technology work properly. Also, not all technology was generated equally or is relevant to a specific business.

10. Not letting go

As a business proprietor, there are circumstances where not getting professional help is a significant blunder. It is okay to confess that accounting may not be your area of expertise. You likely started a company with a great idea or solution that had nothing to do with accounting, and that is where you should focus.

Conclusion

The financial side of running the company can make or break your business. Learning when to use tools or professionals to help in areas you struggle with can be one of the biggest make-or-break decisions for a company.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Building your credit score takes time, but it’s worth the effort. A good credit score is key to securing loans, mortgages, and leases, as it shows that you’ve been responsible with your finances in the past. By maintaining a good score, you can reduce the risk of missing payments, which is especially important for young people and students who are starting to establish their credit history.

By making smart choices, you can set yourself up for a financially secure future. Remember, starting off on the right foot has its benefits, and maintaining a good credit score is no exception. With patience, persistence, and responsible financial habits, you can build a strong credit score that will serve you well for years to come.

Get Help

Starting your credit journey on the right foot can feel daunting, but having a family member with a good credit history can be an incredible asset. By opening a loan account with a cosigner who has a positive credit history, you have the opportunity to give your own credit score a valuable boost. However, it’s crucial to choose someone who has faith in your ability to make payments. It’s also important to remember that your cosigner’s credit score could be adversely affected if you become unable to make payments.

Before deciding on this option, take the time to discuss all terms and conditions to protect everyone involved. With a little bit of planning and cooperation, starting your credit journey with a cosigner can be an excellent way to build a strong financial foundation for your future.

A Starter Credit Card

A starter credit card is built explicitly for people starting their financial journey and usually has lower credit limits of up to $300 – $500. However, interest rates are significantly higher compared to mature credit cards. Student credit cards allow you to gradually build up your credit and upgrade your cards when you build some credit. People with a little credit history can opt for Capital One credit cards, which have a high approval rate among starters. These cards come with no annual fees and offer better rewards if you keep a good history of building credit.

Watch Your Credit Card Balances

Another significant factor in measuring your credit score’s worthiness is how much revolving credit you have versus how much you use. The percentage should be on the smaller side for a better credit rating, and often, the optimum ratio is 30% or below. Paying off and keeping your balances low will ensure this percentage stays down. Consolidating your credit card balances with a loan can also help you score valuable credit points. Building credit with credit card issuers that accept multiple monthly payments should always be your priority.

Leave Old Debts on the Credit Report

There is a general perception that debt on your credit report is a bad sign and that you should hurry to remove it as soon as you pay off the loan. While it is true that negative items affect your credit score for worse and generally stay on your report for almost seven years, getting them removed might not be such a bright idea. If you have paid off the debt, you have converted it into good debt, which is suitable for building a credit score. Keeping the old accounts that you have a history of paying open is also recommended by credit-building experts. Therefore, never try to get rid of old debts that have been paid off.

Pay Bills on Time

If you are trying to make a big purchase related to a house or car, plan for it in advance rather than skimping on your regular bill payments and scrambling for money from here and there. A good credit score requires you to invest time by maintaining a steady flow of payments, month after month. Ruining all the effort and diligence by missing a single charge is never a bright idea because it will take years to build that again. Building credit requires patience and implementing innovative strategies to keep your financial and bookkeeping needs in order.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Check Your Credit

• Check for Flab: Review your accounts and dispute anything that isn’t correct. Call creditors and negotiate a settlement to pay off your debt or get on a payment plan. There are often payoff amounts that are significantly less than the original total.
• Flex your Muscles: Call your credit card company and ask for a credit increase, calculate what 1/3 of your available credit is so you know what amount to never exceed in credit card spending, look at the number of credit inquiries, and set a goal to have that be lower by the end of the year.

Know Your Ratios

• Check for Flab: Run your ratios to discover how you perform like a credit risk. If you are a Complete Controller client, ask your controller to look at your ratios on our reporting dashboard. Know what ratios banks prefer and set goals for improving yours. Here is a couple that make a big difference: debt to equity ratio, current ratio, and, for a business, net profit margin.
• Flex your Muscles: Use those awesome ratios to build business credit, buy an asset in the business, and check your Dunn & Bradstreet report to make sure they are attributing your new use of credit to your business. When your muscles get big, you can buy a building, if not leap one.

