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Do your finances seem to be continually out of your control? Do you spend too much money on credit cards? Do you struggle to keep a balance between your spending and savings? If one or more of these circumstances describes your financial situation, maintaining a budget may help. Creating and sticking to a solid budget are the first steps to financial freedom.

Although budgets tend to be excellent in action, they are demanding in theory. Not sure how or where to start budgeting? Whether you have not managed to create a budget plan or are simply facing trouble sticking to your budget, here is your easy yet practical, step-by-step guide to help you build a budget you can effortlessly follow.

Begin with Big Goals

First, you must know that successful budgeting focuses on your goals. Thus, make it clear in your mind WHY you are making a budget. Do you want to get rid of your debts as soon as possible? Are you planning to pay cash for a vehicle? Do you aim to purchase a home? Do you wish to retire early to travel around the globe? In essence, focus on your big goals, as they are the secret to achieving everything you want to.

Track Your Spending

Before creating a budget plan, you must understand how much you spend monthly on various items. To determine this, you must identify your budget baseline simply by tracking your spending for the past few months. Thus, go through your recent bank statements, the last six months or more, and determine how much goes towards utilities, food, groceries, mortgage or rent, transportation, shopping, etc. This process will also enable you to identify areas where you often overspend. Consequently, you become more aware of your spending and saving patterns, helping you make better financial decisions.

Make the Most of Technology

Technology has made things far more straightforward than most people know. If you have never made a budget before, are unsure where to begin your budgeting, or get frustrated with intricate details, using a smartphone app is a good idea. Many great budgeting, bookkeeping, and finance apps can connect with your bank accounts and set up a total budget over time by using the data from your spending habits. 

Give Each of Your Dollars a Purpose

When you begin budgeting every dollar, you eventually plan for unexpected situations, such as spending on a sporadic cup of coffee with your friend. It will also help you put your extra money towards either savings or an emergency fund. Give your cash purpose down to your every penny.

Set Goals

Your financial goals can ease the pain of saving money. The more specific your goals are, the more motivated and excited you are to save money and the more inclined you are to stick to them and, thus, budget. Your great goals could be saving for a dream vacation with your family or a down payment on a new home.

Allow Yourself Some Fun

Besides focusing on your basic needs and financial goals, make a thin line for fun. If your budgeting plan makes your life dull, you are less likely to follow it. On the contrary, you will love sticking to a plan that keeps you happy. A few fun categories in your budgeting may include eating out on weekends and saving for the winter holidays.

Use Cash

It is often easier to overspend; thus, save less when using credit or debit cards. Therefore, take out adequate cash on your payday for the budget categories that make sense and tell yourself, ‘I cannot get more money, even when I run out.’ You will finish spending right away when your cash is gone! And this is simply one of the easiest ways to keep yourself accountable.

Automate Your Savings

Transfer part of your paycheck into your savings account as soon as you receive it. This will help you minimize your spending and improve your savings. You can also leverage auto withdrawals to save for expensive transactions like a vacation or new furniture.

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.

Spring cleaning is a well-known ritual in homes, marking a time to refresh living spaces by thoroughly cleaning and decluttering. But when it comes to businesses—especially healthcare organizations—spring cleaning can be more than just physical space management; it can extend to optimizing financial operations and streamlining systems. Financial spring cleaning refers to the process of reviewing, reassessing, and refining all aspects of a business’s financial health, with a focus on boosting efficiency, cash flow, and overall profitability.

In the healthcare industry, where margins can often be tight, financial spring cleaning is an essential practice to ensure operational success, improve service delivery, and avoid unnecessary complications. Let’s explore how healthcare organizations can leverage these steps to optimize their financial operations and improve their bottom line.

Re-Examine Payment Policies

For healthcare providers, cash flow management is critical. A steady stream of payments ensures that you can cover operational costs, pay staff, and continue offering high-quality care. However, delayed payments or unpaid bills can pose a significant challenge. According to industry data, healthcare providers often face long payment cycles due to insurance reimbursements, patient deductibles, and billing disputes. Without a clear understanding of outstanding payments, practices risk increased accounts receivable and reduced cash flow.

Action Steps:

• Analyze Accounts Receivable: Work with your finance team to track unpaid bills and generate an aging report. Categorize accounts by payment status (30 days, 60 days, 90 days, etc.). This helps identify patients, insurance companies, or payers who are consistently behind on payments.

• Negotiate Payment Terms: Consider offering early payment incentives or discounts for patients paying upfront. For recurring patients or long-term treatment programs, evaluate the feasibility of payment plans that break down larger balances into manageable installments.

• Review Insurance Contracts: Regularly evaluate your contracts with insurance providers. Are they paying on time? Are reimbursements in line with market rates? Adjust your payment policies accordingly to ensure prompt payments. If certain insurers are slow to pay or provide insufficient reimbursements, it may be worth renegotiating contracts or exploring alternative insurance carriers.

This step will enhance cash flow, reduce bad debt, and potentially save you from borrowing or incurring additional debt. Managing payments effectively not only benefits the financial health of the organization but also reduces the burden on administrative teams handling billing inquiries.

Assess Pricing Models

Pricing within the healthcare sector can be complex, with various factors influencing cost structures—insurance reimbursements, treatment protocols, and competitive rates. Healthcare providers must ensure that their pricing is not only competitive but also sustainable for the practice’s profitability. If your pricing model is outdated or inefficient, it could lead to revenue shortfalls or deter patients from seeking necessary treatments.

Action Steps:

• Market Comparison: Analyze how your pricing compares to other healthcare providers in your region or specialty. Are you charging too much or too little for the services you offer? Keep in mind that pricing should be both competitive and reflect the quality of care provided.

• Evaluate Cost-to-Serve: Ensure that your prices cover operational costs, including facility maintenance, staff wages, medical supplies, and equipment. Adjust pricing to avoid running into losses while remaining fair and accessible to patients. In some cases, it may be appropriate to raise prices for certain services, but ensure that increases are in line with industry standards and patient affordability.

