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Businesses Fail - Complete Controller

Deficiencies in capital, business experience, resources, planning, and management structure are a few of the leading factors in business failures. An entrepreneur, having ample liquidity, but no idea of how to make and use a business model will have little to no success in running and keeping a business. Check out America's Best Bookkeepers

According to studies conducted by leading management experts, 90% of start-up businesses fail to surpass the three-year mark. This failure is often the result of poor planning and implementation. To combat this, the first step is developing a realistic feasibility plan and a balanced budget or forecast. Without a feasibility plan, one cannot be a successful entrepreneur. The inception of a business plan is essential when initiating any business and helps the business adhere to the roadmap laid out in the business model. Check out America's Best Bookkeepers

 

The purpose of the business must be evident in the planning process. It is also vital that the business owner’s experience is relevant to the use of the company. This experience will help the owner evaluate the business’s economic health during the phases of a downturn or market boom. It is equally important to stick to the budget numbers and forecast in the business plan. The owner should be familiar with the concept of project management and capital budgeting techniques. The plan should include the breakeven point of business operations and proper numbers allocated to expenses and revenue. Most businesses that fail do so because the owner did not factor in all the budgeting expenses. The incurred losses eat up the capital, and the owner has to shut down the business.

 

Careful and proper planning (non-financial) should also be kept in mind to avoid any business hiccups. Management structure plays a vital role in augmenting the purpose of the business. The business owner must ensure that the management structure comes equipped with the experience relevant to the company. A proper management structure in the organization accounts for adequate human resources in finance, inventory management, production, operation, production, and recruitment.  It is entirely up to the business owner whether the decision-making has to be centralized or decentralized. This function of the decision-making process has to be part of the management structure and in conjunction with the business model. If the numbers fall within the anticipated forecast, there is no reason for management to worry even if operations are running into losses. The core competency of management anticipates that initial failures in capturing the desired market share and wallet size will eventually lead to profit. Check out America's Best Bookkeepers

 

SWOT analysis is another feature that can help the business in preparing itself against any unforeseen circumstances. It helps in identifying the strength, weaknesses, opportunities, and threats. Understanding the market share, competitive environment, socio-cultural influence, and distribution accounts for success in any business. A business owner needs to be a visionary and exhibit positive behavior traits, both on the micro and macro level. Control over every aspect of business operation and financial expenditure should be of the utmost priority. If a business owner successfully manages to envisage the potential of business growth swiftly and aggressively, then the business operations can capture a sizeable market share.

 

To establish a business with the purpose of only existence, without a proper feasibility plan is just a sketch on paper. As earlier mentioned, a cash-rich person, without any business model, the purpose of business, and poor management structure, is just another example of business failure.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
document storage - Complete Controller

For every operating industry and business today,   Document Security is a basic need in the millennial age. Numerous cases result in the loss of relevant, valuable data faced by companies daily. Many fresh entrepreneurs who do not possess sufficient knowledge and fail to recognize the importance of document security and management cannot manage their data. As a result, they often end up losing vital data to third parties and malicious hackers.

Bookkeeping records, employee records, and relevant financial information like bank records are examples of data that can fall prey to severe online threats. If you are a business owner facing a document security issue or are only looking to opt for document security and management, make sure that you gain some insight on document security and control, as discussed in this article. Check out America's Best Bookkeepers

1-Document Security-What it is

Document security is the method in which vital data like critical records of a business are documented, saved, handled, moved down, conveyed, and in the end, discarded if they are not of use anymore.

Document storage and management require much more than merely finding a cabinet or a data storage platform. It involves considering the storage capacity, the security level it has, and how easy accessibility and retrieval of data is. Alongside, a significant issue that many businesses face while choosing a document security platform is the question of whether third parties will have control or access to the data once it is uploaded to the storage platform.

A cost-effective method used by many businesses for document storage is hiring companies offering document storage services, in the form of document storage and management platforms, instead of having to pay a lease for more space. Another primary reason that document storage should be a top priority for any business is document security.