Build Your Savings

• Check for Flab: Look at your savings and determine whether they amount to at least three full months’ expenses. If you own a business, you should have three months of savings for business expenses tucked away and three months of savings for household expenses. Entrepreneurship is risky, and this is one way you can protect yourself in case of unplanned mayhem. Emergency savings should be a priority for every financially responsible adult, though it is often overlooked in the budget.
• Flex your Muscles: Look at establishing a cash benefit plan or 401(k) for your business so you can save even more. This doesn’t replace your three months’ expenses, which should always be liquid. When your muscles get big, begin thinking about self-insuring using a captive. It’s a great way to take a write-off on insurance and get the money back as dividends – now you’re playing with the big dogs.

Set Your Goals

• Check for Flab: Ensure you are not setting yourself up for failure. Make goals that are measurable and achievable. If you aren’t making progress toward your goals, recalibrate – take a step back and look at internal and external influences that may be getting in your way. Although personal and business goals can often be intertwined, it is important to list them separately and look for contradictions between them.
• Flex your Muscles: Set short-term and long-term goals and make sure to name the people or roles that will be involved in supporting each achievement. It is a team of various strengths that makes us strong. Consider training or mentorship; Clifton Gallup Strengths Finders is a great place to start. and there are many other training options you can find through online sources.

Chase Your Passion

• Check for Flab: We are stronger and more purposeful if we are chasing a greater good. Passion fuels us to get through the mire because we know that something great is brewing. Define your passion. You will be more effective and happier if you are determined to make meaning in everything you do.
• Flex your Muscles: As entrepreneurs, we have the opportunity to be leaders in our business, community, and families. Great leaders build up the people around them. Spot potential in others and make room for them to flex their muscles successfully. By fostering the growth and earning esteem of the people around you, you will become more passionate as a team.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

It wouldn’t be wrong to say that most Americans live right on edge, especially when it comes to financial planning. The latest survey revealed that more than half of Americans (59%) have less than $1,000 in their savings accounts. If your savings account balance is hovering below $1,000, you are probably among the 59% of Americans who need to take drastic steps to lift their account balance. With so many options to spend money on, ranging from entertainment to buying expensive sports items, it has become extremely challenging for Americans to save money for hard times.

Expert Perspective

Traditional finance advice dictates that every family should have enough money in their savings account to cover at least eight months of their expenses. Different experts have given their logic and explained the significance of having extra cash stashed in your bank account for rainy days. We all know that money-related issues can cause great stress among individuals and families. To lower the concerns related to money-related matters, you have to have enough money in your savings account to get you through those hard times.

The Significance of Savings

Regardless of how much money you make, saving money for rainy days is significantly important for you and your entire family. It begins with cutting unnecessary expenses. The theory of saving money is simple: the less you spend, the more you save. Undoubtedly, cutting expenses from your daily routine is no easy feat. You have to stay attentive and on your toes, all of the time to cut whatever expenses you possibly can and increase your savings account balance.

Moreover, having a sound amount in your savings account provides you with financial security and stability. Those who have the habit of saving money can meet emergencies with greater ease and flexibility. No one can predict the future, so you need to save money for hard times to become a sensible citizen of society.

Are Americans Truly Struggling?

People across the globe are finding it extremely difficult to maintain a true order in their finances. Americans are no exception. They have been struggling to sustain an average amount in their savings accounts. According to an online survey, a whopping 69% of Americans have less than $10,000 in their savings accounts, which is alarming for the entire economy. Even those who used to have the habit of saving money find it much more difficult to create the right balance in their accounts. Here are three reasons why an average American is finding it challenging to spend less and save more.

Spending Patterns

With increased digitization and social media use, people are instantly influenced by evolving trends, fashion, lifestyle changes, amenities, and facilities. We live in an era of creative marketing and advertisement, which is why we desire to embrace and purchase those products or services that feel good to us. Our spending habits have changed significantly in light of evolving trends and the desire to acquire more products and services.