• Revisit Service Bundling: Consider bundling certain services, such as preventative care packages or wellness check-ups, to improve both patient satisfaction and profitability. Bundling services can also encourage patients to seek care they might otherwise defer, helping to increase overall revenue.

Pricing is a sensitive area in healthcare, and getting it right can ensure financial health while maintaining patient trust. In some cases, raising prices could alienate patients or impact patient volume, so it’s essential to strike the right balance.

Review Cash Balances and Operating Expenses

Healthcare facilities face unique financial pressures, especially during seasonal downturns or periods of low patient volumes. It’s essential to prepare for such lulls by ensuring you have sufficient working capital to cover fixed expenses such as rent, utilities, and staff salaries. During times of financial uncertainty, maintaining enough liquidity ensures that your practice can continue to operate smoothly without disruption.

Action Steps:

• Evaluate Cash Flow Trends: Review past financial records to understand cash flow fluctuations throughout the year. Identify lean periods and plan for them by maintaining higher cash reserves or exploring short-term financing options. This will help smooth out cash flow disruptions during slow periods or unexpected financial challenges.

• Maintain Liquidity: Always ensure you have enough liquid assets to cover fixed operating expenses, especially during periods of slower revenue generation. This can prevent the need for borrowing or relying on lines of credit at high-interest rates. If cash reserves are low, consider securing a working capital loan or opening a new line of credit to cover operational costs.

• Evaluate Fixed vs. Variable Costs: Understanding your fixed expenses (such as rent, utilities, and insurance) and variable costs (such as medical supplies and temporary staffing) is critical. Look for opportunities to reduce fixed costs where possible, and carefully monitor variable costs to avoid unnecessary expenses.

Preparing for potential downturns while maintaining enough cash to cover fixed costs is a crucial aspect of financial spring cleaning in healthcare. By safeguarding your practice’s liquidity, you can avoid the stress of financial instability and continue to focus on patient care.

Re-Negotiate Contracts and Vendor Agreements

Healthcare organizations often sign long-term contracts with suppliers, service providers, or equipment leasing companies. These agreements can contribute significantly to fixed costs, which, if not regularly evaluated, may eat into profits. As your healthcare practice grows, some of these contracts may become outdated or less favorable, so it’s important to reassess them periodically.

Action Steps:

• Review Supplier Contracts: Healthcare providers often rely on multiple suppliers for medications, equipment, and consumables. Reassess contracts to ensure you are getting the best deals or terms. Explore renegotiating long-term contracts for better rates or discounts, particularly for high-volume or frequently ordered items. In some cases, consolidating suppliers or switching to alternative vendors could lead to substantial savings.

• Lease vs. Buy Decisions: Reconsider any long-term leasing agreements for expensive medical equipment. Purchasing equipment outright or exploring alternative financing options could save substantial amounts in the long term. Evaluate the total cost of leasing versus the upfront cost of purchasing and determine which option offers the best value over time.

• Service Contracts: Review service agreements, such as for IT support or cleaning services. Determine if the services provided are meeting your needs and if better or more affordable options are available. Service providers may be willing to offer discounts for long-term commitments or prompt payment.

Renegotiating existing contracts or exploring alternatives can free up capital, which can be reinvested into patient care or other strategic areas of the practice. This is especially important in the healthcare industry, where operational costs are often high, and small savings can add up over time.

Analyze Recurring Subscriptions and Software Costs

Like many businesses, healthcare organizations often subscribe to a variety of software platforms, tools, and services, from Electronic Health Record (EHR) systems to patient management tools and billing platforms. However, these subscriptions can accumulate over time, often for services that are no longer utilized or necessary.

Action Steps:

• Audit Subscriptions: Conduct a thorough audit of all recurring software subscriptions, including EHRs, patient scheduling software, billing systems, and other digital tools. Ensure each platform is still serving your needs and providing value. If a subscription is no longer beneficial or necessary, consider canceling it.

• Cancel Unnecessary Subscriptions: Identify unused or underutilized software and cancel subscriptions to reduce overhead. Explore more cost-effective solutions or consolidate services if possible. In some cases, it may be more efficient to invest in an all-in-one platform that combines multiple functions, reducing the need for multiple subscriptions.

• Optimize Technology Investments: Invest in systems that are scalable and can support your growing practice while providing the best value for your money. Technology investments should streamline operations and enhance patient care, not contribute to unnecessary expenses.

By optimizing your software and technology spending, you can redirect savings toward improving the quality of care or expanding your services. Properly managing software and tech-related costs is vital in an increasingly digital healthcare environment.

Evaluate Staffing and Labor Costs

Labor costs are one of the largest expenditures for healthcare organizations. Properly managing staffing levels, wages, and benefits can lead to significant savings, without compromising the quality of patient care. Given the ongoing shortage of healthcare workers in many regions, it’s essential to balance staffing needs with financial sustainability.

Action Steps:

• Review Staffing Levels: Evaluate whether you have the appropriate number of staff for your patient volume. Consider implementing staffing efficiency models, such as flexible scheduling or cross-training, to reduce costs without affecting service delivery. If certain roles can be automated or outsourced, explore those options to cut costs.

• Optimize Overtime and Benefits: Examine overtime pay, employee benefits, and incentive structures. Look for areas where cost-saving measures could be implemented, such as improving scheduling practices to avoid excessive overtime or offering flexible benefits packages. Additionally, consider offering employee wellness programs to boost morale and reduce turnover.

Balancing efficient staffing with high-quality care ensures financial sustainability while maintaining patient satisfaction. Well-managed labor costs contribute to overall profitability without compromising service quality.

Final Thought

Much like the personal ritual of spring cleaning, a financial spring cleaning for healthcare organizations can lead to better operational efficiency, improved cash flow, and a more organized, profitable practice. By regularly reviewing payment policies, pricing models, cash balances, contracts, subscriptions, and staffing levels, healthcare providers can ensure they’re positioned for long-term success.