Document security is a highly sophisticated service for document storage that requires a secure, safe facility and has individuals who have the expertise of handling, retrieving, and storing documents on behalf of other businesses/companies. Check out America's Best Bookkeepers

There are, although, some mistakes related to document storage and management that should be avoided at all costs:

  1. Documents that are not labeled or packaged in an organized manner are often tough to locate. Most facilities complete the task for businesses as they mostly provide their packaging, retrieval, and storage system.
  2. One major factor that many businesses are concerned about is the security of document storage. Most documents stored online are not as safe as they are likely to fall prey to malicious attacks on the internet. Documents are easily accessible to third parties and can be hacked despite having security. Therefore, the lack of an effective encryption method can prove to be fatal for a business.
  3. If not appropriately managed daily, document storage can get jumbled up, resulting in a troublesome and time-consuming

2- The importance of document security Check out America's Best Bookkeepers

Although document storage seems to be a bit costly and proves to be a little time consuming, it saves the document from vicious threats if they are adequately encrypted, alongside providing the ‘make life easier’ benefit.

With the use of document storage platforms, effective document management can quickly be executed as all the documents can be placed in one place in an organized manner. Businesses can store all essential documents like bookkeeping and employer records that can easily be accessed when needed.

Secondly, employees working in document storage facilities are highly trained and have security clearance to protect them by placing them in damage resistant areas.

Document storage facilities are undoubtedly the best option for effective document security and efficient management, especially for businesses that have essential data they want to secure. A cost-effective, secure, and easy to use document security system is a must for your business for executing effective management strategies.  

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
vendor management - Complete Controller

The successful management vendor management is assured by following these six steps.

Step 1: Evaluation of Process

The vendor relationship is initiated before the period when you sign the contract with the vendor. The initial step for successful vendor management requires you to possess a complete understanding of the business processes that you are willing to outsource. The business processes’ keen analysis reveals the cross-sectional departmental processes, which are unmeasured, fragmented, disconnected, and unmanaged. Check out America's Best Bookkeepers

For successful vendor management, you need to consider that there is no requirement of outsourcing the fragmented and disconnected processes. Bookkeeping is essential for making decisions related to the outsourcing of fragments. To benefit from outsourcing, you must possess a strong understanding of your business processes, and the potential outcomes of your business processes. This information will assist you in the development of meaningful performance metrics. The evaluation of the process is an ethical ingredient. It allows you to create a shared understanding with your vendor related to the management experienced and performances.

Step 2: Selection of Insources and Outsources

After understanding the processes, you should carry out the objective evaluation of the right contenders for outsourcing. Before making decisions related to outsourcing, it is crucial to evaluate whether or not the process is core- or no-core, concerning the competitive strategy.

Making a selection of insourcing and outsourcing can be extremely subjective and requires strong approaches for focusing on the areas in which you possess strong skills. Irrespective of the criteria used by you for carrying out outsourcing, it is crucial to avoid making decisions for outsourcing lightly. Once the decisions related to outsourcing and insourcing are made, it is challenging and time-consuming to bring the process back in the house. Check out America's Best Bookkeepers

Step 3: Selection of Vendor

Previously, vendors got selected on the cost alone; however, the new scenario is entirely different. It is required to consider several other factors before vendor selection. For example, it is essential to find the cultural fit between the two organizations. The cultural compatibility consists of a range of factors, such as the organizational structure, the processes considered for making decisions, the rates of changes in the processes, the time orientation, and the workforce’s age.

Other considerations, which are essential to consider while selecting vendors, include vendors’ financial stability, vendors’ working environment, and the utilization of standardized procedures.

Step 4: Development of Contracts and Negotiations

 It is essential to bring the mentality of the team towards contract development as well as for the negotiation phase. Despite leaving the outsourcing contracts to the managers and staff, the outsourcing procedure must be carried out by legal, and senior executives. The process owners and the operational staff must be involved in the initial stages, not after signing the contract. The involvement of these employees is likely to contribute to assessing the performance and ensuring that nothing gets overlooked. The contracts and negotiations must possess outlined vendor roles. The contract must be flexible enough to renegotiate specified terms and conditions.

Step 5: Management of Working Relationship Check out America's Best Bookkeepers

After signing the contract, build a collaborative partnership with the vendor. They are establishing communication vendors about the goals of the organization, as well as about the process strategies. The management of the working relationship is made by creating the structures with the suppliers, directly interacting with the internal clients, and motivating vendors by promoting rewards and incentives. The management of vendors is an ongoing process, including process monitoring, tracking metrics, extracting results, analyzing performance, and assessing feedback. The management of the working relationship is carried out by selecting a governance model for assuring that all processes are delivered with efficacy. Process owner, vendor management office, and single point of contact are some of the most commonly used governance models.