We even purchase and acquire products and services that can only fulfill temporary desires, which is a big blow to our savings budgets. According to statistics, a shocking number of Americans have no savings at all! They give because they cannot afford to save money and can only afford to make their ends meet. Little do they know that it has more to do with their poor budget planning and spending habits that restrict them from saving money.

Poor Budgeting and Planning

According to studies, nearly 75% of Americans fail to stick with their monthly budget. This indicates that making a budget may be easy but following it is extremely hard. Even the smallest amount that you save each month accumulates to become a significant amount in your savings account over time. To spend less and save more money, you have to make a monthly budget and follow it strictly. Without it, you can never expect to save any money at all.

Lack of Attitude and Motivation

Americans’ happy-go-lucky attitude and carelessness without information and knowledge have caused them to be portrayed as having a lack of attitude and motivation. With the media not helping at all, some Americans are already neck-deep-in-debt. To save money, you need to keep your morale and motivation high because you are the only one saving money for yourself eventually.

Conclusion

Americans’ spending and saving habits have been largely compromised in the last decade or so. Looking at the statistics, nearly half of Americans have less than $1,000 in their savings accounts. Saving money is critically important because it provides financial security and stability. You must have enough savings in your bank account to address financial emergencies.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In an era where the digital landscape pulses with an ever-vibrant energy, businesses have found themselves navigating a world brimming with opportunities and, inevitably, a fair share of digital quandaries. Among these, the pressing need for robust cloud security stands out like a beacon, a testament to the digital age’s transformative power on business operations. This narrative isn’t merely about safeguarding data; it’s a thrilling saga of innovation, resilience, and the relentless pursuit of excellence in a world that never sleeps.

The dawn of the digital age heralded untold possibilities for businesses. Websites became not just digital brochures but dynamic platforms for commerce, engagement, and storytelling. As these digital assets burgeoned, so did the data they generated and stored. According to a report by Cisco, global internet traffic in 2021 was a staggering 122 times more than it was in 2005, illustrating the explosive growth of online activities. Amid this digital bonanza, the cloud emerged as a revolutionary force, offering businesses a way to store, manage, and process vast amounts of data without the need for physical infrastructure.

However, with great power comes great responsibility. For all its marvels, the cloud introduced a new frontier for security challenges. Cyberattacks have become more sophisticated, with data breaches potentially costing businesses financially and their reputation and customer trust. A study by IBM found that the average cost of a data breach in 2020 was $3.86 million, highlighting the financial stakes at play.

But fear not, for this tale is not one of doom and gloom. Instead, it’s a call to arms, an invitation to embark on an adventure of securing our digital fortresses. Here are some invaluable tips for fortifying your business website in the cloud:

Embrace encryption

Think of encryption as your secret code, a linguistic sleight of hand that keeps prying eyes from deciphering your data. Encrypting data at rest and in transit ensures that even if data is intercepted, it remains unintelligible to unauthorized users.

Implement robust access controls

Not everyone should have a key to every door. Implementing strict access controls ensures that only authorized personnel have access to sensitive data, akin to having a selective guest list for an exclusive party.

Stay vigilant with regular audits

Regular security audits are like having a detective on your team, constantly on the lookout for vulnerabilities or suspicious activities. They help identify potential security gaps and ensure compliance with security policies.

Educate your crew

Your employees are both your strongest allies and your potential Achilles’ heel. Conducting regular security awareness training can turn your team into a formidable first line of defense against cyber threats.

Have a contingency plan

In the event of a breach, having an incident response plan can mean the difference between a swift recovery and a prolonged nightmare. Think of it as having a well-rehearsed fire drill in place.

The benefits of a secure cloud infrastructure are manifold. In addition to protecting sensitive data, it fosters trust with customers, ensuring that their information is in safe hands. This trust is invaluable in an age where customer loyalty is gold.

Moreover, adopting a proactive approach to cloud security can offer competitive advantages. According to a survey by the Cloud Security Alliance, 33% of organizations view security as a factor that can actually accelerate cloud adoption. This indicates that robust security measures can protect your business and drive its growth.

