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Keeping your books is not just about preparing for tax filing or tax savings; there is a lot more to it. A lot of critical decisions about the business are made based on the information offered in financial statements. Some might consider bookkeeping to be something that can be done by anyone. However, maintaining accurate records of business financials is not an ordinary task and requires skills and expertise. Businesses outsource professional accounting and bookkeeping services for this job because they consider it important and understand the significance of doing it right. Here are some of the reasons why business accounting tasks should be taken seriously.

Corporate Veil and Bookkeeping

The corporate veil is a legal concept that separates a corporation from its shareholders and protects them from being personally liable to company debts and obligations. When you maintain separate books for each subsidiary of the business, it demonstrates that you have recognized it as a separate entity and, therefore, everything related to the entity is a business of its own. Also, when you keep your personal and business finances separate, it makes it easier for you and the auditors to accurately measure the business performance.

Cutting Corners

Unfortunately, this is an approach that many new business owners opt for and it inexorably comes back to bite them. Accurate bookkeeping is indispensable for tracing the growth of your business and legal/tax purposes. Legal business demands you to maintain an accurate measure of cash flows, expenses, labor costs, and revenues. Cutting corners to save time and money must not be an option and should be avoided at all costs.

Audit and Tax Protection

Every business, whether big or small, has to go through IRS auditing. This can be really bad for you if your books are not well maintained. Discrepancies in financial records will be noted by the audit team and you can face potential charges from the IRS. These charges can result in you paying heavy penalties or fines and, in some cases, even lead to the closure of your business. This is certainly a situation that must be avoided. Appropriate bookkeeping is the only way to avoid such scenarios. 

The amount of taxes that you have to pay depends on the revenues generated by your business. Professional accounting procedures ensure that you pay payroll taxes as well as prepare the documentation for filing your taxes on time. If you have maintained your books properly, you can search for legal ways to reduce the tax burden, which is quite possible given you understand accounting practices. If you are not adept at accounting, it is recommended to hire a professional to assist you with this task.

Bookkeeping Leads to Improved Decision Making

The success of any business depends on its ability to interpret the given information accurately and make informed decisions based on the provided knowledge. The best source of information for any business is its financial records which include expense tracking, budgeting, income statements and sale reports. Any inaccuracy in these records will mean that your decisions are based on imprecise information and that can have disastrous consequences. Whether you are handling the bookkeeping needs internally or have outsourced the job, you must ensure that the highest standards are followed in their compilation. As a business owner or manager, it is your duty to find someone who is capable enough to perform this important task for you.

Automating the Process

The evolution of technology has simplified most tasks that were thought to be complicated just a few short years ago. Using automated bookkeeping services, such as QuickBooks, automates most of the tasks that were previously handled manually. This means that the tasks are completed efficiently with less resources than previously required. You will notice a significant fall in costs related to bookkeeping. You won’t have to spend surplus payroll money on a full-time staff bookkeeper to handle the job, as the automated software will:

  • Keep essential information at your fingertips
  • Efficient use of online banking
  • Better collection of receivables
  • Track real-time receipts and invoices
  • Give you access to financial information on the go

In conclusion, don’t be naïve and laid back about managing your books. Take charge of your business with the help of these vital tips.

Check out America's Best Bookkeepers
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 QuickBooksTMProAdvisor’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.

 

 

 

 

 

 

 

 

 

Leadership Concepts on Touch Screen
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.

Check out America's Best Bookkeepers
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 QuickBooksTMProAdvisor’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.

 

 

 

 

 

 

 

 

Level Up concept as a progress symbol for business success or personal growth aspiration as a cliff and a tree shaped as an arrow with 3D illustration elements.

Managing Business Finances

Business finance is a very crucial term in corporate finance and accounting that encompasses a wide range of disciplines and business activities regarding management of money and other valuable financial assets. It teaches us about effective management and utilization of financial resources, investing strategies, accounting methodologies, and effective debt management. In short, it defines the fate of the business and long-term growth and profitability of any company.

Significance

In order to survive in an extremely competitive environment, businesses need to maintain their financial resources effectively or else pack their bags and go home. In the demanding era we live in, business finances works just like oxygen for survival, stability, strength, consistency, and growth. In short, money keeps your business running and your employees working to attain business goals and objectives.