Remember, it doesn’t have to be spring to start. Periodic reviews and adjustments are necessary to keep your healthcare organization on the path to prosperity while providing exceptional care to your patients. Financial spring cleaning is not just a seasonal task—it’s an ongoing commitment to improving the health and sustainability of your practice.

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 today’s fast-paced digital world, social media marketing is not just an option for small business startups—it’s a necessity. The digital realm offers a fertile ground for businesses to bloom, but without the right strategies, your brand could just as easily get lost in the digital noise. Let’s dive into the importance of proper social marketing for small business startups and highlight the top 10 mistakes to avoid, peppering in some relevant statistics to underscore our points.

The Importance of Social Marketing for Small Business Startups

Imagine launching a startup and having a direct line to millions of potential customers without breaking the bank. That’s the power of social media marketing! It levels the playing field, allowing small businesses to reach a vast audience, engage with customers, and build brand loyalty, all while keeping costs relatively low. In fact, 73% of marketers believe that their efforts through social media marketing have been ‘somewhat effective’ or ‘very effective’ for their business (Buffer, 2019).

Top 10 Mistakes in Social Marketing and How to Avoid Them

Undefined goals

Jumping into social media marketing without a clear strategy is like setting sail without a map. Define what you want to achieve—be it brand awareness, leads, or sales—and tailor your approach accordingly.

Ignoring the right platforms

Not all social media platforms are created equal, especially when it comes to your target audience. A staggering 72% of teens use Instagram, while Facebook’s largest age group is 25 to 34 years old (Statista, 2020). Choose platforms where your target customers are most active.

Overlooking content quality

In the rush to stay active, don’t compromise on content quality. High-quality, valuable content fosters engagement. Remember, content is king, but engagement is queen.

Not engaging with your audience

Social media is a two-way street. Ignoring comments, messages, and feedback is akin to ignoring customers walking into your store. Engagement builds community and loyalty.

Failing to analyze performance

What gets measured gets managed. Only 44% of businesses plan to increase their social media analytics use (Social Media Examiner, 2020). Regularly review analytics to understand what works and adjust your strategy accordingly.

Being too promotional

Constantly selling on social media can turn your audience off. The 80/20 rule is a good guideline: 80% informative, entertaining, or educational content and 20% promotional.

Inconsistency

Posting sporadically damages your brand’s visibility and follower growth. A consistent posting schedule keeps your audience engaged and informed.

Ignoring visuals

Visual content is 40 times more likely to be shared on social media than other types of content (Buffer, 2014). To boost engagement, incorporate eye-catching images, videos, and infographics.

Not leveraging user-generated content

User-generated content reduces your content creation workload and boosts credibility.  Consumers find user-generated content 9.8 times more impactful than influencer content (Stackla, 2019).

Forgetting about paid advertising

Organic reach is declining, making paid advertising a crucial part of your strategy. Even a small budget can increase visibility and lead generation.

The Power of Social Media Marketing: A Case in Point

Consider the story of a small eco-friendly clothing line that leveraged Instagram to skyrocket its sales. By focusing on high-quality visuals, engaging directly with followers, and using targeted hashtags, they grew their audience from 500 to 50,000 in just one year. They also capitalized on user-generated content, sharing customer photos and reviews, which significantly boosted their credibility and appeal. This strategy not only increased their online visibility but also translated into a 200% increase in sales.

Conclusion

Social media marketing presents a golden opportunity for small business startups to connect with their audience, build brand loyalty, and drive sales. However, success requires a thoughtful strategy, avoiding common pitfalls, and adapting based on performance analytics. By sidestepping these top 10 mistakes, small businesses can harness the full potential of social media marketing, turning digital landscapes into thriving marketplaces for their products and services. Remember, in the realm of social media marketing, patience, persistence, and engagement are key. So, gear up, get strategic, and watch your small business soar to new heights in the digital sky!

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.

Every business owner knows that running a company can be hectic. For example, bookkeeping can become a demanding task because keeping track of expenses can be a serious chore. One way to ease this stress is to use a credit card to conduct company transactions, as month-end statements make it much easier to track expenditures. 

Many companies offer business credit cards. However, business owners often avoid opening a card, thinking it may compromise the benefits of personal credit cards. 

Therefore, should entrepreneurs use their cards or move to business credit cards to make purchases for their company? 

Using Personal Credit Cards for Business Purchases 

Using a personal credit card for business transactions is possible, and it even has some benefits. One of the most important reasons for using an individual card is the CARD Act of 2009, which prevents credit card providers from charging higher fees and increasing interest rates than personal cards are subject to. Business credit cards do not enjoy these protections.  

The second reason relates to the rewards and benefits of using a personal credit card. There is almost always an incentive program to encourage the use of individual cards. On the other hand, business cards do not offer as many benefits as personal cards. There might be some offers intended to attract businesses, including the ability to purchase office supplies at a discounted rate. However, it might still not be enough to entice owners to begin using a business credit card. 

Complete research to determine what benefits suit your business and choose a credit card based on those benefits, whether personal or business. 

Do Not Dismiss Business Credit Cards 

Although choosing a personal credit card sounds desirable, you should not dismiss the possibility of using a business card. There are certainly many advantages associated with getting a business card, and the additional services offered with many business cards might be just what your company needs. 

A typical example is a business handing out credit cards to its employees. Most credit card providers facilitate this need by supplying multiple cards associated with a single account. On the other hand, personal credit cards are for individuals and do not offer these services. 

Another advantage associated with business cards is spending more than one could on personal credit cards. However, this is useful, especially for companies with many monthly expenses they must put on their card. 

Suggestions for Success 

It is recommended that you examine the nature of your business expenses. Once you have assessed the needs of your business, you will be able to conclude which card (business or personal) is a better choice to be used in your company’s operations. Once you get the card you want to use for business, keep the following suggestions in mind: 

• Do not mix business and personal cards, leading to messy bookkeeping. 
• Use the tools provided by your credit card company to keep track of your business expenditures. However, this is the main reason businesses opt for credit cards. It is recommended that you do not ignore this suggestion. 
• Build healthy credit habits. These include paying the credit card bills when they are due and in full. Remember that you are using a credit card to keep track of your expenses and that it should be your priority to maintain a good credit score and avoid high-interest payments. 