Summary

In conclusion, the digital age has unfurled a canvas of endless possibilities for businesses. However, this landscape is not without its challenges, with cloud security being paramount among them. By embracing encryption, implementing robust access controls, staying vigilant through regular audits, educating employees, and having a contingency plan, businesses can confidently navigate this digital frontier. 

As we forge ahead, let us remember that complacency is the enemy of progress in the realm of digital security. The quest for a secure cloud is ongoing, a dynamic journey that demands our constant attention and innovation. So, gear up, stay alert, and embrace the adventure. In the digital age, the only constant is change, and our resilience is our greatest asset.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

A balance sheet is a powerful tool that provides valuable insights into a company’s financial health. By comparing the assets and liabilities, you can gain a better understanding of the company’s financial standing. It gives you a clear picture of the company’s financial performance, indicating its ability to meet its short-term and long-term obligations. A well-prepared balance sheet can help investors, creditors, and other stakeholders make informed decisions about the company.

The balance sheet data will also be used to calculate the current ratio, quick ratio, and networking capital, as well as provide an explanation of each and the meaning of changes from year to year. The results can be replicated for your firm or one you are interested in investing in.

You can find tons of great articles to help you on your entrepreneurial/investing journey on the Complete Controller blog.

What is Liquidity?

If you’re running a small or medium business, one of the theories in bookkeeping that you will want to wrap your head around as timely as possible is liquidity. Liquidity measures your business’s aptitude to cover its immediate and short-term debts and responsibilities. Put differently, it’s a method of labeling how well you can shield your current liabilities using your current possessions.

Computing your company’s liquidity, which you can do by computing and tracing different ratios of your business’s properties and liabilities, will be fundamental in ensuring that your corporation is in good financial shape. It can also help you spot possible money problems before they evolve too far and help you secure loans from creditors.

Why is SME Liquidity Important?

 A company needs financial freedom of action. This means you must be able to pay your bills. If you cannot pay, you’re insolvent, also called bankrupt. Liquid funds are necessary to avoid this state, which often spells the end of a company and remains solvent to pay your bills.

Even if you grow economically, solvent companies are endangered. It may be that your customers will always pay their bills. But it’s a fact that some people wait until the last moment to do it, until the very due date. Anyone not having the luxury to delay their payments but is obliged to pay immediately will have a liquidity problem if their available funds are insufficient.

Why Does it Matter to SME’s?

We’ve already seen that good liquidity—as demonstrated by healthy liquidity ratios—can help your business secure the credit it needs. But, taking a close look at your company’s liquidity over time can also allow you to make intelligent internal decisions about your business’ finances.

By comparing your current and quick ratios month-over-month and year-over-year and making comparisons to your competitors’ ratios, you increase the likelihood of spotting financial snags before they pop up or start to snowball. That way, you can make more informed decisions on company spending and determine whether or not you’ll need to liquidate any assets to cover short-term debts.

What is a Good Liquidity Ratio?

If your liquidity ratio is greater than 1, you’re doing well. There is no gold standard for a healthy liquidity ratio as it varies from market to market. It would be unreasonable to expect a construction company’s liquidity ratio to be the same as a stock broker’s.

If a company’s ratio starts climbing to a number much more significant than one, that is called a liquidity surplus. Too many assets and not enough spending hurt the market. However, if the ratio is less than one, it could spell bankruptcy for the company, indicating a struggle to pay off debts. Let’s look at some examples in the tech industry.

Conclusion

Hey there! Did you know that liquidity and liquidity risk can be a real challenge for smaller organizations? But don’t worry, with some thoughtful management, you can overcome these obstacles and keep your business thriving. In fact, prioritizing liquidity and liquidity risk management can be one of the most important steps toward a successful and vibrant global economy. So let’s get started!

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Large corporations are no longer the ONLY target of cyber criminal activities. SMEs (small and medium enterprises) have become increasingly exposed to the dangers of the cyber world, which is why SMEs are having difficulty securing their systems and networks. Cyber criminal activities have reached the point where industry IT experts have started assuming that they are a universal threat and, unless security measures are implemented, systems and data security are doomed. Unfortunately, there isn’t a single organization in the entire world that can claim that it has fool-proof cyber security. The biggest threat to SMEs is not the breach of their system. It does not realize the fact that cybercriminals can target their small-scale businesses.