Step 6: Evaluation of Results

All available information gets used to evaluate the further requirement of outsourcing relation to a vendor. The decisions about changing the vendor or bringing or changing the function in-house must not be taken lightly. Continuous evaluation of results is likely to contribute to maximizing the return on investment from the vendor partnership.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
document management - Complete Controller

One of the most controversial topics in the business and management field is document management. In almost all industries, relevant confidential documents are created. Contemporary companies have realized that effective document management is needed. Using computer recycle bins is not how to handle essential documents. Instead, managers and employees must properly dispose of these documents. From an ethical point of view, critical documents must be deleted securely so that any third party cannot use it for personal gains or for haring others. However, permanently destroying data is an unusual topic, and many people are not aware of it. Bookkeeping data is among the most confidential and critical data of a business that needs to be shredded after its use so that it could not be recovered by rivals, customers, and even employees.  Check out America's Best Bookkeepers

Moving office documents into recycling bins poses considerable risk of a security violation. Intruders are always looking for unprotected data characterized by personally identifiable information such as names, addresses, and id’s, and social security numbers. Here are some useful ways that can ensure the safe disposal of essential documents.

Delete file – not enough

Regular readers of our site already know that simply deleting a file is entirely inadequate in terms of information security. The deleted files (with rare exceptions in the form of SSD-drives) can be restored within just a few minutes. This restoration is because when you delete a file, Windows does not destroy its contents but makes a note in the file system that the data is removed, and the disk space it occupies is free.  Check out America's Best Bookkeepers

Formatting a Disk

The very existence of tools like Hetman Partition Recovery is a good indicator that formatted partitions are not a guarantee of data security. In fact, except all the same SSD disks, formatting the partition in “fast” mode (and in old versions of Windows – and formatting in “full” mode) does not erase the data, but merely updates the file system. Accordingly, the data after such formatting can be restored.

However, full formatting of the disk with Windows Vista and Windows 7 will overwrite the contents of the drive with zeros, and format by any means an SSD with a significant (but not 100%) probability will also lead to the destruction of data.

Data destruction programs

There is a whole class of programs management designed for the reliable and safe destruction of information. Such programs use arrays of random numbers to physically overwrite the disk space occupied by the file being destroyed. Some security standards (for example, the standard used in the US Army) require several rewriting cycles and insist on using cryptographically stable random number generators. In practice, it’s more like shooting a cannon at sparrows. For private users and most commercial organizations, a single rewriting cycle is enough.

To find such a program is simple – just run a search for the keywords’ reliable deletion of files’. Similarly, the free space on the disk is mashed – even programs often use the same ones.

These methods work only with traditional magnetic drives, in which unambiguous addressing of the physical space on the disk is possible. In the case of SSD disks, this is not the case, and destroying the information on them is a separate and rather inadequate topic. Check out America's Best Bookkeepers

Destruction of data on CD and DVD

When getting rid of old backups, do not forget to destroy the data. The easiest way to suppress information on a CD or DVD is to destroy the media physically. Do not be tempted to break the “dummy” with your hands – you will most likely cut the shreds, and small pieces of plastic and aluminum substrate will meet for a long time in the most unexpected places.

To destroy disks, it’s easiest to use an office shredder equipped with a CD and DVD receiver. Besides them, there are specialized devices that are not as expensive as one might think. For most purposes, it is reasonable to cut the disc into four strips.

Some devices make the discs unusable by drilling a few holes in them (by the way, you can also create holes in the disk yourself with a conventional drill). Experts consider this method of management less reliable than using a shredder.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
employee theft - Complete Controller

Employee theft or fraud is a huge problem that has been causing trouble for businesses around the globe. Even in the era of superior technology and advanced tools in place, employee fraud or theft still occurs. This trend is rising day by day, and employees are inventing ways and using sneaky tactics to steal from their employers. Statistics reveal that an employee’s fraud is costly to a business; US-based businesses have lost a whopping $87 billion last year.

Management Restricts The Right To Take Legal Action Against The Perpetrator! Check out America's Best Bookkeepers

Regardless of the scale and size of the business, organizations need to develop a sound theft prevention plan to maximize their revenue and profits. They can do this by using various ways and means because they have the right to monitor and track illegal activities happening in and across their company. Business owners have mixed views about how perpetrators should be held accountable for their unjust behavior. However, it is also important to note that the business’s management restricts the rights to take legal or no action against the perpetrators. The level of accountability should be in the company policy. The final decision on how to pursue the case lies with the management of the company.