However, the influx of money needs to be assured at the hour of need or your business may face a financial crisis which may eventually lead to overall business failure. Some of the most common ways in which a business can be financed or money can be raised include business loans, private loans (family or friends), mortgage loans, crowdfunding, etc.

Critical To Business Success

Entrepreneurs or business adventurists around the globe face a lot of difficulties in generating business finances for their unique business ideas. But, even those who manage to generate desired finances often strive to maintain or manage their money—perhaps due to the lack of financial knowledge or management of money related skills. They may have scarce resources but hiring a professional accountant or bookkeeper seems to be a smart choice. This allows them to concentrate on core affairs of the business while their bookkeepers take care of the rest (money related matters). Looking at the sensitivity of the matter, it is indispensable in managing business finances effectively for maintaining a sustainable competitive advantage.

5 Crucial tips to Keep your Business Finances In Order

Get Yourself Ready For the Tough Job Ahead

In order to survive in a volatile economy, you need to come up with new and effective ways to get things right—the very first time. No one is a born genius, it’s your motivation, inspiration and result-oriented approach that encourages you to learn the art of the game before taking on challenges head-on. For managing the finances of a business, you need to educate yourself and get ready for the tough accounting job ahead, as financial recording is no easy feat. The entire fate of a company is dependent on financial recording and analysis—the better they are, the higher the results. This makes it clear that the management and bookkeeping of business finances requires accounting knowledge, skills and, hence, a complete accounting know-how for keeping finances in order and perfectly streamlined.

Keep Your Personal and Private Finances Separate

For developing more command and control over your personal and business finances, you need to deal with them separately in order to avoid confusion. The outflow of cash has to be managed well for keeping a proper track of your business transactions. This will not only help where your money is going but also helps when submitting tax returns at the end of the term. Small businesses often find themselves strangled in sorting between business and private finances as they lack awareness, accounting knowledge, experience, and expertise in dealing with money related issues. By sorting this out, you will have the exact status of your money.

Choose a Suitable Accounting Software

All salutations to superior accounting tools and techniques that have made things a lot easier than traditional and manual ways of recording business transactions. If you haven’t yet moved to cloud technology for maintaining a real-time track of your money and resources, we suggest you do it right away. Today, you have a myriad of options to choose from, however, integrating the right accounting software or technology is crucial.

Hire a Professional Bookkeeper

You may have a basic level of accounting knowledge and experience in keeping transaction records which may not actually be enough for your business. In order to effectively manage each and every thing related to your business finances, you must consider hiring a qualified and reputable bookkeeper. This will not only help you solve financial discrepancies but will also help you save a lot of money in the end.

Make a Budgeting Plan

By creating a budgeting plan, you will get things aligned and more organized than ever. Business budgeting is a necessary evil, which means that no matter how far you run away from it, you still have to create it. This allows you to know the business expenses and see whether they need to be cut if they are exceeding the limit or need to be financed with more money.

Conclusion

It is true that a lot of business owners do not keep records of their business finances or, even if they do, they are most often in a disorganized or cluttered form. In order to establish 100% command and control over your business, you need to manage your finances and cash flow carefully. It is better to hire a qualified bookkeeper for achieving intended outcomes and pave your way to business success.

Check out America's Best Bookkeepers
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 QuickBooksTMProAdvisor’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.

beautiful brand new european restaurant in downtown
Perhaps you have dreamed of owning a restaurant for years or maybe you never dreamed you would ever get into the industry.  Whatever the journey, owning and managing a restaurant is a tough job.  In order to survive any length of time, not only must you serve a delicious cuisine, you must also stay on top of your finances.  We will discuss the warning signs that may warn you that your restaurant business is in financial hot water.  These red flags are any kind of dangers that could damage your restaurant’s productivity and lower the generated revenue. 

1. Absence of an Efficient Bookkeeping Framework

The first and most critical snippet of data that is asked for when assessing the financial soundness of a restaurant is a duplicate of its bookkeeping programming record (most commonly a QuickBooks reinforcement document).

