Small business owners face the job of making sure that all of their accounting procedures are conducted as efficiently and accurately as possible. On the whole, company owners have to make a choice between a manual accounting method or accounting software programs. An accounting software system has many major advantages towards achieving faster growth in a company. More and more companies are choosing to use this method for the following reasons.

1. Time Saving

One of the most important advantages provided by computerized accounting software is that it can save huge amounts of time for small business owners. They can easily make calculations for operations such as billing and payroll performed efficiently and quickly just by using accounting software programs intended for small businesses. They can also have access to their accounting records swiftly without having to go through huge files of paper. Businesses can give more time to their customers and focus more on their marketing functions which will help their business grow further.

2. Reduced Errors

Manually “number crunching” presents opportunity for human error. This error can be costly for any small company owner who happens to be in a rush to finish an accounting task. Calculation errors can occur due to inaccurate inventory counts, incorrect total sales receipts, along with many other reasons.

With the help of computerized accounting programs and software, there is a drastic reduction in calculation errors. If you have accurate accounting information, it will also help you escape any tax blunders that could possibly lead to complications and difficulties with the Internal Revenue Service.

3. Centralization

Using an accounting software in a business helps centralize and unify many aspects of the business’s financial management. A small business owner will easily be able to undertake tasks such as payroll, invoicing, inventory management, and some sides of customer relationship management, all from an accounting software program. A business owner will save money and time because of centralization as long as the owner does not need to buy separate software programs in order to perform operations such as invoicing customers.

4. Makes Tax Compliance Straightforward and Easier

Besides presenting the amount of tax that is to be paid on particular invoices, accounting software also aids the business owner in preparing reports. An example of this scenario can be the amount of a particular tax the business owner has been paying during the course of a certain period. Also, accounting software makes it a lot easier to collect the information needed to complete and apply for essential government tax forms.

5. Provides Tools for Analysis

If a business owner uses an accounting software, it will be just like having their own in-house financial consultant. The customizable reports will allow the owner to analyze and examine various aspects of the business as well as provide the information and statistics needed to make better and more informed financial judgments. Reports, such as a balance sheet, help summarize exactly just how well the business is doing.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks^TMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

One of the primary reasons behind why start-up businesses run into difficulties is that they keep running into the issue of not having any market for the product or service being provided. Here are some common issues that new businesses face:

• There isn’t a sufficiently convincing incentive or occasion that compels the customer to focus on buying or purchasing the product or service. Experienced sales reps often reveal that to get a request in the present intense conditions, you need to discover buyers that have a dire need to purchase the particular product or are greatly enthusiastic about it. You additionally hear individuals discussing whether an item is a Vitamin (pleasant to have), or an Aspirin (must have). This is a key to startup success and survival.

• The market timing isn’t right. You could be ahead of your market by a couple of years and the stakeholders will not be prepared for your specific arrangement at this stage. For instance, when EqualLogic first propelled their product iSCSI, it was still early. It required the landing of VMWare which required a capacity zone system to do VMotion to truly jump start their market. Luckily, they had the financing to last through the early years.

• The market share of business being small and having finance which is essentially not too large. Strategizing to capture significant market share is also a key start-up task for an entrepreneur.

Business Model Failure

In the wake of numerous organizations just starting their business operations, it can be observed that the most significant and widely recognized reasons that obstruct startup success are the excessively idealistic approach about how simple it is to get to new clients. They accept that since they will assemble a fascinating site, product, or service, the clients will beat a way to their doors. That may be true with the initial set of clients, yet from that point onward, it quickly turns into a costly errand to draw in and win clients. When compared to the cost of acquiring the client (CAC), it was ultimately higher than the lifetime estimation of that client (LTV). Bookkeeping these two elements require careful financing and intense management strategies.

The perception that you must have regarding the capacity to get your clients for less cash than they will produce in the value of the lifetime of your business with them is stunningly self-evident. However, regardless of that, it can be observed that by far most of the entrepreneurs neglect to give careful consideration to making sense of a reasonable cost of acquiring customers. These assessments are primary start-up tasks which should be done by an entrepreneur.

The Essence of a Business Model

A straightforward approach for startup businesses is to concentrate more on what makes a difference in your business model.  It is about giving a thought to the following questions:

• Can you find a versatile approach to secure clients?
• Can you capitalize those clients at an altogether higher amount than your cost of acquisition?

Contemplating things in such straightforward terms can be extremely useful. There are two “standards” around the business model which are less rigid. These are laid out as follows:

• The CAC/LTV

The principle is relatively straightforward: CAC must be not as much as LTV

• CAC = Cost of Acquiring a Customer
• LTV = Lifetime Value of a Customer

To calculate CAC, you should take the whole cost of your sales and marketing capacities (counting pay rates, marketing programs, lead generation, travel, and so on) and divide it by the number of clients that you may close during that time frame. So for instance, if your aggregate sales and marketing expenditure in Quarter 1 was $1m and you close 1000 clients, at that point your average cost to get a client (CAC) is $1,000.