Accumulate Concrete Evidence of Employee Theft Check out America's Best Bookkeepers

An employee’s fraud means there is a loophole in how a business operates, controls its day-to day-affairs, and maintains and manages its finances. From bookkeeping to accounting/decisions to business management, organizations need to take ownership of admin work and initiate theft prevention plans to secure the fate of the company. According to a study, your trusted employees will be more apt to steal from the company than new hires. So, whenever an organization witnesses a fraud by an employee, it needs to investigate the matter and document the incident as it occurred accurately. Also, you need to have concrete evidence of theft before taking any legal actions. Why? In the eyes of the court, only those can be held accountable for theft who have committed the crime, and you have substantial evidence against them to provide to the authorities.

Take Action As Stated In Company’s Policy

Company policy plays a critical role in determining and handling a case of employee theft. It is ideal to have a plan in place for simple and complex litigation. Not having one in the area means wastage of time, efforts, and energies in pursuing the case of theft. Make sure to have a clear-cut policy stating repercussions and make sure your employees are aware of it. An employee’s fraud has to be dealt with professionally and make sure to leverage full control over the entire case proceedings. Check out America's Best Bookkeepers

What to Do When an Employee Ransacks Your Place of Business?

First thing first—you must immediately call your attorney for having a professional piece of advice as s/he knows litigation proceedings more than you. Taking disciplinary actions instead of fraud by an employee can result in instant termination of an employee’s contract. Your attorney will guide you through, which will help you sketch a clear picture handling the case appropriately. Make sure to gather reliable evidence against the perpetrator before filing a case in the court.

Secondly, you can call the police to hand over the culprit to the officials. But before that, revisit your company’s policy and present concrete evidence to the police once you have intended to pursue the case. Small businesses usually have fewer resources to afford attorneys, so they terminate the employee or, worse, call the police for further action. Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

A lot of people get into massive debt each year. Whether they are dealing with increasing bills, insufficient income, an unforeseen challenge, or lost their job, it can be frustrating to watch interest grow. Some options available to people who are struggling with debt include debt merging loans, refinancing loans, debt credit counseling, and debt settlement services.

Debt management plans, Main credit counseling services

A lot of organizations offer these credit counseling facilities, also known as DMP. Though not all these organizations have a nonprofit or public state, some self-governing agencies offer credit services as well, such as credit unions, military bases, and universities. Some for-profit banks also offer such credit counseling options. Check out America's Best Bookkeepers

A lot of people turn to credit counseling to get a debt management plan (DMP), so they can pay off their unmanageable debt.

A debt management plan is a contract between a person and their credit counselor that binds them to pay all the debts within a specific time frame.

Your DMP payments can have a dramatic effect on your credit score.

Determine if a debt management plan is right for you

DMP is not for everyone. But the budget advice provided by reputable credit counseling agencies is widely applicable, even if you do not have serious debts. Sitting and talking with someone who understands personal finances can be useful if you live from check to check but have not fallen into a vicious circle of unpaid obligations. Check out America's Best Bookkeepers

  1. Can’t commit long term?

To be effective, a DMP requires a person to maintain discipline. When their counselor presents them with a modified budget to pay their debt off and start to save for their future, a person cannot follow this plan for a couple of weeks and later get back to their old habits.

Getting out of the debt takes a lot of time and requires some sacrifices, like the following:

  • Reduce non-essential expenditures, like restaurant meals
  • Reduce or eliminate costly habits like smoking/ drinking
  • Eliminating needless shopping purchases online
  • Exchanging newer and expensive vehicles for one with a lower payment (or reducing the number of vehicles in your home from two to one)
  • Save cash on groceries, like as when buying generic foods
  • Taking fewer pleasure trips

With the help of proper discipline, such changes do not have to be permanent. However, they can be essential to solving your immediate debt problems. Check out America's Best Bookkeepers

  1. Would a substitute be better?

If you have uncontrollable debts, a DMP may not be the smartest solution. If the main problem is a crippling mortgage, a car loan, or other protected obligation, speak directly with your lender regarding refinancing choices that could reduce your monthly expenditures without forcing you to default.

As an alternative, just take benefit of the planning and budget services of your credit counselor. They cannot pay their debts for you, but they could give you a new look at personal finances.