Cybercrime is costly to SMEs, causing them to lose millions of dollars annually. The US alone is on the top of the list of having the highest number of cyber criminal activities. According to estimates, the reported cases of cyber crimes account for about $700 billion every year, multiplying at a massive pace. The thing is, the culture of “cyber-stealing” is growing, and individuals with hacking knowledge and expertise are considering it to be a safe career path that has a lot to offer to them. That’s why con artists and highly organized crime syndicates are coming up with sneaky tactics to break into SMEs’ accounts to steal sensitive information from companies. In short, cybercrime is a reality, and those who ignore it can expect to face troubles in the future.

What do Cyber Criminals Usually Look for?

To protect your business from cybercrime, you must implement a prevention plan to push infiltrators away from your company’s servers. Since cybercrime is multiplying, SMEs must adapt to improved network security protocols to prevent sensitive data from leaking. Hackers, intruders, cybercriminals, or whatever you name online scammers usually look for business data, bookkeeping and accounting records, vendor details, sensitive personal and client information, banking details, and more that can be sold on the dark web for money. Therefore, improving your system and network security can significantly help you prevent costly loopholes.

What can Cyber Crime Mean for SMEs?

First things first: business disruption with an immediate effect! Cyber criminal activities can be hefty for SMEs, costing them a sustainable competitive advantage and financial and reputational damage. Those who trust you with sensitive information and rely on you for certain essential aspects like the security of data, the secrecy of business transactions, the privacy of vendor details, and larger business interests need not be disappointed. So, you must ensure that business data is protected against all predictable or non-predictable cyber threats. Keeping proper checks and balances in place is ideal to prevent any information leakage from the company’s servers.

Keeping Your Business Safe from Cyber Crime

To protect your business from cyber-attacks, creating and implementing your own security policy is ideal as it will give you more control over your company. Having a written, clear-cut security policy helps your employees know the menaces of cyber security threats and repercussions they might have to face due to an incident of cyber fraud. Also, you must encourage your staff to use complex passwords and shut down their computers once they leave the office.

Cybercrime occurs when you fail to update your system and networks. You must update your operating systems, software, and browsers and install anti-virus software and firewalls to prevent cyber attacks. Moreover, it would be best if you were very careful with software installation, as hackers are inventing new ways by which they can target SMEs that are vulnerable to cybercrime.

Hiring an IT Expert

Hiring an IT professional is the best way to secure your business from cyber criminals. SMEs can hire IT experts to ensure their data safety and network security when they fail to comply with network security protocols on their own. They are not as expensive as you may think. The choice to hire an IT expert is a fair trade. Spending money on data safety and network security is a wise move compared to what you could lose if you are not protected.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

A private fund investment is a financial investment company in which,

• There are less than 100 investors
• Its participating investors have considerable funds capitalized elsewhere.

Such funds are exempted from laws and regulations of federal securities and are incorporated in the tag of “hedge funds.”

How Do Private Equity Investors Earn Money?

• Increase money: from Limited Partners (LPs), i.e., insurance, companies, pension funds, retirement funds, endowments, and wealthy folks
• Source, diligence, and close deals to gain companies
• Expand procedures, cut expenses, and squeeze administration of their portfolio corporations
• Trade portfolio corporations at a yield

Current financial statistics indicate that proficient investors like private equity individuals are tapping cash to work for private mid-market corporations. There are many hurdles that both investors and businessmen have to cross.

Here are a few strategies to attract owners of a private equity fund:

Review Your Financials

Review your financial statistics because the prospective buyer will check your financial statements in detail, and an audit free of gaps will attract investors. The buyer will perceive you as a serious and professional individual who keenly pays attention to details. Accurate bookkeeping of your transactions gives the buyer a signal of your efficiency and accuracy while negotiating.

Generate a Strong Team

• A strong team will be needed because you can neither do all the work alone nor always supervise.
• Private equity investors always search for such teams whenever they recapitalize a company.