To calculate LTV, you will need to take a look at the gross margin related to the client (net of all establishment, support, and operational costs) over their lifetime. For organizations with one time charges, this is quite straightforward. For organizations that have repeating membership income, it is calculated by taking the month to month repeating income and dividing that by the month to month churn rate. In bookkeeping for these numbers, accountants need to develop a system that focuses on CAC, and LTV returns.

Since most organizations have a progression of different capacities, for example, G&A and Product Development that are extra costs in addition to the sales and marketing, and conveying the item. This is where bookkeeping can play a strategic role for startup businesses.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks^TMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

What Is Life Planning In Terms of Savings?

Having a strong financial threshold is absolutely necessary for prospering. The fact of life is that money matters. It keeps you going and enables you to protect yourself and your family from unforeseen circumstances or expenses. Saving money has its own strategic importance in life. Obviously, everyone wants to become financially secure and more stable in life. That’s why people tend to save money for numerous reasons which include; to become financially independent, to attend to emergencies and unforeseen expenses, to get out of debt, to increase their bank balance for investments and reserves, to save money for buying home, car, travel, education, retirement etc.

What Happens Without Planning Finances?

‘How much money do we need to save’ is probably the most discussed topic in peers, families, schools, colleges, and social gatherings. We need to learn the art of saving money for hard times or else we will probably get stuck miserably in severe financial crises. It becomes extremely challenging to recover from a serious financial crisis as your entire financial equation disrupts. One thing to be noticed is that not everyone is privileged enough to procure a regular paycheck. In fact, most people find it very difficult to make their ends meet or save money for hard times.

Always Save

In order to meet daily necessities, some people can budget their paychecks extremely well and they always manage to save a tiny portion of income for savings for hard times. Others face extreme level difficulties in maintaining a healthy financial life cycle, predominantly due to irregularities in monthly paychecks. Careful planning and budgeting are critically important for keeping a balance between your income and expenditures. Without creating a budgeting mechanism, you can never expect to save money—no matter how hard you may try.

Consistent Support via Financial Planning

According to the 50/30/20 rule, you must put at least 20% of your income into your saving account. By keeping 20% income as reserves, you will probably get stress-free from money-related concerns. It is absolutely necessary for people that do not have regular paychecks to make a finance budget in order to keep an eye on their income and spending schedules. There are hundreds of professions such as consultation, designing, freelancing, and commission based sales agents working for different organizations that don’t promise a regular paycheck. For such people, following guidelines can help them to save money.

Know Your Baseline

Your baseline includes bare essentials, without which you can’t live. When you don’t have a regular paycheck, you must keep a proper record of all transactions and examine your spending patterns. Your income may be unstable, but expenditures on different commodities or services are generally stable, predictable and repeatable. It includes major expenses, listed below.

Groceries: An effective budget can help you save a lot of money. Food is a category where costs can be cut significantly. Plan on buying those products that are absolutely necessary for you to consume for the month. Quite understandably, maintaining a healthy financial flow without a regular paycheck is hard, which even restricts you buying items of your own choice.

Housing and Utilities: Obviously you need to pay your monthly utility bills, rent or mortgage payments—which can’t be ignored. The costs that are incurred on house maintenance creates a major problem for you to maintain a sound financial life cycle. When you have budget issues, you can postpone them or manage to fix things yourself.

Medical: If you don’t have medical insurance, then heavy expenses on medical treatments can cost you losing each and every penny in your savings. According to a study, it is perhaps the number one reason why people go bankrupt. This indicates that life without a regular paycheck is seriously hard.

Transportation: To save money for hard times, you can use public transport instead of buying or managing a car. Going to work in your own car may be considered stress-free but looking at the cost and benefit analysis, it should be avoided.

Set Your Income Target

Everybody can roughly predict how much they can earn in a single month. The expectation should be kept high and income targets must be set so that you can get a clear picture of how much more money you need to earn to maintain a balance in your emergency fund savings. However, there is no guarantee, whether you will be able to meet your income target—all that you can do is predict it and work hard to earn it.

Open Multiple Savings Accounts

Opening multiple savings accounts is a secret tactic used to save money without a regular paycheck. The income that you earn from different sources can be smartly allocated into multiple savings accounts. A tiny portion of your income that you credit in those accounts in prosperous times will surely help you out in rough financial times.

Conclusion

Having a regular paycheck doesn’t necessarily guarantee financial safety and security. With irregular paychecks, you can still afford to save money for hard times.  For saving money, it is your will and motivation that matters, not just the regular flow of monthly paychecks.