However, it is crucial to know when a DMP is one of the best options. If you are behind credit card payments or you cannot find more money to reduce debt, the temporary blow to your current credit rating, as well as the monthly payments of the plan, might be worth it.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

The market is flooded with information and methodologies about leadership, such as the texts of Stephen Covey, John Maxwell, and Cyril Levicki. Three authors who have been good references to improve team management. Some lessons that obtained from them are:

1. Confidence: The first step to go from boss to leader is to have confidence in your work team. When forming a successful team, you must remember to be a friend without falling into excesses of camaraderie. Going out to eat to celebrate occasions, playing a sport together, or cordially coexisting does not diminish your authority or respect. But remember to put limits on these interactions. Check out America's Best Bookkeepers

2. Respect: Treat your people how you want to be treated, never use profanity when addressing your team members. Call them by name and avoid using nicknames or making fun of your team members or collaborators within the company. Be careful not to make groups isolating individual members of your team. A group is an entity with a life of its own, and each employee is an integral part of it. Develop a psychological contract that includes rules of participation.

3. Communication: Do not forget that this is one of the main competences of leadership. Avoid talking behind the back of your collaborators, do not triangle the information, and do not give orders through third parties as this is not healthy for the good development of the team. Make sure your communication is always clear, precise, and fluid. Check to make sure that what you are communicating is transmitted as you want and that your collaborators to receive it. Keep your communication goal clear and oriented towards immediate action.

4. Definition of goals: Be clear on your individual goals, avoid repeating what your superiors say, make yours the general goals, and indicate in writing what you expect from your department. Define the difference between a strategy and an action plan, and state start and end dates to your team members and collaborators. Above all, communicate the progress that measures and informs results regularly. Check out America's Best Bookkeepers

5. Delegate: Do not try to do everything yourself, remember that the sum of the talents of each team member will give you a better result in the collective. Learn to appoint a group leader. This will help you to let go and have defined roles. In this way, you will teach self-management and leadership to your team members and collaborators.

6. Training: Leaders who do not train their staff because they worry, they will use the training to go to another company, do a disservice to their team members. You must have a strong training plan, clear job expectations, and make your processes well-defined. A successful training program will make sure each individual is productive and will identify where they can be best utilized in the company.

7. Initiative and creativity: Be original and have the ability to change 180 degrees when problems arise. Take the initiative and the first steps towards change as needed and never limit your team. Encourage them to be creative, take initiative, and be proactive in promoting solutions and productivity. Check out America's Best Bookkeepers

8. Commitment: You should help your team align with your values as a leader as well as the values of the company. Commitment should be born from example and expected from each of your team members. Strong commitment will lead to successful team results and encourage productivity.

9. Not only manage: Leave behind your role as administrator and become a leader, stop managing, and start creating; do not keep processes, develop them. Do not control, inspire, and give confidence. Do not go with the status quo; challenge it.

True leadership is more than being a boss. These tips will help you to be a strong and successful leader that is respected and encourages growth and production.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Having an effective financial management in the SME depends on good planning, an adequate cost structure and a good management of liquidity and treasury. Many companies encounter the problem of not investing every day because they have no financing. And if they don’t have financing, it’s because they lack control of it.

However, it is possible that if you are self-employed or if you have a small business, you begin to successfully and effectively manage this area of ​​your business. In this post we will see some financial management tips that you can start applying in your company and for which it will be extremely useful to have an ERP in the cloud like my management.

 

  1. Create due dates for your invoices

One of the problems of financial management, is liquidity. If customers do not pay in the corresponding time, the company or the self-employed person may encounter cash problems when paying their suppliers. So that this does not happen, we must try to clarify the payment terms with our customers and enforce them.

One of the options offered by your ERP, is that you can set the due dates of your invoices based on the payment method. You can see it in our user guide billing in the cloud. For example, perhaps if the modality chosen by the client to pay for the order is by check, you want to establish a shorter payment term, since charging the operation will take you more time than by bank transfer.

 

  1. Control installment payments

Suppose you are going to charge your client a considerable amount of money. It is perhaps too much to do in a single payment. Then you decide to choose the installment payment, where you must decide the time available to pay and the fees you will have to pay each time.

The installment payments are a way to better manage your liquidity , since instead of having to wait 2-3 months until the client makes the payment, you can get maybe 50% at the beginning, 25% the following month and another 25% the next. This gives you much more liquidity margin to face the payments you have to make.

 

  1. Adjust your cost structure

In your online ERP you can also see the relationship between income and costs. There will be some costs that are eventual and others fixed. In order for your business to have some flexibility, you need to adjust your fixed costs so that they don’t inconvenience the growth of your business.