Expand Your Client Base

Buyer concentration is the major hit for sophisticated financiers. Only 10 to 15 % of profit should be gained from one customer alone. It is risky when companies gain 40% to 50% of their profits from one to two clients. Bookkeeping of revenues must be kept to know the percentage of revenue that comes from each customer.

Make an Exit Strategy

“We like to see owners start meeting with their advisors two to three years before a planned transition. That way, the owner can act to fill the gaps so his business can become an A or even an A+ company,” said Fred Wainwright-certified exit planner of Ledyard Bank New Hampshire. So, an exit strategy should be designed after a detailed discussion with your financial planner, accountant, lawyer, and investment banker.

Fix Your Agreements

Keep your contracts fixed because the new customers will not be easy to find. Trying to obtain new customers rather than keep your current ones will cost more.  

Build the Product Pipeline

Attract your investors by beginning a new business in new markets so that they invest in your future plans. Investors will be interested in the size of the market and the source of shares. If they find satisfactory answers, they will definitely invest in your potential company.

Acquire a Realistic Assessment

Keep an accurate record of transactions through bookkeeping, and also get a formal evaluation from a certified appraiser to evaluate your business accurately. This is necessary information required while negotiating with a private fund investor.

Create an Acquisition

To grow fast and exit more attractively, buy another company, but this is not easy. “There is certainly no playbook. Suppose you’ve never made an acquisition before and don’t have people inside the company to guide you. In that case, you’ve got to find all the help you can get.” says Glenn Fishler, President and CEO of Environmental and Occupational Risk Management, Inc.

Organize Your Records Accurately

Investors are attracted by well-organized and accurately recorded information. Keep the record of customers, corporate structure, stockholders, bookkeeping of financial status, employees, etc.

Private fund investors will likely make the deal if your records are organized.

Protection of Intellectual Property

The value of intellectual property has increased quite a bit. The following are significant steps that need to be taken to expand the revenue of your business: prepare the catalog of training steps, documentation of software, copyright of your website, and trademark of your goods.    

Conclusion

Following the abovementioned strategies, you can excel and easily appeal to private fund investors for your old and new business endeavors.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Remember the old saying ‘when pigs fly’? You may have heard your parents mumbling this phrase in response to your allowance increase request. You may also recall it when you saw a casual, unwanted email promising your business 1000 new clients. And you have possibly even said it when someone recommended that you improve your bookkeeping habits in your business.

You might consider tax preparation for a part-time job. However, the key to refining your tax season experience is continuous preparation for the entire year, not just at the time of filing. Developing healthy financial habits should be engraved on the whole culture of your organization. Experiencing a heavy tax burden can help one appreciate the importance of balancing monetary responsibilities. While it may be painful, it is a reminder to adopt innovative accounting practices to secure the success of your business.

Get Rid of Outdated Accounting Systems

If you’ve been finding handling the influx of sales receipts, invoices, and financial reports challenging, it’s time to reconstruct your bookkeeping approach. Embracing cloud-based accounting software presents a practical solution, empowering you to generate, send, and receive real-time receipts and reports effortlessly. You can also synchronize the software with your bank account to send or receive payments. All of this is possible remotely, from anywhere. Developing healthy accounting habits should always be a top priority.

As these cloud-based platforms have easy accessibility and functionality, your business will habitually adapt and develop healthy accounting practices that are key to surviving the tax season.

Develop Contemporary Accounting Habits

Most top businesses today have invested in developing a sagacity among their employees to stay current and engaged. Staying in touch with the latest laws and tax changes is crucial for any business, and you must know about them in time so that something can be done before it is too late. The latest tax reforms are a contemporary example that needs to be thoroughly investigated by a seasoned team. Though you might be outsourcing your business bookkeeping, you should still try to learn about the changes to comprehend things.

Developing contemporary accounting habits also means that you stop procrastinating and start categorizing your expenses weekly. Leaving things on the back burner only causes them to add up, and when it’s time to file taxes, the situation becomes a fire drill for your whole team. Keeping a regular and consistent record of your financials will ensure that you avoid any problems.

Separate Personal and Business Expenses

Using your business account for personal use is never a good idea. The expenses will continue rising without you noticing and will eventually add up to your tax bill. You may not consider it a big deal, but it is a one-time thing. However, over a year, the expenses may accrue to be substantial. This is one of the worst accounting habits you can adopt.