About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks^TMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Whether big or small, every company is constantly fretful about handling money. For new businesses, this is even more imperative, as managing start-up finances is crucial to enduring a capricious economy and competition. Particularly, entrepreneurial ventures need to exercise cautiousness with their financial decisions from their incubation. Every business desires a financial structure that engenders profit to maintain their credibility. Entrepreneurs must equip themselves with good money management skills to ensure the success of their venture.

Not all businesses, however, are adroit at controlling start-up finances. This doesn’t mean that you should do nothing about it. Here are a few useful steps that will offer you a good direction to start with.

Educate Yourself on Managing Start-Up Finances

Not every business owner has a firm understanding of basic financial concepts. Many are unaware of the basic bookkeeping rules and lack knowledge about various key aspects. Even if you are planning to hire an accountant, it is imperative to educate yourself on certain basic accounting principles. The long-term success of your business depends on your ability to understand the financial structure of your business because you will have to rely on it for making key business decisions.

Financial statements encompass 4 vital details – balance sheet, profit and loss statement, cash flow statement, and statement of shareholders’ equity. The cash flow statement scrutinizes operational undertakings, investments, and other start-up finances. The balance sheet delivers evidence related to the business assets, liabilities and shareholder’s equity. The profit and loss statement reveals the grossed revenue for a financial cycle. Shareholder’s equity signifies the quantity by which the business is funded through common and preferred shares.

Getting yourself acquainted with such information will be vital for your future endeavors as a business owner.

Plan for Growth

Failure to make a user-friendly product is one of the major reasons of failure for new start ups. However, as an entrepreneur, you are faced with numerous challenges that can be hazardous for your business. As a new business, your focus should be on the target market and every other aspect of the business should be aligned towards your customers. This is the only way you are going to sustain a business.

Your start-up finances should follow a specific plan designed for growth of your company. To secure your venture capital and be eligible for funds, you need to show fast-tracked growth. Otherwise, you will lag far behind in the race. New businesses can run out of funds if the growth stalls in no time as they are unable to sustain losses for a longer duration of time.

Watch the Cash Flow

Managing your start-up finances demands you to establish a financial control that provides your business with a solid foundation. Key internal controls include bookkeeping, auditing, damage control planning and cash flows. These controls are necessary to ensure that your business stays on course in developing SOP’s and manages its cash situation, even in tough times.

At all times you will need to vigorously monitor the cash situation and readjust your forecasts according to the current scenario. This requires setting up maximum purchase limits for everyone so that your business does not run out of cash at a critical time. You will need to oblige all expenses to be recorded on invoices to support audits as well as maintain positive cash flows. Start-up finances should also take inventory management into account, as your chosen method of recording it will have a significant impact on your taxes. If you are filing taxes for the first time, inventory and payroll taxes are two things you need to be concerned about the most.

Evaluate your Achievements

Key Performance Indicators (KPIs) are techniques to measure a company’s triumph in accomplishing business goals. You must create KPIs across multiple departments so that performance can be accurately measured individually.

You should ensure smart KPIs that are Precise, Assessable, Realistic, Pertinent and Well-timed. Goals that are too broad don’t usually have an end date and aren’t within your control. Thus, they are doomed to fail. Start-up finances should be used efficiently to align with the core objectives of your business and eventually help in long-term success.


About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks^TMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Time is one of the most valuable factors in our lives. It is an asset which once gone cannot come back. Nowadays, with a busy life, tight business schedules, and personal commitments, the value of time has been increased more than ever. Successful people spend their time according to their pre-planned schedules and try to minimize wastage of time in any way. Surveys show that forty percent of time spent by businessmen is on activities other than building their business. Most of the time they are busy in managing issues or expense reconciliation.

Businessmen and especially entrepreneurs should spend their valuable time on building and growing their business rather than just managing routine daily activities. Major hurdles and challenges faced by their business should be addressed timely and strategies should be updated according to the market surveys. 

Here are five ways to effectively manage your time and find more time in your day to build your business.

1. Automatic processes

Most businessmen spend their maximum time, efforts and staff on creating invoices, making payments, maintaining bookkeeping, processing payrolls and so on. They are left with no time for studying building strategies. The best solution to save time is to purchase and implement an online accounting software or application. Various affordable, easy to use and wonderful software are available in the market to handle accounting, bookkeeping, and payroll tasks. That saved time could be utilized for growth of the business. QuickBooks, Fresh Books, Xero are a few examples of accounting and payroll software.

Making daily processes automatic will definitely save your valuable time and energies for more productive activities.

2. Take advantage of being small

Small business entrepreneurs often have the advantages of being a multitasking and decision-making authority. They don’t need to go through a long process for getting an approval. They don’t strike in just managing the big teams and the big budget. They can utilize their small sized team and budget in building their business. They can make prompt decisions, implement strategies immediately and interact with customers closely and often.