Printed duplicates of essential money related articulations (Profit and Loss and Balance Sheet) are not sufficient for this undertaking since they do not confirm the accuracy of the numbers exhibited. Just by checking on how all of the budgetary exchanges are really “posted” to the General Ledger will determine the level of precision of the numbers delivered. Since you cannot oversee what you cannot tally, a restaurant whose bookkeeping framework (or scarcity in that department) is not legitimately setup and actualized frequently will result in a restaurant proprietor that is “flying visually impaired”.

2. High Key Working Costs in Respect to Net Deals

Food and drink purchases, along with work costs such as compensation,  manager paid assessments, and advantages, represents 62-68 pennies of every dollar in restaurant deals. The consolidated aggregate of these two cost classes, alluded to as your restaurant’s “Prime Costs”, is where the fight for gainfulness is genuinely pursued. This is not only in light of the fact that they speak to the biggest level of your aggregate costs, but also since you can control them. Unlike utility and protection costs that are generally settled, you can specifically affect your nourishment cost rate by more powerful acquiring, item dealings, and menu evaluating. Thus, employing works on the format of your kitchen and the way your menu items are chosen can positively affect work costs.

3. Menu Items are not Precisely Archived, Cost, and Refreshed

The most widely recognized strategy for menu item valuing that has been used throughout the years is known as the ‘relative approach’. Check a couple of different restaurants that you contend with, locate a comparable item on their menu, and value your item likewise. It’s one thing to record and cost out your menu to figure out what your offering cost will be by considering that of your rivals. Yet, it’s very different to cost exclusively off of them. In all actuality, it takes a considerable measure of training and time to painstakingly and precisely report and cost (and re-cost intermittently as your merchant costs change) your menu items.

4. Stock levels are not Checked and Recorded in Bookkeeping Records

Most autonomous restaurant administrators confound their month-to-month food and drink purchases with their month-to-month utilization. Without knowing your start and completion inventories, you can never figure a precise sustenance cost. For a restaurant with nourishment offers of $50,000/month, a stock distinction of $1000 between the start and end of the month can convert into a fluctuation of 2%. This difference speaks to a large portion of the aggregate yearly benefit of a run of the mill full administration restaurant. You essentially cannot deal with your sustenance costs in the event that you do not recognize what they are. And, you cannot comprehend what they are if you do not check and record your stock changes.

5. Stock levels are Too High in Respect to Comparing Deals

This red flag is not as clear as the others, yet can be similarly as genuine an impediment to your restaurant’s productivity. A restaurant that conveys an excessive stock will unavoidably have higher food costs. An excessive amount of food sitting in your stock will bring about abundance squanders, over-distributing, lessened item use, burglary and will likewise tie up your most significant resource…money!

In any case, how do you decide what amount of stock is excessive or what the perfect measure of stock is? A run of the mill full administration restaurant should have close to 7 days of stock. That number can be diminished by a couple of days for very busy restaurants.

6. Financial Information is not Gathered, Researched, or Followed Up On

On the off chance that you need to be fiscally fruitful, you should be similar to restaurant chains in regards to proactive administration of your business. In a straightforward design, each chain restaurant creates some sort of daily and weekly report that abridges all of the key working information including deals (by classification), work (by division), and food/drink purchases. Starting and closing inventories and other settled costs dispensed once a day deliver a weekly gauge of the restaurant’s net benefit. You may not have the advantage of an IT staff like restaurant chains do to make these frameworks. However, with some tech, you can gather this data and utilize it to distinguish issues as they happen.

7. Incorrect Data in Your Bookkeeping Framework

A standout among the red flags is that a wide range of the financial sections are presented on the wrong records. This outcome results in monetary reports that are both mistaken and misleading. The most frequent mistakes that are seen revolve around wages, no acknowledgment of rebates or complimentary dinners, mistaken posting of offers assess gathered, blessing authentication sold recorded as income and not as an obligation, representative wages and manager paid finance charges joined as wages, recording capital costs as conventional costs, posting protection initial installments and portion installments as costs in the month paid as opposed to utilizing “paid ahead of time” records to spread them equally finished the year.

8. Current Liabilities are Higher than Current Resources

Subsequent to recording all of your weekly deals, seller bills go to your Balance Sheet and gap your present resources (e.g. money, credit card receipts in travel, debt claims, food and drink inventories) by your present liabilities (e.g. merchant charges, deals assess, rent installments and here and now credits due).

9. Depending on Bank adjust to Oversee Income

This is a simple warning to spot and shows either the absence of an appropriately working bookkeeping framework or a fundamental misjudgment of how to oversee income. Here is the motivation behind why. Your online adjust discloses how much money you currently have, but it is not always accurate. It does not represent money that has not yet cleared your record. You have to unquestionably depend on your Balance Sheet to reveal how much you have. This implies that you have to precisely record every one of your deals, all bills, and relating installments on a convenient premise.

10. Not Fully Understanding the Financial Statements

Besides not having an efficient bookkeeping framework set up (Red Flag #1), the most genuine budgetary warning is when a restaurant owner is unable to peruse and translate the three key financial reports promptly accessible by all bookkeeping programs: Profit and Loss Statement, Balance Sheet, and Statement of Cash Flows.



Check out America's Best Bookkeepers
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 QuickBooksTMProAdvisor’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.

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Effective control of a startup’s finances and the latest business management skills are two of the most important things to understand before initiating a new business. Establishing a strong financial infrastructure requires a wealth of accounting experience and wisdom. This is not an easy job to handle in order to tackle complex accounting obligations such as tax and debt repayments. An experienced financial planner or bookkeeper can greatly help you with their corporate advice. For businesses that are just starting, managing funds from day one can be an intimidating task. An entrepreneur may be good at managing their business operations. However, when it comes to finances, they often lack the money-management skills and knowledge needed.

Most start-ups underestimate the significance of managing their finances from the very beginning. Although it is true that a start-up may not witness a great deal of financial activity in the initial phases, that doesn’t mean that they don’t need to record, organize, and budget. In fact, this is the precise time that a budget needs to be created. According to studies, organizing the start-up’s financial activity is the first step towards business success.

Hire a Professional Budget Planner

Many entrepreneurs think that investing in the expertise of a professional budget planner is too expensive. However, investing a tiny portion of the initial investment pays off in the long run of a business’s journey. It is always wise to invest in something that you may lack the proper skills in. Hiring an expert for certain important tasks, such as managing finances, is ideal for business growth and prosperity.

Good news! Not every bookkeeper or financial planner is expensive. With a little research, you can find someone suitable to your business’s needs and specifications. the mismanagement of finances is the number one reason that tops the list of most common reasons why start-ups fail to survive in the market. This is why hiring an outsourced agency that is a pro at handling and managing a startup’s finances is a very smart investment.

What to Do From ‘Day One’ Of a New Business Venture

For business owners who can’t afford to hire a professional planner or financial expert, here are four tips for entrepreneurs who find it hard to manage their startup’s finances from day one.

Cash Flow Management Is Key

From day one of your new business, you need to stay on top of your cash flow. As mentioned earlier, most start-ups fail because they do not properly manage their finances. You must bookmark and maintain a record of every single penny that is coming in and going out of your business. Effective cash flow management is a vital step towards ensuring long-term success.

Track and Monitor All Spending

Start-ups can easily lose their financial control if they do not regularly track and monitor their spending. For this, you can either hire a full-time bookkeeper who will maintain, manage, and update your bookkeeping records in an accounting software to provide you with a clear picture of your start-up’s finances. Or, you can manage your books yourself. It depends on your priorities and how much you can afford to spend to get things in line.

Limit Your Expenses and Change Your Spending Habits

In the initial stages of a start-up, it is ideal to keep your fixed and variable expenses as low as possible. This is the key to longevity. By setting your business priorities right and changing your negative spending habits, you can expect to save a lot of money for your business to meet future financial needs.

Establish Financial Goals

Depending on the nature and size of your new business, you need to set monthly, weekly and daily revenue goals. Since a start-up initially needs more attention, you must stay on track to ensure profitability and make necessary adjustments for constant growth. In order to do this, you need to set your direction properly from day one and establish financial goals that are both measurable and achievable. This indicates that effective management of a start-up’s finances is critical to growth and development.

Check out America's Best Bookkeepers


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 QuickBooksTMProAdvisor’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.

Business graph
It is believed that bookkeeping, forecasting, and planning is not just for start-ups. If you do this in an ongoing business, you’re going to grow 30 percent faster, you’re going to be more prosperous, and your statistics are going to mean more. Being an entrepreneur requires a sense of self-confidence and a firm faith in your idea so that you can have the nerve to capitalize in on a dream of your own, as opposed to living someone else’s dream in a regular job.

The financial aspect of starting your own company, though, tops the list of elements that need to be considered very cautiously and require proper planning, bookkeeping and monitoring. There are steps to guide you in better organization of your finances so that you can see your dream to its end, without its surrendering due to financial issues. Financial ratios are a useful and convenient tool for measuring a company’s performance and it’s financial position. There are many benefits to entrepreneurship. You get to be your own boss, work in an industry you’re passionate about, and acquire significant rewards if that business turns into a victory. Unfortunately, entrepreneurship often involves major financial risk and, without accurate planning, a failed business can also tank your own finances.

Here are seven signs that your company is in good financial health and a few guidelines on how to set yourself up to survive the worst-case scenario of your business going under.

 

1.    Your Income Is Growing

When viewing your profit-and-loss statement, you must be able to see a fairly stable increase in your profits month after month, year after year. It doesn’t have to be an enormous spike in profitability, but even just an increase of a couple percent shows upward movement and a strong financial viewpoint.

2.    Your Expenditures Are Remaining Flat

In concurrence with your income growing, you want your costs to stay uniform. If your business experiences a substantial growth spurt, then your costs may rise but, in general, this upsurge should be in-line with your increase in revenue.

3.    Your Cash Balance Exhibits Progressive Long-Term Growth

While you may be growing your revenue, if you’re taking that cash and simply financing it back into the business, you might find yourself asset rich and cash poor. A low or stagnant cash balance means your business is not maintainable. You want to keep a good quantity of cash in the bank so that if anything emergent comes up, you aren’t in a position of having to incur more debt to meet an unanticipated expense.

4.    Your Debt Ratios Must Be Low

There are two debt ratios to pay particular attention to: a business’ debt-to-asset ratio and it’s debt-to-equity ratio. For debt-to-asset ratios, maintaining a 2:1 ratio or lower is desirable.

5.    Your Profitability Ratio Is on the Healthy Side

One of the best ratios to calculate is your profit margin. This includes taking your annual net profits and dividing it by your annual sales. So, while you may be making sales, your profit margin could still be low depending on your pricing structure, startup costs, or other elements. Your profitability ratio is measured healthy when it’s on the high side.

6.    You’re Functioning with New Clients and Repeat Customers

The charge to acquire new clients is higher than the cost to work with the same customers over and over again. A stable stream of new clients and repeat customers exhibits that your business has multiple options for producing revenue. By having contact with new customers, you can help to isolate your business from changing attitudes and buying patterns.

Final Note

Evaluating the health of your business’ finances can be as simple as reviewing a profit-and-loss statement or as complicated as analyzing all of the different elements of your business bookkeeping. But, there is very little doubt that fully understanding your business finances is a sure way to remain successful and profitable.

Check out America's Best Bookkeepers
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 QuickBooksTMProAdvisor’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.

mobile banking network. business people using mobile phone with icon application online payment.
Accounting software has made bookkeeping and finances easier than ever. With a cluster of options to choose from, the software may be used to perform almost each and every one of the complex bookkeeping tasks that were once handled manually. Moreover, the bank auto connect option enables one to import their bank statements into the accounting software of your choice. This option allows for all bank transactions to be updated automatically in bookkeeping records. However, there are exceptions to this import functionality and a few are discussed in the paragraphs that follow.

Access Denied

Despite a company choosing to use accounting software to ease the burden of keeping track of business finances, there may be restrictions imposed on access to transactions by their bank. For instance, integration of the software with the bank’s internal system may not be allowed. Moreover, the bank could refuse access to any and all business bank transactions to the software. In such a case, importing bank statements into an accounting software is likely to fail. This might as well be a safeguard or internal control implemented by the bank’s management in order to ensure secure access and security against vulnerable accounting software.

Format Unsupported

Another reason for import failure may be attributed to formatting issues that have become a serious matter worth contemplating recently. The data could be in such a format that the accounting software cannot easily import it. Depending on whether the software has a potency for adjusting to every data format, this may impede the seamless process of importing bank statements into accounting software. Therefore, it is essential that the software supports the type of format that the data entails to allow import. In addition to this, the software may not support importing bank statements for data that may be older than a few weeks. An alternate importing mechanism may have to be installed in order to do so.

Connectivity Issues

When importing bank statements into accounting software, the connection may not be supported at all times from every remote location. Since banks have implemented internal controls for safety purposes, connectivity of the software with the bank could be an issue. Imagine what could happen if accessing information from the bank was this easy. Therefore, the connection may be allowed for a limited amount of time and only at certain times, per the terms and regulations agreed upon with the bank.

Tax Separation

Another reason why importing bank statements into accounting software may fail is that the particular software is not capable of separating the tax on purchases from the transactions. Tax calculations is an essential matter for many businesses and these must be bifurcated individually in order to estimate the total tax figure. Owing to variable tax rates on different products, these taxes may not be separated out as intended or with complete accuracy. 

Dubious Accuracy

One of the most crucial issues relates to the accuracy of categorization of data. Accounting software can input data with perfection. However, categorization of each transaction is not a possibility unless a criterion for each accounting element and its class has been defined in the software. Without these, the classification of data from the bank statement may be a dubious representation by the software. Moreover, bank statements tend to provide a limited amount of information such as date, amount, and information regarding the supplier. Details are usually not recorded on statements which makes this classification even more skeptical.

Check out America's Best Bookkeepers


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 QuickBooksTMProAdvisor’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.

 

 

 

 

 

Dollars banknotes closeup. Cash Money American Dollars.Close-up view of stack of US dollars.Dollars banknotes closeup. Cash Money American Dollars.Close-up view of stack of US dollars.
When it comes to money management, keeping your business and personal finances separate can save you a lot of aggravation. Keeping a clear line of separation between the two accounts is absolutely essential for a business’s long-term growth and success. Entrepreneurs from all across the globe find it extremely hard to keep the accounts separate as most of them have to finance their start-ups by themselves, which restricts them to sketch a clear line between their personal and business accounts. Moreover, the muddling of two accounts will create a lot of difficulties, especially at tax time.

MNCs or corporations usually keep their business and personal finances separate as they have a separate legal entity. On the other hand, a sole proprietorship is not a legal entity which means taxation is done on an individual’s personal income tax returns. This indicates that all income, losses, and liabilities are tied up with you which must be ideally dealt with as a separate entity. Whether your business is of small-scale or large, you must treat it as a viable entity and deal with the accounts separately.

Some Things Just Don’t Mix Well

Certain things don’t mix well–like oil and water. Similarly, business and personal finances should be taken care of individually in order to reduce financial problems and discrepancies, tax issues and other finance-related matters. Moreover, it will also simplify things and make it more convenient for you to manage your finances. Gone are the days when businesses used to embrace a traditional approach to carry forward finances and mix them altogether. However, now, businesses adopt a more advanced approach and keep their business and personal finances separate for avoiding tax-related issues and staying on top of their game.

Why Keep Business And Personal Finances Separate?

Long story short, separating both accounts is an absolutely necessary exercise if you expect to maintain a smooth flow of business operations and activities. At tax time, a joint account can create a lot of difficulties and confusion which means you will have to separate your business transactions from your personal ones before you can file tax returns on both personal or business returns. Moreover, streamlining all crucial financial transactions requires you to create separate accounts for making payments. To create a professional feel and expect your business to be taken seriously, perhaps for getting finances and loans, you must keep your business and personal finances separate from each other.

Why Hire A Professional Accountant?

For successful money management, maximizing tax reductions, and ideal bookkeeping, you must hire a professional accountant/bookkeeper to oversee your finance-related matters. A pro-level accountant has a level of excellence that will propel your business to the next level. An experienced accountant or bookkeeper will guide you through and help you achieve your financial goals and objectives. Whether your business is of small scale or large, hiring the expertise of a notable and well-qualified accountant will help you to keep your financial books clean and clear.

Keep Your Accountant in the Loop

Prior to making and using funds to invest in your company, you must always keep your accountant in the loop. If you keep your business and personal finances separate, it will be quite easy and convenient for your accountant to suggest whether or not your investment or purchases are a good decision. For making quarterly IRS payments, you must inquire the actual status of taxes from your accountant. Close communication and collaboration will build a strong accountant-client relationship which will help your business resolve tax and financial discrepancies as well as excel on a massive scale.

Upgrade Your Accounting Software

For businesses that use accounting software to manage their money-related tasks, such as handling taxes and payroll, it is ideal to upgrade the software to a new version or get one tailor made to your business’s specifications for ideal management of internal and external finances. By keeping business and personal finances separate and integrating new accounting software with superior options, businesses can not only expect to maintain their books well, but also maximize tax reductions and avoid many accounting errors.

Check out America's Best Bookkeepers
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 QuickBooksTMProAdvisor’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.

Couple having problem with bills and money.

Like it or not, money is one of the important necessities of life. Your affordability of traveling and achieving other goals is completely dependent on the amount of money you have. By controlling and managing money, you can manage your life effectively and more efficiently. Successful managing of cash includes the sources of income, expenses and spending money according to your priority. Money management is an art and by implementing a few simple skills, money can be saved for business.

Following are the few steps to manage household finances and focus on business finances.

Establish yourself monetarily.

Your first goal in life is to work hard and establish yourself financially. But, when you do, do not become ecstatic and spend it all! Remember to make an excel sheet to monitor all of your expenses. Always make a priority list with the most needed and urgent things on top with the least needed things at the bottom. This will always help you save through each month.

Understanding your monthly income.

Monthly income always comes at the end of the month or the start of the next month. A proper budget is required to keep a record of the monthly income and its sources so that they can be well spent as well as saved until the next income comes in. Don’t waste money on temptation. Spend wisely, save, and live debt free.

Budgeting.

Budgeting is a very crucial step for financial management and an important one for a flourishing and happy household. Budgeting helps in taking control of your household finances.  Budgeting prevents debts, unexpected expenditures, and enables savings for a new car, education expenses, and retirement plans.

Controlling your cash flow.

Cut down on your expenses on gifts, traveling, and leisure. Make every member of family accountable for budgeting. Keeping track of your mortgage interest rate is also important for a smooth cash flow. Always making a shopping list before shopping helps save money and cuts the cost of unnecessary buying. Pay your bill on time so that your avoid that pesky late fee.

Eliminating debts.

Often, we tempt on taking debts from family and friends to buy something urgently without planning and then we wait for the last minute to pay the debt. This results in causing a lot of stress which further leads to other problems like a lack of concentration, bad sleep, etc.   The best way to avoid all of this is to deal with debts head on. Pay the minimum amount required to slowly cut down your balance every month so that it is less of a burden on your pocket and you.

If your debts like rent, mortgage, energy bills, etc. are over exceeded, then you can also seek advice from debt advisors.

Savings.

First and foremost, set a goal to save as much as you can.  These savings are capable of helping you in different situations of life like in an emergency, unexpected wedding, or dreadful accidents. There are many ways to save money. You can spend less to save money. Stop over-spending on gifts or that trip to Target. Save at least 1-10% of your income. You can set up a savings account and add money to that account at the beginning of each month.

Wise use of credit cards:

Credit cards are a blessing as well as a curse. Credits cards help us buy things we need without having to pay the full amount. If we are able to pay the whole amount on the credit card bill due date, then we can enjoy these plastic cards.

In the case of non-payment on the due date, these credit companies add inflated interest which will drag us into the debt mess. So, be very careful when selecting the credit card as well as the limit. 

Conclusion.

With a good budget and saving habits, your financial management will provide relief of mind and a better financial future to deal with the entire unpredictable situation that life throws at you. Staying ahead in your payments and adopting positive financial habits will result in prosperous business finances and household.

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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 QuickBooksTMProAdvisor’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.