Exclusively using business debit and credit cards generates a clear paper trail for bank reconciliation, streamlining the reimbursement process. Remember to go beyond just reconciling your bank accounts and ensure that all accounts with an ending balance are reconciled. It is crucial to reconcile your bank accounts, loans, lines of credit, credit cards, and payroll liabilities daily or weekly without waiting until the end of the month.

Have Your Books Reviewed by a Professional

You may consider hiring a CPA an expensive and insignificant endeavor. However, that decision can be one of the most valuable accounting habits that save you from a hefty tax burden. Just because your books are reconciled doesn’t prove that they are also accurate. Having another set of eyes looking at your financials won’t hurt you. Instead, a CPA will offer critical input, which could reduce your tax bill considerably. Because these professionals have experience looking at thousands of financials, they will surely catch any ambiguities. They can offer you valuable advice on managing your taxes in the future.

Learn more about reconciliation and proper accounting practices on the Complete Controller blog.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Employee theft and embezzlement are the main reasons behind the demise of most start-ups. Entrepreneurial business ventures are initiated mainly by inexperienced individuals who lack business management knowledge, skills, and expertise. However, business management doesn’t have to be that difficult to master. All you need to do is learn the art of the game and know your employees well enough to create a powerful prevention plan against employee theft and embezzlement.

Unusual habits and changing behavior of employees, plus a lack of timeliness in updating and reconciling accounting records, reveal a lot about an employee and their commitment to their work. Detecting and preventing employee theft and embezzlement has become the need of the hour. Companies are even ready to hire professionals who devise creative ways to catch the culprits for their misconduct. According to studies, business owners worldwide lose about 6% of their annual revenues and profits to employee embezzlement.

Blind Trust Has Its Repercussions

You might be surprised that trusted and established employees steal more from companies. How can a business expect to witness significant returns if their trusted partners, stakeholders, or employees will steal from their business? This is alarming for your company’s fate because it will slowly and gradually eat your business altogether if you do not stop it. In other words, unfortunately, employee theft and embezzlement are something that you will constantly battle throughout running your business. There is certainly no magic formula that will stop it right away, but your constant efforts will undoubtedly positively impact you!

We, as humans, tend to fall prey to our desires. We look for an easy way to fulfill our wants and needs, often leading us to commit fraudulent activities like stealing supplies from homes and offices. This activity has to be stopped no matter what because it will ruin our motivation to earn legitimate money, which is hard to gain back!

What to Do To Prevent Employee Theft and Embezzlement

According to studies, 55% of fraudulent activities result from group activities involving others to help commit financial crimes. This information bears testimony that employee theft and embezzlement are challenging for an individual and a lot easier for those who work in groups for mutual gains, financial or personal. Certain things can help you protect your business against embezzlement if executed perfectly, such as knowing and supervising your employees, maintaining control over financial matters, cross-checking or auditing business bookkeeping, integrating and incorporating computer software for digital tracking, separating financial duties of employees and last, but not least, checking stock inventory regularly.

Forms of Employee Theft and Embezzlement

People who steal from you are clever and smart individuals who will always think one step ahead of you. You must constantly upgrade and change your measuring mechanism for evaluating your employees’ misconduct, as they know your company inside and out. Employee theft and embezzlement typically exist in three forms: theft of cash, robbery of goods, and theft of sensitive information.

What To Do For Getting Things Back On The Track

You need to discourage these fraudulent activities as much as you can because it will help you save a lot of money in the long run. Instead of your company policy, you may document every sale/purchase for your records, create and follow up on written procedures for ideal business management, keep track of inventory at your capacity, and periodically review employee theft and embezzlement prevention measures. According to experts, if each employee is held responsible for their deeds, there are fewer chances of theft, fraud, shoplifting, embezzlement, and other fraudulent activity incidents.

Suppose all preventive measures fail to get things back on track. In that case, you should consider hiring a professional accounting, bookkeeping, or auditing expert who will sketch a clear picture of your finances to devise a prevention plan to stop employee theft and embezzlement.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.