They can invest their time in building a strong, trained and multi-talented team. They can develop a strong relationship with their customers. These activities will be fruitful for your business.

3. Leave your office

Development in technology allows businessmen to manage from anywhere, at any time. They don’t need to be present in their office desks for handling their business. They can perform official activities on the go. By using Blue Jeans Network and Skype, visual contact with partners and employees from anywhere is possible. Google Docs has made it possible to work on any file in real time by more than one individual from different locations.

LanuchPad and We Work allows you to find innovators and can exchange innovative ideas, discuss challenges and their solutions.  Professional meetings can be conducted. Phone systems have also been developed quite a bit over the years. These advanced technologies save time by providing flexibility of the timings and space.

4. Freelancing

For launching your idea or business, you don’t need the heavy budget, big team, and concrete office. Just invest a few dollars in creating a website. Seek the help of a freelancer from Elance or oDesk web designer to create a logo and attractive design for your website. Use Squarespace or Wix.com for creating the website without any specialized development skills. Find a freelance writer to write catchy content for your idea and launch your idea within a few days. This is how money, time and energy can be saved.

5. Virtual assistant

A personal assistant for scheduling meetings and making reservations for lunch is just wastage of money. Hire a virtual assistant for all of these tasks. Save salary, benefits and time. He will be as close to you as a next chair employee. Use video conferencing and instant message to contact him immediately from anywhere, at anytime.

Conclusion

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks^TMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Positive cash flow is the lifeline of SMEs (small and medium enterprises). It is vital to supporting and raising a business. Cash flow is not just bookkeeping the amount of money coming in and going out of a business. SMEs can save money by adopting the strategic approach to control cash flow. From the bookkeeping, this saved money can be invested in new markets and products. Loans can be paid off by controlling cash flow. SMEs will be in a much stronger situation with positive cash flow and can easily attract financiers and lenders with attractive funding conditions and at greater discount rates.

 Steps to Positive Cash Flow

1. Targets for Cash Flow

Set targets for positive cash flow. Generate a forecast and update it on a weekly basis to have better control over cash flow.  Andrew Jhonson, a financial advisor, states that controlling the creditors setting is important for the attention, satisfaction level, and ownership to succeed and rise. Bookkeeping of incoming and outgoing cash should be implemented to have better control.

2. Payment Terms are Clear

It is crucial for controlling cash flow to have clear terms for payment. This determines when and how will you be paid without delay. The CEO at the National Specialist Construction Council, Suzanne Nichol, pointed out that if the company doesn’t keep record of overdue payment, they will not be able to manage the cash flow.

3. Invoice Promptly

Pay invoices promptly to have positive cash flow in SMEs. Marion Thomson advised to clear invoices as soon as possible. Sending invoices through emails is a more efficient way as it is delivered quickly and it’s automatically recorded in the sent mails. Bookkeeping will help you to have a look at all of the transaction history.

4.   Easy Payments for Customers

Payment schedules should facilitate the customer as much as possible. Thomson advises. “Try to avoid being paid by check as it will result in delay before the money arrives in your bank account,” she says. “Online payments are a much better option.”

5.   Offer Clients Payment Packages at Fixed Rates

To ensure positive and stronger cash flow in SMEs, offer payment packages at fixed alerts and at periodic intervals.

6.   Establish Payment Schedules to Minimize Debtor Days

Many SMEs practice a long duration of payment and invoicing. This should be minimized to manage cash flow effectively.

7.    Manage Cash Flow by Utilizing Technology

Cash flow management becomes quite easy if we use technology. Many accounting softwares have been developed and adopted by entrepreneurs who have limited time for management.

8.   Focusing on Cash Flow Rather than on Profit

If your cash flow is in order, your profit will be in order. “A lot of new businesses do not make it past six months. They might have been a profitable business eventually, but they need to have a good cash flow to survive” Agnes Cserahti says. She estimated that 90% of SMEs never planned for cash flow, though they have profit forecasts of many years. This is one of the major reasons for failure in an early stage of business.

New business should work with clients who are reliable and who pay quickly.

9.   Training Employees Regarding Cash Flow Monitoring

Few SME’s, for example, Manchester-based Ratio Law LLP, assign a devoted individual to follow the money coming in and going out. Training of staff regarding positive cash flow management and bookkeeping should be scheduled to get optimum benefits.

10.  Keep Bank Informed

Your bank can suggest business helpful services. For example: overdrafts and credit, mainly when they are starting out. So you must be well aware of these services.

Conclusion

Having clear payment terms and invoicing through emails are two of the important steps mentioned above to create a positive cash flow. Following all of these points will ensure your success as an SME.


About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks^TMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.