Conclusion 

Using a credit card to track business expenses is always an option. When choosing a card, you will use it to help monitor business operations. It is always wise to look around for what is offered and at what price. Healthy credit habits are also necessary to fully use the card without incurring unnecessary liabilities.  

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.

One of the most important reasons a company may understate its cost of goods sold is to increase its chances of short-term success in each market. You can attain short-term success by getting financing or impressing outsiders to finance the company. However, understating the cost of goods sold can be dangerous for the long-term survival of a company if authorities find the fraud. Moreover, understating the cost of goods sold directly opposes bookkeeping standards and rules. The different reasons a company would understate the cost of goods sold are below.

Increase in Income

The cost of goods sold subtracts from revenues to determine a company’s gross profit. The lower the price of goods sold, the higher the gross profit. Consequently, a lower cost of goods sold makes an organization look more effective and efficient. A company stating the lower price of goods sold can create a more sustainable business model in a competitive market. A company looking to increase the cost of goods sold may represent the cost of goods sold to impress potential investors.

However, this does not accurately present an entity’s balance sheet and, therefore, can bring legal trouble. Sure, a firm can increase its income by attracting more investors, but the investors and other authorities can sue the company if they find out the cost of the goods is understated.

Get Financing

Small businesses often need outside financing to survive and grow in the market. A lower cost of goods sold (COGS) and a more appealing balance sheet may be necessary to impress a bank loan officer. Businesses may understate their COGS to make their business model look more attractive and their profit more sustainable, making them better loan candidates. A lower COGS makes the financial statements more attractive until it comes time to pay taxes on the earnings. 

You may impress potential investors and analysts who look only at the documents and do not delve deeper into the data. The analysis based on provided data – that is, understated cost of goods sold – can provide positive remarks regarding the performance and sustainability of an organization. Therefore, you can convince investors to invest their money in the company. Hence, some companies falsely understate the cost of goods sold to present their efficiency in managing costs and achieving higher profits.

Considerable Risk

Knowingly filing false financial statements puts a company, the signatory to the documents, and perhaps the business owner in legal jeopardy. State and federal agencies watch for irregularities in balance sheets and increasingly focus on the raw data used to compile those numbers. Fraudulently lowering the COGS or altering anything on financial documents carries a considerable risk of fines, prison terms, or both. Although the underlying cost of goods sold is illegal and risky, some companies do so to attract different stakeholders.

Legally Minimizing COGS

Companies can value their inventory in a way that legally minimizes the cost of goods sold, depending on the nature of their business. The first-in, first-out (FIFO) method determines the COGS by manipulating the prices of the oldest inventory first. This may or may not objectively be the optimum strategy, depending on the kind of business. 

For example, a company that sells rare coins may have won a particular item for $100 at auction and later spent $1,000 to acquire another. If the business then sells that coin for $900 as part of a promotion, the FIFO method would show an $800 profit, taking the cash that costs $100 to acquire out of inventory. The last-in, first-out inventory value method would record the same transaction as a $100 loss by removing the $1,000 coin from stock.

Conclusion

In conclusion, while understating the cost of goods sold may offer short-term benefits such as increased income and improved prospects for financing, it poses significant long-term risks. Violating accounting standards and rules can lead to legal troubles, fines, and loss of trust from stakeholders. Despite the temptation to manipulate financial data, companies must prioritize transparency and integrity in their reporting practices to ensure sustainable growth and compliance with regulations. Additionally, while there are legal ways to minimize the cost of goods sold, such as using inventory valuation methods like FIFO, companies must exercise caution and ensure they adhere to ethical and legal standards in their financial reporting.

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.

No person or organization is safe from cybersecurity risks. In today’s world, it is nearly impossible to escape them. Therefore, every individual and business owner should proactively build a safe and secure environment for their employees, associates, customers, and other users. A safe corporate environment reduces the risks that cybercriminals pose to a business. Below are a few innovative ways to minimize information and data security risks to your computer systems.

Train Your Employees in Cybersecurity

Bookkeeping is essential for financial recording, so it is vital to set aside time to educate your employees about cybersecurity, be brilliant online, and identify scams such as suspicious emails and websites.

Take advantage of antivirus and antispyware software for each computer.

Ensure you always have an updated version of powerful antivirus software on all your computers and devices so that no device becomes infected.

Avoid Skipping the Firewall

Firewalls are critical to keeping cybercriminals out of your devices. It is good to get a network firewall if you have more than five computers to protect your overall network.

Obtain Necessary Backup Copies of Vital Data

Without necessary data backups, you will be in a significant bind if you lose your organization’s valuable data and records because of a cyber breach. At least one of your data backup sets must be kept off-site in a secure place so that only a few reliable and trusted individuals can access them. Experts suggest locking up your critical business backup data.

Secure Your Wi-Fi Connections

Wi-Fi networks are usually easy ways for cybercriminals to obtain access to confidential content. Thus, all your Wi-Fi networks must be robust and complex enough to reduce your risk of this happening. Consequently, using unique and numerical characters cannot harm, either.

Ensure Robust Control Over Access to Your Business Computers, Networks, and Other Devices

You are bound to have seen thriller movies where a cybercriminal fakes their identity and then attacks a server, stealing sensitive data by copying it onto a USB in minutes. Sure, that’s Hollywood for you. However, it happens in real life more than we would like to admit. Thus, always ensure you know who is coming in and out of your company premises. In addition, do not permit individuals to play with your systems that contain essential data files.

Create an Individual User Account for Each Employee

Having every employee use their official accounts to perform their jobs on your business computers makes sense. It ensures easier tracking of who is performing what activity online, and an individual account is a security measure that will be beneficial in many ways.

Keep a Password Policy in Our Organization

An easy tactic to safeguard your devices is to secure them with good passwords. A password policy will encourage all employees to change their account passwords quarterly and make guessing challenging. As mentioned earlier, it is imperative to build passwords using letters, numbers, and special characters simultaneously, which makes it harder to crack the code. Consequently, passwords must be easy to remember but hard to guess.