This has, for example, a great relationship with the seasonal factors that influence your sales and your income. Perhaps during the summer you sell less and the fixed costs have a greater weight on your finances, which is noticeably in a lower profit or, even, that you incur losses. Ideally, your cost structure is tight enough so that you can retain control.

 

  1. Limit external financing

Increasing your column of liabilities to have a greater liquidity can have a drawback: the increase in fixed costs in payment of loan installments and interest. Although having short-term financing is a great help for companies to deal with their payments, the truth is that having a large dependence on external financing harms your business.

The key is to limit external financing to the needs of the project. Indebtedness in itself is not bad; what is bad is not knowing how to use this financing to invest in assets that in turn generate a return on investment that results in an increase in profits.

Analyze in detail how much you are going to invest, how much you will depend on external financing and how much of the company’s funds, to what extent you will report benefits and how long it will take to generate them. Having a detailed financing plan is essential for financial management.

 

  1. Reduce your financial dependence

Many SMEs and freelancers have the problem that they depend excessively on a small group of recurring clients. Or, even, they may only have a fixed client. A delay in the payment of this type of customers can cause liquidity problems in the company, so it is necessary to reduce their dependence.

In this case, there are several strategies you can follow to win financial independence. For example, you can try to get more fixed or recurring customers to reduce their percentage over the total amount, which would make a delay in payment not affect the waterline of your business.

Another option is to diversify, opening to other business lines and alternative sources of income. Also create a portfolio of prospective clients wide enough to reduce your dependence on fixed customers.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, 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, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. 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.

Three Invoices All With Paid Stamp = three invoices for several thousand dollars, all with PAID stamp. These are normal bills, with folds and a few creases.
Cash flow holds immense importance for any kind of business, making it important for businesses to ensure things such as their customers paying on time. Recovery of debt can be a very time and energy consuming task and can still result in failure, regardless of the efforts put in. The solution to this can be proper streamlined procedures to identify bad debts beforehand. Setting an effective and comprehensive credit control and management policy is crucial for getting paid on time.

Getting Started

The first thing to do is to identify the requirements of your Credit Management Policy. You need to take a clear look at your business in order to identify what the requirements are. The first thing you have to look at is your margin. A bigger margin allows for a more relaxed credit control policy, while businesses with a smaller gross profit margin might not be able to sustain a significant bad debt, thus making the magnitude of gross profit margin a factor that can’t be neglected in the making of your credit control strategy.

You can consider the list of the following tips for an effective credit management strategy. It will enable you to identify existing deficiencies in order to get a clearer picture with which you can reevaluate your company credit control policy and procedures.

Order Stage

1.  It is important that your company’s credit control policy is clear to the sales staff.
2. Usage of a credit application form to keep everything organized, making bookkeeping less of a logistical nightmare.

Use the credit application to get the following details:
  • The name of the company you are dealing with
  • The name of your contact with the company
  • Contact information such as phone numbers and email addresses
  • VAT number of the company you’re dealing with
  • If the company is a registered limited liability company, then you should also inquire about the registration number
3. Make credit checks of new customers, things such as bank references.
4. Get a personal guarantee from customers that you think can lead to bad debt.
5. Analyze your customers, make criteria for credit recipients, and don’t be afraid to decline credit.
6. Look at your margin and analyze the feasibility of credit insurance.
7. Set a limit for the credit a new customer can receive. Minimizes the risk of having a bad debt that can lead to a loss.
8. In the case of regular customers, carry out credit checks regularly.
9. Document your Terms of Trade, this will help you out in the recovery process and will also discourage bad debts.
10. Include a clause highlighting fines a customer is subject to in case of late payment or providing a check that bounces.
11. Add a Retention of Title Clause in your Terms of Trade, utilize the services of a solicitor who knows your business to do this for you.
12. Add a clause in your Terms of Trade that gives you the right to charge interest on a late payment.
13. Include streamlined procedures for any kind of disputes that you might face regarding Trade.
14. Clearly mark your credit terms, ideally setting a 30 day due date after the date of the invoice.
15. Sign an agreement marking the terms of payment.
16. Keep a record of the due dates of the payments.