Limit Authority to Install or Uninstall Software

Even if one of your employees’ user devices is compromised, a hacker will not download or delete software if you have limited authority. Only authorized staff must install software applications on your company’s devices to ensure a safe and secure environment.

Leverage Cyber Liability Insurance

Cyber insurance will protect you from system failures, cyber extortion, and breaches in your business computers in case of a cyber breach or data hack. Suppose your company heavily depends on its business computers, servers, and devices or stores personal client information. In that case, adding a cyber policy to your company’s insurance plan is a good idea.

Conclusion

In conclusion, cybersecurity threats are ubiquitous today, affecting individuals and organizations alike. Every business owner must take proactive measures to create a secure environment for employees, customers, and users. By implementing robust cybersecurity practices, such as employee training, firewall usage, data backups, Wi-Fi security, access control, individual user accounts, password policies, software restrictions, and cyber liability insurance, businesses can mitigate the risks posed by cybercriminals and safeguard their valuable data and assets.

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.

As a consumer, you most likely know how to manage your personal credit. However, as a new business owner, you might not be able to establish business credit. Your credit score will not assist you if you require business financing at any point. Instead, a strong business credit history will be needed. 

Business credit performs the same function as personal credit by measuring trustworthiness. Credit bureaus collect information from vendors, banks, and other business partners to measure your solvency and allot you a score which, unlike a personal credit score, ranges from 0 – 100.

Importance of Business Credit

Just as the strength of your credit score determines the kind of credit products you are eligible for and their terms and conditions, a business credit score is a vital component in measuring your métier as a business. Your business partners want a reliable track record of payments and other financial handling. Your business credit score allows them to make informed decisions about your business; therefore, a good credit score can open the doors to positive and enduring credit in the future.

Establishing Business Credit

While establishing business credit may seem difficult for a start-up, here are some ways to do that without much hassle.

Establish a Business Entity

As mentioned, your aim should be to reflect your payment history on your business accounts rather than personal ones. Therefore, it needs to be a separate and registered entity. Your aim should be to identify the entity that offers you the best solution for your needs and creditworthiness.

The two most common options are sole proprietorship and partnerships, as they are easier to manage initially. However, these entities are independent. If you have chosen a sole proprietorship or partnership, it may be hard to differentiate and establish business credit as a separate entity. Both structures do not specifically distinguish between an individual and a business. Therefore, it is unable to help you in developing business credit. 

The proper structures for establishing business credit are a ‘C Corporation,’ ‘ S Corporation,’ or an ‘LLC’ (Limited Liability Corporation). While it is important to think of a structure that suits your need to build credit, it is not the only thing that matters because the right business structure depends on many other factors.

Obtain a Federal Tax ID

The Internal Revenue Service (IRS) relies on an employer identification number (EIN) to monitor businesses, especially queries related to employee payroll expenses. Every company must get this number as it performs various essential functions and establishes business credit simultaneously. You will be required to apply with your state or county government office.

Establish a Dedicated Business Address and Phone Number

While it may sound simple, setting up a dedicated office for your business and a landline establishes your credibility, which eventually positively affects your credit score. You can register with business directories, and being listed can add a few points to your credit report. A phone line can establish business credit by developing a formal trade credit relationship with your vendors and other business acquaintances, which credit companies consider a good sign.

Institute Trade Lines with Suppliers

Maintaining good relations with only a handful of vendors and suppliers suits your credit score. However, to enhance it, you must develop good credit relations with various business partners. As your small business grows, you can engage with many different suppliers that will open multiple tradelines for you. It will also be beneficial if your partners extend credit and allow you to pay after weeks or months, as this shows their trust in you, which is excellent for establishing business credit.

Conclusion

As a small business owner, you must realize that building credit will take time. If you get the basics right, you will be competitive in your industry. Pay off your business loans and bills on time and follow the guidelines above to ensure that you are on the right credit-building track.

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.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

Master Small Business Accounting: Key Primers for Success

Primers in small business accounting are the foundational financial systems and practices—including business registration, accounting methods, bookkeeping processes, and tax compliance strategies—that create the framework for sustainable business growth and informed decision-making. These essential building blocks determine whether your business thrives with clear financial visibility or struggles with costly mistakes and missed opportunities.

Over my 20 years as CEO of Complete Controller, I’ve witnessed firsthand how the right accounting primers transform chaotic startups into streamlined enterprises. From working with tech startups navigating rapid growth to retail businesses managing inventory complexities, I’ve seen that businesses implementing proper accounting primers from day one are 40% more likely to survive their first five years. This guide reveals the battle-tested strategies that have helped thousands of our clients build financially resilient operations, including specific tools, decision frameworks, and real-world applications that will equip you to make confident financial decisions and scale your business effectively.

What are accounting primers, and why do they matter for small business success?

• Accounting primers are foundational financial practices including business entity selection, accounting method choice, bookkeeping systems, financial reporting processes, and tax compliance strategies
• Business entity selection determines your personal liability exposure and tax obligations
• Accounting method choice (cash vs. accrual) affects when you recognize income and expenses for tax purposes
• Bookkeeping systems create the infrastructure for tracking every financial transaction
• Financial reporting processes provide visibility into profitability, cash flow, and business health

Business Registration: The First Critical Primer

Choosing your business structure sets the foundation for everything that follows—from tax obligations to personal liability protection. The surge in entrepreneurship post-pandemic has been remarkable, with 16 million new U.S. business applications filed between 2021-2023, representing a 56% increase over pre-pandemic levels.

Your entity choice creates ripple effects throughout your financial life. A sole proprietorship offers simplicity but leaves personal assets exposed, while forming an LLC or corporation provides liability protection at the cost of additional compliance requirements. One of our retail clients discovered this lesson painfully when they faced a $15,000 tax bill after operating as a sole proprietorship instead of an S-corporation—a decision that could have saved them thousands in self-employment taxes.

Key Entity Considerations:

1. Sole proprietorships expose personal assets but offer pass-through taxation
2. LLCs provide liability protection with flexible tax treatment options
3. S-corporations can reduce self-employment taxes but require stricter compliance
4. C-corporations enable raising capital but face double taxation

The timing of your entity selection matters too. Many businesses start simple and evolve their structure as they grow, but retroactive changes can trigger unexpected tax consequences. Working with both legal and tax professionals during registration prevents costly restructuring later.

Cash vs. Accrual Accounting: Selecting Your Financial Language

The accounting method you choose fundamentally changes how you view your business’s financial health. With 64.4% of small businesses now using accounting software to manage their finances, selecting the right method becomes even more critical as it determines how your software tracks and reports transactions.

Cash accounting operates on a simple principle: you record income when payment hits your bank account and expenses when money leaves. This method works beautifully for service businesses with straightforward operations. A consulting firm earning under $5 million annually can benefit from the clarity of knowing exactly how much cash is available at any moment.

Accrual accounting tells a different story—one of economic reality rather than cash position. You record revenue when earned and expenses when incurred, regardless of payment timing. This method reveals the true profitability of long-term projects and helps businesses with inventory or extended payment terms understand their actual financial position.

Method Selection Framework:

1. Choose cash accounting if your business has simple operations and earns under $5 million annually
2. Select accrual accounting for inventory-based businesses or those with complex revenue streams
3. Consider hybrid approaches for specific situations like long-term contracts
4. Evaluate tax implications—cash method may defer income recognition

WidgetCo’s experience illustrates the power of choosing correctly. This manufacturing business saved $1 million in tax deductions by switching from accrual to cash accounting, timing the change to maximize deductible expenses in a high-revenue year. The lesson? Your accounting method isn’t just a technical choice—it’s a strategic tax planning tool.

Building Your Financial Command Center

Creating a robust accounting system transforms overwhelming financial data into actionable business intelligence. The foundation starts with your Chart of Accounts—a customized listing of every account where money flows in or out of your business.

Think of your Chart of Accounts as the filing system for your financial life. Income accounts track revenue streams, expense accounts monitor where money goes, and balance sheet accounts show what you own and owe. The key is finding the sweet spot between detail and simplicity. Too few accounts and you lose visibility; too many and you drown in data.

Essential System Components:

• Chart of Accounts customized to your industry
• Bank reconciliation processes performed monthly minimum
• Document management system for receipts and invoices
• Automated data entry through bank feeds
• Regular financial review meetings

Technology amplifies these makeup base products by automating repetitive tasks. Cloud-based platforms like QuickBooks (used by 69% of small businesses) or Xero (11%) provide real-time financial visibility from anywhere. But software alone isn’t enough—you need consistent processes to maintain data integrity.

I’ve trained countless clients to implement daily financial dashboards, transforming their responsiveness to business changes. One e-commerce client discovered inventory theft only because their daily dashboard showed unusual cost variations. Without that systematic review, the losses could have continued for months.

Bank reconciliation stands as your financial truth detector. By matching your accounting records to bank statements monthly (or weekly for high-volume businesses), you catch errors before they compound. This simple practice has saved our clients from everything from duplicate vendor payments to undetected fraud.

Mastering the Financial Reporting Trinity

Three financial statements form the core of business intelligence: the income statement, balance sheet, and cash flow statement. Together, they tell the complete story of your business’s financial health, each offering a unique perspective on performance.

The income statement reveals profitability over a specific period, showing whether your business model actually makes money. But profit doesn’t equal cash—many profitable businesses fail due to cash flow problems. That’s where the cash flow statement becomes critical, tracking the actual movement of money through your business.

Advanced Reporting Strategies:

1. Create customized KPI dashboards tracking metrics like gross margin and customer acquisition cost
2. Implement rolling 13-week cash flow forecasts for face primers for oily skin
3. Develop scenario planning models for different growth trajectories
4. Automate report generation for consistent monthly reviews

Your balance sheet provides the snapshot—what you own (assets) versus what you owe (liabilities) at a specific moment. This statement reveals your business’s financial strength and borrowing capacity. Banks scrutinize balance sheets when evaluating loan applications, making accuracy essential for growth financing.

Beyond basic statements, successful businesses leverage advanced analytics. Gross margin analysis by product line reveals which offerings truly drive profitability. Customer lifetime value calculations inform marketing spend decisions. Inventory turnover ratios highlight efficiency opportunities. These color-correcting primers for redness transform raw data into strategic insights.

Tax Compliance: From Burden to Strategic Advantage

Tax management extends far beyond annual filing—it’s an ongoing strategic process that can significantly impact your bottom line. Small businesses that fail to file taxes on time face penalties up to 5% monthly, maxing out at 25% of unpaid tax, making proactive compliance essential.

Employee classification stands as one of the most common and costly mistakes. Misclassifying employees as contractors can trigger massive penalties, back taxes, and interest charges. The distinction isn’t just about control—it involves multiple factors including behavioral control, financial control, and the type of relationship.

Strategic Tax Management:

1. Implement quarterly tax planning sessions, not just year-end scrambles
2. Maximize depreciation strategies through Section 179 and bonus depreciation
3. Track home office deductions with dedicated oil-free makeup primers
4. Understand state nexus rules for multi-state operations
5. Document all business expenses contemporaneously

One Complete Controller client discovered $10,000 in annual tax savings simply by correcting their depreciation schedules. They had been using straight-line depreciation on equipment eligible for accelerated methods, missing significant first-year deductions. This example illustrates how silicone-based primers create competitive advantages.

State and local tax compliance adds another layer of complexity. With remote work expanding business boundaries, understanding nexus rules becomes critical. Selling products online might create tax obligations in multiple states, each with unique filing requirements and deadlines.

Scaling Your Accounting Infrastructure

Growth brings complexity, and your accounting system must evolve accordingly. The practices that work for a sole proprietor won’t support a multi-location operation with dozens of employees. Successful scaling requires building best primers for dry skin before you need them.

Multi-currency capabilities become essential for businesses expanding internationally. Exchange rate fluctuations can significantly impact profitability, requiring sophisticated tracking and hedging strategies. Audit-ready documentation practices protect against future scrutiny while enabling faster due diligence during investment rounds or acquisitions.

Growth-Ready Practices:

1. Implement role-based access controls in accounting software
2. Create documented procedures for all financial processes
3. Build redundancy into critical financial roles
4. Establish internal controls preventing fraud
5. Develop management reporting beyond basic financials

The transition from DIY bookkeeping to professional support marks a critical growth milestone. Many business owners resist this shift, viewing it as losing control. In reality, delegating routine bookkeeping frees you to focus on strategic financial decisions. Beauty salon owners in Baltimore who adopted computerized accounting systems increased their 5-year survival rates by 40%, demonstrating technology adoption as a growth catalyst.

Common scaling mistakes include maintaining personal and business expense commingling long after incorporation, ignoring regular financial reviews in favor of operations focus, and underinvesting in financial talent. Each creates hidden friction that limits growth potential.

Real-World Applications: From Theory to Practice

Throughout my career at Complete Controller, I’ve witnessed remarkable transformations when businesses implement these primers systematically. A retail startup client reduced overstock costs by 20% after implementing accrual accounting and improving inventory visibility. They could finally see the true cost of holding slow-moving inventory and adjust purchasing accordingly.

Another client, a professional services firm, transformed their cash flow by implementing progress billing tied to project milestones. By moving from monthly billing to milestone-based invoicing, they reduced their cash conversion cycle from 67 days to 31 days. This change alone freed up enough working capital to hire two additional team members.

Implementation Success Factors:

1. Start with one area and perfect it before expanding
2. Invest in training—your team must understand the “why” behind processes
3. Schedule regular reviews to catch issues early
4. Celebrate small wins to build momentum
5. View accounting as strategic intelligence, not compliance burden

The most successful businesses I work with share a common trait: they treat financial primers as non-negotiable operating systems rather than administrative overhead. They understand that strong financial foundations enable everything else—from securing growth capital to making confident strategic decisions.

Moving Forward with Financial Confidence

Mastering these accounting primers positions your business for sustainable success. Strong financial foundations aren’t just about avoiding problems—they’re about creating opportunities. When you know your numbers, understand your cash position, and maintain compliance, you make decisions from strength rather than uncertainty.

The journey from financial chaos to clarity doesn’t happen overnight, but each primer you implement compounds into greater control and confidence. Whether you’re just starting or scaling an established operation, these foundational practices provide the framework for achieving your business vision.

Take action today by assessing which primer needs immediate attention in your business. Start there, build momentum, and systematically strengthen each area. For personalized guidance on implementing these strategies, connect with our expert team at Complete Controller to accelerate your path to financial mastery.

FAQ

What’s the best accounting method for a freelance consultant earning $75,000 annually?

Cash basis accounting typically works best for freelancers and consultants earning under $5 million annually. It offers simplicity in tracking income and expenses while providing clear visibility into actual cash position. However, if you have significant equipment purchases or want to defer income for tax planning, consult a CPA about potential accrual method benefits.

How often should I reconcile my business bank accounts if I process 50+ transactions weekly?

With high transaction volume, weekly reconciliation prevents errors from compounding and makes month-end closing smoother. Set aside 30 minutes each Monday to match the previous week’s transactions. This frequency also helps detect fraud or errors quickly, potentially saving thousands in losses.

Can accounting software like QuickBooks automatically calculate and file my sales tax?

Yes, modern platforms including QuickBooks, Square, and Xero offer automated sales tax calculation based on transaction location and product type. Many also integrate with tax filing services to automate returns. However, you remain responsible for accuracy, so review calculations monthly and understand your nexus obligations.

What should I do if I’ve been mixing personal and business expenses in my Chart of Accounts?

First, stop immediately—open a dedicated business bank account and credit card. Then, work backwards through your records, categorizing each transaction as business or personal. Adjust your books accordingly and consult a tax professional about potential amended returns. Going forward, maintain strict separation to preserve liability protection and simplify tax filing.

When is the right time to transition from cash to accrual accounting?

Consider transitioning when your business has inventory, offers credit terms to customers, receives prepayments for future services, or approaches $5-10 million in revenue. Work with an accountant to restate prior period balances and time the switch for minimal tax impact—typically at the beginning of a tax year.

Sources

• CarsonThorn CPA. “Small Business Accounting 101.” https://carsonthorncpa.com/small-business-accounting-101
• IRS.gov. “Small Businesses & Self-Employed.” Internal Revenue Service. https://www.irs.gov/businesses/small-businesses-self-employed
• Investopedia. “Income Statement Guide.” https://www.investopedia.com/terms/i/income-statement.asp
• Nerdwallet. (2023). “Small Business Statistics.” https://www.nerdwallet.com/article/small-business/small-business-statistics
• Plantemoran. (2021). “Simplified Accounting Methods for Small Business Taxpayers.” https://www.plantemoran.com/explore-our-thinking/insight/2021/02/simplified-accounting-methods-for-small-business-taxpayers
• Rippling. “10 Tips on How to Manage Small Business Finances.” https://www.rippling.com/blog/small-business-finances
• SBA.gov. “Manage Your Business Taxes.” U.S. Small Business Administration. https://www.sba.gov/business-guide/manage-your-business/manage-your-taxes
• Sodowsky Law Firm. (2024). “Small-Business Tax Penalties.” https://sodowskylaw.com/small-business-tax-penalties
• Statista. (2016). “Small Business Accounting Software Adoption.” AccsaGlobal. https://accsaglobal.org/facts-and-statistics
• Stripe. “Accounting for Startups 101.” https://stripe.com/resources/accounting-for-startups
• SUNY Empire.edu. “Bookkeeping 101.” https://www.suny.edu/bookkeeping-101
• Walden University. (2021). “Strategies to Transition to Computerized Accounting.” Bullock, Y. https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=11298&context=dissertations

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.

Every business owner new to the restaurant industry must be familiar with its fundamentals. The restaurant industry is one of the most challenging industries to be successful in, so it would be wise to educate yourself in all aspects. If you are in the food servicing business or a restaurant owner, you must track and evaluate specific performance metrics over time to understand your business’s status. Restaurant owners who regularly calculate their business performance metrics can easily identify areas for improvement and catch negative trends.

Where do you get the information to calculate your business performance metrics? Bookkeeping will help you provide all the necessary and relevant information from which all your accounts are formulated. Bookkeeping is a recognized and well-defined process in business and accounting. Whatever the nature (purchase or sale) of each transaction, it must be recorded. Bookkeeping helps ensure accurate and timely records.

However, increasing a business’s profitability and efficiency does not happen overnight. Operating a restaurant involves:

• Many moving parts.
• Many different revenue channels.
• Costs.
• Factors that eventually influence the net loss or profit.

One cannot expect to make a change in one area and see all margins and operations improve. In fact, running a profitable enterprise requires constant testing and modification until best practices are found for the business. 

Below are two important metrics to calculate and use to help a new restaurant owner measure and improve performance. 

Break-Even Point

One of the first performance metrics you should calculate is your break-even point. This figure will identify precisely how much you need in sales to earn and recuperate your investment. The break-even point figure can also be used to forecast the time it will take you to receive and earn back that money. Break-even is one must-have performance metric to investigate if you wish to invest in a new restaurant.

Break-even can also justify large purchases, such as launching a brand-new marketing campaign or a commercial kitchen remodel. Claiming the purchase will cost $30,000 is one thing, but considering that the recovery will take four months is a more realistic measurement of investment.

Calculating the Break-Even Point

Sales of one month = $10,000

Variable costs = $3,000

Fixed costs = $4,000

Break-even point = $5,714.29 for the month

However, this means you will start earning your profit after selling $5,714.29 worth of drinks and food.

The equation for the break-even point is:

Total Fixed Costs ÷ ((Total Sales – Total Variable Costs) / Total Sales) = Break Even Point

In this case, $10,000 – $3,000 = $7,000.

$7,000 / $10,000 = 0.7, and

$4,000 divided by 0.7 gives you $5,714.29.

Cost of Goods Sold (COGS)

The cost of Goods Sold (COGS) denotes the cost needed to produce the beverage and food items that you will sell to your guests. Thus, the COGS is just a depiction and sign of the restaurant’s inventory for a definite period.

You must keep track of your COGS because it is one of the major expenses a restaurant must sustain. Certain ways are identified to minimize these costs, including picking in-season ingredients or reaching an agreement with the food distributor on better rates. Every dollar saved on COGS is a dollar towards the restaurant’s gross profit.

Calculating the Cost of Goods Sold (COGS)

Inventory at the start of the month = $5,000

Purchase of another inventory = $2,000 in the month

Ending the month of inventory worth left over = $4,000

The cost of goods sold for the month will be:

$5,000 + $2,000 – $4,000 = $3,000

The equation for Cost of Goods Sold (COGS) will be:

Beginning Inventory + Purchased Inventory – Final inventory = Cost of Goods Sold (COGS)

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.

Local grocery store owners have gradually learned to create clear points of differentiation, essential for establishing their prices and value-based services. Most retailers have faced challenges maintaining their costs and profitability, especially if the economy is in a recession. Additionally, some of the challenges grocery store owners face are related to competitive markets, the establishment of mega-stores like Walmart and Target, the recession, and the fluctuating incomes of the general population.

Small grocery stores face tough competition from rival companies with supermarket and store chains spread across the country. Store owners struggle to compete with larger, rival stores with better resources. Below are various challenges small grocery store owners face and how they can overcome the challenges impacting their profitability.

Competitive Retail Mega-Stores

Grocery stores in the same locality have been competing for a long time, but these small stores rarely threaten the other’s profitability. However, it is a different scenario when large, mega-store chains pop up in the neighborhood and grab the same customers’ attention. 

Often, customers are willing to go to large stores because the store owners offer products at slightly lower prices. Larger department stores can reduce prices and pass those savings on to customers. However, this gives them a significant advantage over small to medium-sized retailers who do not have the flexibility to adjust prices. To overcome large retailers’ challenges, grocery store owners can target a specific niche and cater to that market. For example, local store owners can offer specialty items that large retailers fail to provide. A small retailer can carry items that a specific demographic finds appealing, which could help them regain a significant market share.

Reduce Resources and Streamline Operations

Mom-and-pop grocery stores spend more resources than large retail stores, significantly reducing profitability. To increase their profitability, small grocery store owners are encouraged to cut expenses. This can be done by streamlining store operations and hiring qualified employees.

Stores can also overcome profitability challenges by merchandising the shelves and making shopping carts available for customers as they arrive. Store owners can invest in a cart system that requires shoppers to put in cash, and the amount is refunded to those customers when they return the carts. This cart return system would streamline the cart-gathering process and use limited resources and human capital otherwise dedicated to this task.

The Cost of Labor

Grocery stores have a lower profit margin compared to large retail store chains. To improve their profitability, grocery store owners must rely on different ways to reduce their operations. The labor cost is one of the most significant expenses that grocery store owners must cover. However, grocery stores can control their labor costs.

It is important to note that cost-cutting must not be so extensive as to hurt the store’s daily operations. For example, cutting labor costs to an extent so that there is inadequate staff to clean up, arrange the shelves, or cater to the customers should be avoided.

Training employees to perform their duties correctly can also overcome labor costs. A fully trained employee can handle their responsibilities better than untrained staff. Similarly, employees will be able to complete tasks quickly and efficiently.

Abandon Unproductive Processes

Unplanned processes are often counter-productive; grocery store owners must eliminate any inefficient processes that do not increase profits. Perform an audit and see what products sell out slower than the rest. Removing these products from shelves will help eliminate the entire supply chain that costs the store more, bringing in much-needed revenue.

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.