Invoicing

Ensure that invoices have no errors. Be sure to include these details on the invoice:
  1. Your business’ bank details (such as account number and title)
  2. The terms and conditions that apply to the sale
  3. The name of the organization which has placed and will receive the order
  4. Payment address
  5. Order Relevant Details such as order description, order identification number, date of delivery and the total costs and per unit prices
  6. VAT Numbers and the rate of VAT applied
  7. The total amount that is due along with the payment due date
  8. Terms of payment
  9. Discounts, if any
Make sure that you issue the invoice as soon as possible, preferably no longer than 24 hours after the goods have been delivered or the services have been provided. Monthly statements from bookkeeping records allow you to know which invoices have been paid as well as identify and update the customers who haven’t paid their accounts.

Collection

  1. Set discriminating criteria, dividing the customers of your business into bad, average and good debtors. Each category may have a policy slightly different than the other.
  2. Contact the customers with significant debt value in the days preceding the due date; this will ensure that the invoice holder knows that he/she has to pay their dues.
  3. Pursue payments that have passed their due dates, try to pressure the debtor to pay within one week of the due date.
  4. Charge the customer a late payment fee or interest.
  5. If all else fails, refer to a solicitor or debt collection agency.

Recovery

  1. Stop supply or try putting current deals on hold if the payments have not been made for a particular time beyond the due date. This particular time can be different for each type of customer.
  2. Consult and hire the services of a solicitor or debt collection agency.
  3. Chase the debtor through court.

Management

  1. Set goals for your credit control policy and keep track of them to measure progress and success.
  2. Ensure that your sales staff is trained in handling situations requiring questions, persuasion and negotiation skills.

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knowledge management - Complete Controller

Our company is growing and evolving on a day to day basis. Our primary purpose is the standardization of the full-charge bookkeeping cycle, which has moving parts that vary by industry and client needs.  Bookkeeping has multiple options; the challenge is to define best practices and choose the one best for the company. At first, we added to the process manual for each role within the company. We made sure the processes had accountability points where a person outside of the process would be aware if it weren’t completed or proper. Our manuals became robust, and there was no way to ensure that the staff members in a given role had a working understanding of all the material. We applied these tools for knowledge management, and our knowledge share is now more efficient and exciting than ever: Check out America's Best Bookkeepers

Training Videos – We created a series of training videos to help orient new staff members or those entering into a new role within the company. They are supported by outlines on which we require our trainees to make notes and give them to their supervisor. This does the following: we are reaching the visual and written learners, we are ensuring that videos are being watched all the way through, and we are mining information about the content and the trainee. If we keep seeing the same questions pop-up on those outline notes about a given subject, we know we need to improve our training in that area. If we see inconsistent or off-subject notes, we know that the trainee cannot learn this way, be meticulous, or stay on point – all indications that the role may not be a good fit for them. Check out America's Best Bookkeepers

Testing & Continuing Education – After they have watched all the videos and taken one long read through the process manual that applies to their role, we give them an open book test. All the answers are searchable within the manual, and this practice helps us to get their head into the manual, using it as a reference guide and bringing attention to the details of critical processes. Since our process manuals are continually evolving, continuing internal education is critical. Our staff answers a quick set of continuing education questions every month that set them up for success in their roles. Some processes occur once a year, so the continuing education questions are a great way to refresh their knowledge about how to handle seasonal tasks properly. Of course, we also include questions about the new or changed processes, so they come to attention. This has been effective for reducing requests for support in tasks that are already outlined in the manual, increasing our staff efficiency. Check out America's Best Bookkeepers

Management Brainstorming – We have five levels of accountability within our company: Data Entry, Bookkeepers, Controllers, Operations, and Executive staff. At all levels, we have talented, experienced, and highly educated people who love the company and want to see us become more valuable, more efficient, and more effective in the market we serve. I believe that executive staff who do not recognize the talent of their team and instead ‘dictate from on high’ miss out on great feedback and have a hard time creating the passion that fuels collaboration and personal responsibility. If a staff member is always carrying out someone else’s wishes and doesn’t have the opportunity and encouragement to share their thoughts and ideas, they won’t be excited about their workplace. We offer a forum for brainstorming where our management level team members air concerns, discuss potential solutions, work through processes that aren’t working, and discover untapped opportunities. Our non-management staff is recognized when they bring a good idea to the attention of management, and they get a bonus if implemented in part or whole.

These strategies have drastically improved knowledge management within our small business environment, and they are affordable – we were able to create all our training and tests in-house, by the people who are closest to work. It doesn’t have to be complicated or expensive to be effective.

 

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers