Category: entrepreneurship

15 Accounting Concepts & Bookkeeping Terms Every Business Owner Should Know

Have you just started a new business or want to improve your understanding of both bookkeeping and business finances? Then, it’s a good idea to familiarize yourself with a handful of important bookkeeping and accounting terms.

It’s not just about knowing what they mean, but doing your best to gain a deeper understanding of these important concepts through personal experience and from working with your bookkeeping service provider.

Your mastery of these terms and their associated practices, along with other concepts covered elsewhere, allow you to manage your money better, balance the books, interpret cash flow statements, know your financial assets, keep track of financial transactions, stay organized with your financial reports and financial records, use business credit cards with greater care, and improve your business operations. To help you sharpen your grasp of these concepts, we have prepared this informative post for you. Let’s explore them now.

1. Accounts Payable

One accounting term every business owner should know is accounts payable. It refers to the combined bills that your company owes and needs to pay. However, it does not include payroll expenses. Since these expenses are not paid immediately, they are classified as liabilities.

Some examples include unpaid bills and credit card statements. When you think about buying something new, you need to go through accounts payable to determine whether you can even make a purchase or not. It is a basic business function, and will affect business performance.

2. Accounts Receivable

Another common financial term that you must know as a business owner is accounts receivable. If you are unfamiliar with accounts receivable, it refers to money that your customers owe to your business for the products or services purchased.

Accounts receivables are classified as an asset since it is money that your company will eventually receive from customers. Generally, you will need to keep an eye on your invoices to track accounts receivable. Bookkeeping software will help in this area by keeping data organized and ready for analysis. However, you need to make sure you’re entering the correct information into your system in a timely manner.

Late payments can affect daily operations and create cash-flow issues, especially for smaller companies with less overall cash on-hand from day to day. Their volume of sales will often be less than more established companies are, therefore, affected more dramatically by unpaid bills. Stay on top of accounts receivable.

3. Accruals (accrual basis accounting)

With accruals, income is recorded when it is earned and expenses are recorded the moment they are billed. This means that real-time accounts won’t match the recorded profit. However, accrual accounting is a method that offers a long-term picture of the business’ income and expenses.

4. Balance Sheet

A balance sheet is an important financial statement that offers a quick insight into the financial position of a business. You can rely on it to find out what your company owns and owes. Also, a balance sheet lets you know how much capital you have. You can use it to compare the values and performance of different areas of your company to find out which ones are driving you forward and which are holding you back.

5. Assets

Small business owners and business leaders of all kinds should also know what assets are. In the simplest of terms, assets refer to all the resources a business owns. It is important that you understand that there are tangible and intangible assets. Some examples of assets include cash, real estate, inventory, owned equipment and vehicles, and investments.

6. Liabilities

Liabilities are the opposite of assets. They are financial or legal debts that a business owes, such as accounts payable, taxes, credit card debt, and mortgages. Every small business owner needs to make sure to keep their liabilities in check, as they can put pressure on cash flow and business activities.

7. Burn Rate

Burn rate is a calculation that allows you to find out how long your company will be able to operate with the cash you have without making a profit. You can monitor the burn rate of your business to determine the amount of time it can sustain itself without income.

8. Cash Flow

A notable accounting term that you might have heard of is cash flow. It refers to the amount of cash that comes into your business and the amount of cash that goes out. It includes both losses and gains. Cash flow includes financing activities, investment activities, and operating activities. Of course, it’s generally a good idea to maintain positive cash flow for success.

9. Depreciation

Most assets that your business owns will depreciate. In accounting, depreciation refers to the loss in value of an asset over time. You have to calculate the depreciation of current assets to determine their cost over their life expectancy. Some of the assets that you will need to record depreciation for include buildings, equipment, and machinery.

10. Credit

In accounting, a credit is an entry in which you record a decrease in assets or an increase in liability, along with a decrease in expenses or an increase in revenue (as opposed to a debit that does the opposite). With a credit, net income increases on the company’s income statement, while a debit reduces net income.

11. Dividends

When you pay your shareholders or stockholders for their investment in the company from the profit generated for the year, the amount paid is called a dividend. You distribute the earnings of a business and reward owners. The business will not be able to pay dividends if they record a loss.

12. Expenses

The costs a company pays or owes to purchase anything are called expenses. There are different types of expenses, as mentioned below.

Accrued: These expenses have to be calculated and reported, but are paid later.

Operational: These expenses are vital for running the daily operations of a business.

Variable: These expenses are often paid on a regular basis, perhaps each month, but periodically or frequently change in cost because of shifting markets or increased/decreased usage. Examples of variable expenses include the cost of raw materials and goods (cost of materials), fuel prices, utilities, delivery costs, credit card fees and more.

Fixed: These expenses remain the same from month to month or even for years. Some examples of fixed expenses include salaries and rent, insurances, cell phone and internet plans, property taxes, loan payments and more.

13. Forecasting

To predict business trends that might occur in the future, you need to get proficient at forecasting. With forecasting, you analyze past financial data and current trends which allow you to anticipate your future sales and gross profit as well as how long it might take you to pay off certain outstanding debts.

14. Break-Even Point

When you first start a business, you are likely to come across the term break-even point. It refers to the point in which total costs and total revenue are equal (total expenses equal total revenue). Therefore, your business will neither make a profit nor a loss at this specific point in time.

15. Profit and Loss Statement

Lastly, business owners also have to know what a profit-and-loss statement is. It is an earning statement that enables you to determine whether you have made a profit or loss during the year. Also called an income statement, it lets you evaluate the performance of your company fo a specific period.

You can create monthly, quarterly, and yearly profit-and-loss statements to make important decisions. An income statement shows the sales revenue and the expenses as well as the profit or loss realized by the business. Therefore, you can use it to find out just how profitable your business is and gain some traction on where to go next.

Bonus Term

Just because we thought you might enjoy it.

Return On Investment (ROI)

Return on investment (ROI) is a performance measure. It is used to determine the profitability of a particular investment. It is also used to compare the efficiency of a number of different investments. ROI attempts to measure the investment’s return relative to the investment’s cost.

If you want to calculate ROI, divide the return of the investment by the cost of the investment.

In Closing

If you want to have a solid understanding of basic business accounting and bookkeeping concepts, it’s vital that you do your homework, meet with your bookkeeper, and take your financial acumen seriously. Successful entrepreneurs and leaders have a strong grasp of money management, budgeting, accounting, investment, and other aspects of finances.

There is much more to learn about each of these concepts, and many more terms to get a hold of. But this is a good place to begin and will hopefully inspire you to keep learning, keep refining your financial practice, and to make wise decisions regarding your company’s financial well-being.

Sound Accounts helps business owners make sense of their budgets, their cash flow, and their goals, with experienced, attentive bookkeeping support and solid advice. Contact us today to get started and ask how you can qualify for 6 months of free QuickBooks.

To learn more about accounting and bookkeeping terms, check out our frequently asked questions below.

FAQ

What are 5 common accounting or bookkeeping terms?

1. Financial Statements: These are statements you can review to determine the financial situation of a business. Four primary financial statements include the statement of owners’ equity, statement of cash flow, income statement, and balance sheet.

2. Asset: Everything that is owned by a business is an asset. It can either be tangible or intangible. Assets are shown on the balance sheet in their cash value. Some examples of assets include a patent, trademark, cash, equipment, vehicles, real estate, and land.

3. Liability: The debt owed by a business is called liability. It includes unpaid rent, income tax, salaries, and loans, and more. Liabilities are classified as long-term and current on the balance sheet.

4. Revenue: The sum of the money that your customers have paid or will pay for your goods or services is known as revenue.

5. Expenses: All the costs you incur for generating income are expenses. There are fixed expenses and variable expenses.

Why do small business owners need to have an understanding of bookkeeping and accounting practices?

Money management makes all the difference in long-term success. The best CEO’s, entrepreneurs, and leaders understand the power of making a plan, following a budget, investing wisely, keeping good records, staying compliant, balancing the books, and using cash flow more strategically.

WIthout a solid understanding of these concepts and the ways they affect your business, you cannot expect to achieve your goals.

What are the 6 Golden Rules of accounting?

You need to know the following accounting principles if you want to run your business successfully.

Accrual Concept: It is an accounting method where revenue or expenses are recorded the moment a transaction occurs instead of recording the transaction when cash is received or paid.

Business Entity Concept: It states that the transactions associated with running a business need to be separately recorded from those of its owner.

Money Measurement Concept: It states that a business can only record a transaction if it can be expressed in terms of money.

Going Concern Concept: It is an accounting term that requires a company to have enough resources to continue operating indefinitely.

Duality Aspect Concept: It states that every business transaction needs to be recorded in two different accounts.

Realization Concept: Revenue can only be recognized once the goods or services associated with it have been delivered.

January 25, 2023
Choosing the Best Legal Structure for Your Business

One of the most important decisions that every business owner needs to make is deciding which legal structure to adopt. You have to understand that how you structure your business carries tax and compliance implications.

There are a number of factors you need to consider in order to determine the right type of business structure for your company. It should help you maximize deductions, decrease personal liability, and enable your business to grow at a steady rate. To help you choose the best legal structure for your company, we’ll look at the available options. Let’s jump in.

1. Sole Proprietor

One of the legal structures that you can adopt is a sole proprietorship. It is common for people to first start their business journey as sole proprietors. You would have to use your personal social security number initially until you obtain a taxpayer identification number for the company by filing the IRS SS-4 form.

You will make a request to the IRS to provide you with an employer identification number. The business would operate under your name. However, you do have the option to seek an alternative name by registering for a Doing Business As (DBA) designation. This will allow you to get a different name for your business. You will have to comply with specific rules depending on the state you reside in. Moreover, you might need to apply for a business trademark as well.

The main reason why individuals decide to run their business as a sole proprietor is that they have to file their taxes together on their business and personal income. This ensures minimal paperwork and less hassle. Besides, people who are freelancing part time or are fully employed, can become sole proprietors. However, it is important to keep in mind that it does not provide corporate protection (corporate liability protection). For this reason, your personal assets would be at risk if you are sued or the business goes bankrupt.

This happens because there is no legal difference between personal and business assets with this business legal structure. Hence, your personal assets would need to be sold in order to pay debtors.

2. Partnership

Another type of legal structure that your business can opt for is a partnership. A partnership is a form of business that is owned by more than one person. You can either form a general partnership or a limited partnership. A general partnership is where both profit and loss are shared equally. On the other hand, a limited partnership is where only one partner contributes and receives part of the profits, whereas the other partner controls the operations. When there is no separation between the business and the partners, it is possible to operate the business as sole proprietors. However, limited liability partnerships provide a liability structure.

Partnerships are suitable for anyone who is going into business with their family member, business partner, or friend. Some great examples include an agency and a restaurant. The partners get to make business decisions regarding business activities, and your business plan together and also share profits and losses.

However, you would be held liable for the decisions made by your business partner. You should also know that this structure costs more money than a sole proprietorship as it would require an attorney to review the partnership agreement.

Both sides have to agree to the business partnership agreement. A great example of a business partnership that you should know about is Google which was co-founded by Sergey Brin and Larry Page in 1995. What began as a small search engine ended up taking over the world.

There are plenty of reasons a partnership might be the best structure for your business. A partnership is relatively easy to form, as there is little paperwork involved. You might need to adopt a fictitious name and file a certificate for conducting business as partners. Moreover, an article of partnership agreement is an absolute must. You will also have to obtain a license depending on the type of product or service you provide.

A great thing about running a partnership is that it makes it easier for you to seek a business loan. The reason behind this is that the bank prefers two credit histories instead of just one. What’s more, you will have to file a federal tax form 1065 as well as state returns. Then, you and your partner will need to report the shared income or business losses when filing your income tax return.

Partnerships are popular as each owner brings working capital and a certain type of experience to the business. If you invest more capital into the partnership, you and your partner can decide that you will receive a higher percentage when it comes to profit and loss. Hence, you would be the majority owner of the organization. Some successful partnerships that you should know about include Apple, Microsoft, Hewlett-Packard, Warner Bros, and Twitter.

3. Limited Liability Company (LLC)

A limited liability company is formed to protect owners from business-related liabilities. This type of structure has been popular ever since its inception. Its simplicity and strong legal protection make it worth considering for many individuals. If you want to protect your personal assets, you should consider forming a limited liability company. It takes a sole proprietorship to the next level.

You will appreciate the fact that it is quite simple to set up and does not cost a great deal of money. There is less paperwork and you get to benefit from legal protections from court judgments and non-guaranteed debts, even though your company would not be considered a separate entity.

Having legal protections in place makes all the difference, and removes a considerable amount of stress from your life. However, if you make a personal guarantee on a debt, it would become a part of the contract and your personal funds would be at risk. This means that the corporate veil would be exposed and you could be held personally liable. Moreover, you will need to operate the business as a separate entity in order to retain its value. As for the earnings made, they would be subject to self-employment taxes. You might also need to pay an additional franchise tax depending on the state you operate in. Make sure to consult the federal government’s IRS website, your state’s tax site, and your accountant, to better understand your personal tax burden and all tax implications for your business.

4. S Corp

A subchapter S Corporation or S Corp, is a type of business structure designed by the IRS to enable an organization to be recognized as a unique entity. This means that it is considered a separate entity from the person who owns it. Because of this separation, you would benefit from limited legal liability. As there would be a separation between personal and business assets, you will enjoy peace of mind and greater financial safety for you and your family.

What you will need to do is file separate tax returns for the organization. Form 1120S is normally filed. As profit and losses pass to the shareholder, the business does not get taxed. Instead, only the shareholders of the company are taxed. Moreover, if a shareholder works for the company, he or she can receive reasonable compensation for running the company. A fair market value must be paid to the shareholders for their work. Otherwise, the IRS would reclassify additional corporate income as wages and the S Corp would have to pay employment tax which includes Medicare taxes and Social Security.

Generally, an S Corp is mostly suitable for people who would pay themselves a low wage in order to avoid having to pay self-employment tax. Furthermore, the company can be audited from time to time and penalties might need to be paid if there are violations.

5. C Corp

A C Corporation or C Corp is also a great option for independent professionals as it allows you to become a shareholder. You get to have the same status as any other Fortune 500 business. A C Corp is a separate entity from its owner. When you individually own the C Corp, you would be the majority shareholder. Although the structure might be more complex, it is more sophisticated and attractive for independent business owners.

The IRS views C Corps as individual taxpayers. As the company would have limited liability, you will not be held personally liable for anything. Moreover, fringe benefit deductions are also offered, such as health reimbursement arrangements. A C Corp is subject to double taxation, which is something that you need to take into account. It’s good to gain a clear understanding of how your legal structure decisions affect tax treatment within your business so you can stay compliant, plan ahead, and continue to do business.

Conclusion

Different legal structures offer certain tax benefits, legal advantages, corporate and individual protections, and organizational advantages. It’s a good idea to do plenty of research in to each one, and seek advice from a good lawyer and an accountant so you can make the very best decision for yourself and your organization.

Sound Accounts helps business owners get organized, stay compliant, and make the most of their finances, with individually tailored bookkeeping service plans and ongoing advice. Contact us today to learn more and find out how to qualify for 6 months of free QuickBooks.

To learn more about business legal structures, check out our frequently asked questions below.

FAQ

What is the best legal structure for my business?

When it comes to selecting a legal structure for your business, you have to think about several factors – what kind of business you want to run, how you want to split up profits and liabilities, how much protection you want against legal ramifications, whether you want shareholders or to keep it entirely private, and much more. It’s good to consult an attorney and a financial professional for clarity and direction.

Why is it important to choose the right legal structure for your business?

The specific legal structure of your business affects many things, your taxes, how profits and responsibilities are divided, how much exposure you have to legal liabilities, whether stockholders are involved, and more. Your legal structure says a lot about who and what you are as a business, and allows you to function more successfully within your goals. It can also protect you from unnecessary penalties or the possibility of personal losses should problems arise.

Why is a Limited Liability Company (LLC) a good idea for many businesses?

The main reason why limited liability is crucial for a business owner is that it ensures you are not held personally liable for certain court judgements and non-guaranteed debt incurred by the company.

December 7, 2022
Understanding 7 Functional Areas of Business

When it comes to running a company, you need to have a solid understanding of the key functional areas involved. Every healthy organization operates like a living organism and there are functional areas which ensure that it achieves all its objectives.

These key functions encompass a range of areas affecting things like employee training, the acquisition process, company size, management styles, marketing strategies, customer service, employee relations, supply chain management, company policies, distribution channels, effective project management, organizational structure, production planning and much more.

Whether you are a new entrepreneur or have been running a business for quite some time now, it is crucial that you know these 7 functional areas of business. To provide you with insight into the core of your organization, we’re presenting this informative piece. We’re confident it will help you better understand the underlying processes that keep your business growing.

1. Strategy

One of the most important functional areas of a business is strategy. Every organization needs to have a clear strategy in order to ensure that it moves in the right direction. Top management teams spend a great deal of time working on the development of a strategy that makes sense for their market. It is normally headed by the CEO or COO. Then, corporate policies are created and conveyed to all staff members through in-depth training and follow up, and through company communications and initiatives. These policies dictate just about everything, such as paying rent, handling business licenses, ordering office supplies, marketing, and even recruitment.

No matter the size of your business, there is great need to develop a strategy that takes all major areas of your business into account. It can best be described as a clear set of goals, actions, and plans that outline how an organization aims to compete in a specific market. In fact, entrepreneurs need to present a strategy to creditors so they can get the funding they need. It is impossible to run a business without a proper strategy.

Your strategy needs to be evaluated from time to time to ensure that everything is going according to plan, as much as anyone can ensure that in a complex world. A good strategy allows you to follow a path while remaining adaptive and agile enough to navigate changes, market fluctuations, shifting demand, and unforeseen events.

2. Finance

Another integral functional area of a business is finance. It is impossible to run a company without funds and preferably, good money management. Organizations need to have some form of financing. You must monitor cash flow and strategize so that you use your resources wisely. This functional area requires a great deal of time and focus.

To get your finances in order, you must have a dedicated account and finance department, or just as good, an experienced bookkeeping service provider. It is essential for maintaining books and accounts. You need to be on top of all accounting tasks to avoid issues down the road. If you want to prevent a situation where you are unable to pay bills, where you miss taxes, or default on loans, you must take your finances seriously and put together the support and resources necessary to this function.

3. Marketing and Sales

Regardless of which product or service you provide, you have to generate demand if you want to increase sales. In order to do so, you have to get the word out about your offerings. This is where marketing and sales come into place. They go hand in hand and allow you to maximize your earning potential. It is in your best interest to create a dedicated staff for handling client communication, including complaints and feedback.

Through marketing functions, you get to provide the best customer experience and keep everyone coming back for more. The marketing department works with other departments to achieve its objectives, using the latest technologies, social and digital marketing practices, savvy advertising practices, and substantial analysis.

Generally, marketing and sales are combined as one informs the other. The marketing department manages brands, develops company messaging, creates the look, feel, and voice of your brand(s), establishes communication pathways across several channels, and works to not only build, but keep customers for the long haul.

On the other hand, the sales department will focus on selling your products or services. This involves different levels of sales, sales management, and sales and customer support. Both marketing and sales personnel will allow you to keep up with the latest market trends and practices.

4. Production and Operations

The production and operations department oversees the production of goods or services. Regardless of what you sell to your target audience, you must have a functional department that is responsible for production.

For instance, if you offer physical products, the production department would handle the manufacture of these goods and ensure quality standards throughout. As for businesses that offer a service, there will need to be a person or team responsible for managing operations on several levels.

Also, the production department has to manage inventory and place supply orders before inventory runs out. No matter how complex it might be to run an organization, the production and operations department will work to increase efficiency and productivity levels. Your team will monitor equipment and perform the necessary repairs. In order to look after production, you need to train existing staff and hire new workers to keep your manufacturing system working.

5. Research and Development (R&D)

Businesses cannot expect to continue developing and growing without research and development. It provides vital information and insight, enabling you to make improvements to existing products or services and come up with new offerings. In fact, research also helps reduce costs and increases efficiency. Research and Development requires a solid investment of time and money, but it’s worth it. Organizations that take R&D seriously, adapt quickly, innovate continually, and meet their customers’ needs.

As the world of business continues to get more competitive, you simply cannot overlook research. You have to find new ways to do things and come up with things that no other company offers or offers quite like you. There is a lot that goes into research. You have to look beyond your current boundaries and take advantage of new technologies and creative thinking. This will ensure you overcome current limitations, meet business goals, and continue to grow as markets and consumer habits change.

6. Employment and Human Resources

If you want your organization to be successful, you need to recruit the right people and ensure they stick around. This is where the employment and human resources department comes into focus. Unless you’re running the entire organization on your own, you require dedicated staff to manage, equip, and enable your people to have the support system they need to remain successful.

A dedicated human resources department will ensure everyone works toward the desired outcome. It will structure company policies as well as maintain consistency so that communications are clear and every staff member is treated equally. Human resources helps manage the application process, organizes personnel files, deals with employee concerns, and works to improve communication between individuals and between departments.

7. Insurance and Risk Management

Lastly, insurance and risk management are key functional areas that business owners must never overlook. Every company faces risks and has to focus on safeguarding itself from financial losses. There are various factors to keep in mind, such as accidents, theft, natural disasters, cybersecurity threats, various liabilities related to materials, production, and facilities, along with the safety and function of your products or viability and consistency of your services.

Insurance is vital, as it can help minimize financial losses caused by these threats. The insurance and risk management department will strive to protect your business from significant financial risks. They will pursue the best insurance plans to shield your main vulnerabilities. Also, it will prepare the company for difficult situations with training and information to help individuals refine their choices, behaviors, and habits to minimize risk to themselves and the organization. Is arguably one of the most important departments in your business.

Conclusion

Every key function of your organization holds secrets to maximizing the quality of your business activity, achieving your goals, meeting your business plans, and keeping all departments in top form. It is imperative you understand the differences between departments and that you equip and develop each function so that every pillar in your business remains a strong part of your foundation.

Success takes firm ground to build on. It also takes creativity and an agile approach. Investing in each functional area of your organization will keep you right where you need to be to meet every challenge.

Sound Accounts helps business owners make better decisions and achieve more with excellent bookkeeping management, uniquely tailored for each organization. Connect with us today to discover the difference Sound Accounts can make in your business, and find out how to qualify for 6 months of free QuickBooks.

For more information on the functional areas of business, check out our frequently asked questions below.

FAQ

What is a functional area of business?

In the simplest terms, a functional area of a business is a key department that every organization needs and can’t operate without. Some examples include finance, marketing, R&D, and human resources.

How do functional areas work together within a business?

The functional areas of a business are like parts of a human body. And just like the human body, each one performs a unique function while every part needs the other parts to function together as one.

What is the importance of business functions?

Business functions are crucial as they enable an organization to compete with major players, meet their goals, and remain relevant in changing markets. They also help business owners reduce risk, avoid errors, make the most of your finances, build brands, communicate effectively, and stay relevant.

Why is IT necessary to evaluate different areas of business operations?

We live in a modern and digital world, one that requires us to make the most of available data. IT has become an integral component in analysis and decision-making. It allows organizations to evaluate the performance of every department and customer behavior.

Technology is constantly evolving, and new tools are emerging all the time. It’s important to use technology, sound financial management, and bookkeeping to lead your organization with clarity and confidence.

October 26, 2022
5 Secrets for Small Business Management

As a business owner, when you launch a business, your first goal is likely to be growth. However, you need to understand that growth takes time. You can’t expect to get results overnight. Instead, you have to be patient and dedicated to your venture to ensure that you don’t miss important opportunities, opportunities that allow you to meet your business goals.

If you want to get ahead of your competitors, ensure that you thrive, and be among other top business leaders, there are certain secrets that you should know. Business success means understanding business finances. But it is much more than that. This is where our post comes in handy. We’ll take a look at some essential tips for small business management. Here’s how you can accelerate your growth in no time.

1. Hire Top Talent

One of the secrets to managing a small business is hiring top talent. Although it costs money to recruit experts in the field, it pays off within a short time. If you are interested in establishing your organization as a major player, get the right people on board. Having a solid team will work wonders for your organization and allow you to achieve all your goals. No matter how much experience you might have in your industry, you could always use extra help.

A surefire way to grow your business is by hiring the best people. It will allow your business to head in the right direction, to remain innovative and creative no matter what business model you operate by. The truth is that there is nothing you cannot achieve when you have the right team by your side. Quality people means smooth business operations, great customer acquisition, customer loyalty, and an entire team working toward strategic business development.

Having hard working individuals will move you toward success much sooner. Also, it is vital that you delegate tasks so that you can focus on making decisions. You should be able to create a collaborative environment and get everyone to participate in helping your organization succeed.

By getting the brightest minds to work for you, your business will gain a competitive edge over major players and build lasting customer relationships. In fact, you will be able to expand your operations and enjoy a bigger piece of the pie. There is no limit to what you can achieve when you recruit top talent. It is worth keeping in mind that many people are interested in working at a startup despite the lower pay, as it allows them to gain skills they would otherwise miss out on.

2. Be Adaptable

Another secret to succeeding in the business world is being adaptable. Keep watch over the business climate and keep up with the latest trends. What makes managing a small business a lot easier is the fact that you can easily adapt and put the most recent developments to good use. By switching directions to respond to changes in the market, you can rest assured knowing that you will win more customers over.

Having an agile approach in small business management should be your top priority. It is easier to be adaptable when you have a small business. There is no excuse for you to overlook the newest trends, and to spend a bit of time researching and testing them to determine which ones will fit with your model.

Look out for advancements in your industry and adopt them when they refine your company’s operations. Thus, you will be able to grow quickly. When you adapt and change your approach, you get to try out new ideas and find out what works best for you.

To connect with the crowd, you should look out for the most current pop culture trends, key marketing strategies, and social media tips. Be a part of a wider community to connect with your audience. As we live in the information age, you have to take advantage of everything that the internet offers. It will ensure that your brand reaches its full potential.

3. Focus on Customer Experience

If you want to expand your operations and keep your existing customers, focus on customer experience. The perception customers have about your business directly influences your success. This is why it should be a top priority for you to deliver a quality experience each time. This will ensure customers regularly sing your praises and recommend your business to others. There is no better way to increase your growth rate.

By keeping your customers happy, you will encourage them to keep coming back for more. You will increase revenue and profitability.

Whenever a customer chooses your company for a product or service, reward them by providing the best experience that they could ask for. Unlike larger companies that struggle to respond to customer needs in a timely or genuine manner, small businesses have a competitive edge and can easily exploit it to meet the needs of their audience. You need to introduce innovative products and services and support these with consistent attention to your customers’ satisfaction, to develop long-term relationships with customers. Nurture your followers and show them they made the right choice.

No matter which industry you might be in, listen to your customers. This allows you to show them you actually care about their needs. Since customers have ever-changing tastes, diversify your products or services to cater to them as long as it fits with your business and with your values. Your main purpose is to serve your target audience.

Focusing on offering a superior customer experience will make your business stand out. You have to exceed their expectations. Going the extra mile makes all the difference.

4. Leverage Social Media

For better or worse, social media has taken over much of our lives. If you want your business to succeed in the digital age, you have to leverage social media. You can get started by creating a profile on all major social networking platforms, such as Facebook, Instagram, Twitter, and TikTok. However, you will also need to be active on social media to connect with potential customers. This means you’ll need to post regularly and interact with others. Besides, being active on social media shows you care about your customers and are committed to providing them with vital information and new experiences.

Moreover, you can encourage your target audience to share your posts online and get their family and friends involved. The more people talk about your company, the better. It will allow you to grow your presence and become a household name. It doesn’t matter how small your business might be, as social media can help catapult any organization when used right.

5. Invest in Yourself

Lastly, you have to invest in yourself if you want your business to succeed. Since there are many things that you are likely to be unfamiliar with, put in the effort and learn as much as possible about the business world. Enroll in courses and find out how you can grow a business no matter what stage you’re in. When you invest in yourself, you will know how to make the right decisions and avoid making costly mistakes.

It is vital to invest in yourself if you want your business to head in the right direction. Although you might be tempted to spend profits on other things, take time and the necessary resources to educate yourself. There are plenty of courses, books, blogs, and mentors out there that can help you reach new heights of knowledge and success.

In Closing

Business management takes a range of skills and a depth of knowledge. You have to balance business and personal finances, make strategic marketing decisions, gain customer loyalty, use the right technologies, hire good talent, and remain innovative. You’re not alone though. There are plenty of consultants, mentors, resources, and educational programs to help you continue to grow.

No business owner is perfect. We all have strengths and weaknesses. But if we each apply the basic principles of sound business management consistently, our chances of growth and success increase much more.

Sound Accounts helps business owners in every industry achieve greater success with bookkeeping service plans tailored just for them. Connect with us today to learn more about the difference Sound Accounts can make and see if you qualify for 6 months of free QuickBooks.

To learn more about managing a small business, check out our frequently asked questions and answers below.

FAQ

What Is the Secret to Success in Business?

There is no one single secret to succeeding in business. It takes a range of things, including excellent financial management, great talent, a unique idea, quality products and services, awesome customer service, a creative and innovative approach, and confidence, among others.

What things should I avoid when running a business?

There are many pitfalls to avoid. Some of these include poor financial planning (bad bookkeeping), overspending, mixing personal and business finances, not putting together the best staff possible, taking out bad, high interest loans you can’t afford, making promises you can’t keep, and ignoring your customer’s needs and suggestions.

What Are 5 Skills of an Entrepreneur?

5 of the most important skills that every entrepreneur should have include sales, the ability to learn, communication, empathy, and a mindset for strategy.

What Is the Best Strategy for Small Businesses?

If you are running a small business, consider targeting a specific niche. It will provide you with a competitive edge and ensure that few if any other companies target them.

October 19, 2022
How to Create a Small Business Budget in 5 Easy Steps

Running a small business requires a great deal of effort, ongoing dedication and a clear business plan. However, if there is one secret to success you can’t forget, it is budgeting. You have to create the right small business budget to ensure that you don’t fall behind, that you manage your business expenses wisely, and that you reach your business goals year after year.

Although it can seem intimidating at first, it is easier than you think. You need to know what to include in your budget and what to leave out. Since many small business owners fail to create a budget, it will help provide you with a competitive edge. To help point you in the right direction, we have created this informative post just for you. Let’s get into it right now.

Why Do Small Businesses Need a Budget?

Before we look at how you can create a small business budget, it is important that you understand why you need one in the first place. The fact is that preparing a budget allows you to make an educated guess about the future of your organization. It involves examining past performance to get an idea about what lies ahead. Then, you can use that information to make the right financial decisions both today and in the future. Preparing for the uncertainty allows you to minimize expenses and focus on how you can get more done. It also reduces risk and ensures that you continue to do what you do best, month to month, and year after year.

Even though the budget would not be entirely accurate, it would ensure that you have an idea about how to run operations smoothly in the coming months or even years. If it is your first time creating a budget, you will need to put in extra effort, after which you will have an easier time preparing it.

Every successful business understands the importance of a budget, just as much as they understand how vital it is to grasp cash flow, monthly costs, bank statements, business revenue, advertising costs and other common financial aspects of their business. It enables you to identify leftover funds which you can reinvest into your company, predict slow months, reduce debt, and keep operations in order.

5 Steps to Creating a Small Business Budget

Here’s how you can prepare a budget for your small business.

1. Examine Sales Revenue

The first thing that you need to do to get started with creating a budget is to examine your sales revenue. You have to look back if you want to move forward. Take a close look at all your income sources and add them together to ensure that you have an idea about how much your business can generate every month.

When determining your income, you have to focus on revenue instead of profit. For those of you that don’t know what revenue is, it is all the money your business generates before expenses have been deducted. The remaining amount after expenses have been deducted is profit. However, you need to focus on income and not profit.

After identifying all your income streams, you just need to calculate your monthly income. You will have to do so for multiple months. Generally, you have to consider the last 12 months and put all available data to good use. Keep in mind that your company will often experience a drop in revenue right after the holidays, depending on the nature of your business. Therefore, you will have to manage your finances accordingly.

2. Remove Fixed Costs

When creating a budget for your small business, you need to subtract the fixed costs. This is why you will have to add all the fixed costs and then remove them from the budget. Fixed cost refers to any cost that is incurred on a recurring basis by a business. It is possible for fixed costs to occur yearly, monthly, weekly, or daily. Some of the fixed costs that your business might incur include rent, debt repayment, supplies, payroll, insurance, taxes, and depreciation of fixed assets.

It is worth keeping in mind that every business is unique and will incur different fixed costs. It is due to this reason that you should take some time to evaluate all the expenses that you do incur. It will allow you to identify all the fixed costs and remove them from the budget.

3. Determine the Variable Expenses

Next, you have to go through your data to find out all your variable expenses. It will make it a lot easier for you to create a cost saving budget for your small business. Chances are, you might have already identified the variable expenses while you were working out the fixed costs. Unlike fixed costs that remain mostly unchanged, variable expenses are incurred depending on usage and are usually essential for every business. These are apart from unexpected expenses and include things like raw materials, packaging supplies, shipping costs, credit card fees, commissions and more, which are expected but vary from week to week and month to month because of shifting market demand, availability, production costs, shipping, and a host of other factors.

There are also some expenses that might not be necessary but allow you to boost profitability like extras. These are known as discretionary expenses and are included in variable expenses. Other examples include marketing costs to build your customer base, professional development, office supplies, replacement of equipment, and owner’s salary.

During months where you are likely to generate less revenue, you will have to reduce your variable expenses. You will first have to minimize discretionary spending. On the other hand, you can increase variable expenses during more profitable months if needed. Hence, you have to classify your expenses and rely on them to create your budget.

4. Prepare a Contingency Fund

No matter how careful you are, your business is likely to incur unexpected costs. In order to keep your business afloat, you will have to set aside a contingency fund. There are onetime costs that may occur periodically. Therefore, it is in your best interest to be prepared. You never know when your equipment might stop working and require repairs. Similarly, you might need to invest in a newer software application.

Since costs can arise when you least expect them, you could use your contingency fund. This backup plan will ease your stress and allow you to keep functioning successfully during leaner seasons. This will help you with smart financial planning, as your emergency fund will enable you to avoid taking out an expensive loan. Planning for contingencies will allow your business to keep running when the going gets tough. It is simply smart budget planning.

Now, you might be tempted to spend any additional income you generate. But it is vital that you have an emergency fund. It will allow you to pay for repairs and hire a professional to avoid unnecessary closure. If you think that a business loan could help you out, you could not be more wrong. It would affect your ability to keep operations afloat. By budgeting for an emergency, you would be best prepared for it. Thus, you will have no trouble handling it even if it appears.

5. Make a Profit-and-Loss Statement

After you have collected all the information, you have to make a profit-and-loss statement. It is quite easy to make. As you have already done everything, the entire process should take minimal time. Simply add the income and subtract the expenses for the month. If you get a positive value, you will generate a profit. Making a profit-and-loss statement is vital, as it will help you with strategy and better decision-making. This form, as with all financial statements, has various purposes and needs to be analyzed from time to time.

Conclusion

Creating a budget for your small business is something you simply can’t ignore if you want to experience consistent growth. It enables you to get your finances in order and prepares you for the future. No matter which industry you might be in, budgeting and financial planning remain at the top of a long list of practices every high-level business owner needs to master.

By following the steps mentioned above, you should be able to create a business budget in no time. The more you familiarize yourself with budgeting and bookkeeping concepts, the easier the process and management of your budget will become. Work with an experienced bookkeeping service provider to help you master sound financial practices and keep your books in order so that your money can fuel your continued growth indefinitely.

Sound Accounts helps business owners achieve greater control over their business and strategic growth with individually tailored bookkeeping service solutions and sound financial advice. Contact us today to learn more and find out if you qualify for 6 months of free QuickBooks.

FAQ

How Do I Create a Budget for My Small Business?

Creating a small business budget is easier than you think. An important initial step is to go through your accounts and identify all your income sources. Then, add these up and subtract the value from all the expenses that you are likely to incur. Other steps to tackle are determining fixed costs, including variable expenses and predicting one-time costs, and putting it all together to create a budget that works not only today, but can adapt as your business changes.

What Is the first step in setting up a budget?

The first step to creating a budget is going through your sales revenue. It will allow you to get an idea about how much money you can generate in a certain period. Then, you can identify your expenses and calculate how much cash you will have left by the end of each month.

What are the 3 types of business budgets?

The 3 main types of business budgets include a master budget, an operating budget, and a cash budget. A master budget includes other lower-level budgets created by different functional areas of a business. Every business creates a master budget to ensure that everything is taken into account. On the other hand, an operating budget focuses on subtracting operational expenses from the revenue generated during a given period. As for the cash budget, it only includes cash transactions and removes debts.

October 12, 2022
7 Basic Principles of Financial Management

When it comes to running a business or even a nonprofit organization, you need to understand the importance of financial management. After all, if your finances are not in order, your financial health and long-term viability as an organization will suffer. Whether it’s paying off credit cards or maintaining sufficient cash at the end of the month, you must have enough money to make payments and meet your responsibilities.

Successful organizations know that controlling costs and managing risk comes down to how well they manage their finances and financial policies. If you want to make sure that you take the right actions to help your organization grow, you have to have a clear financial plan and financial goals. The following principles of financial management will enable your business or organization to thrive and move forward with purpose.

1. Organize Your Finances

One of the most basic principles of financial management that you need to master is to get your finances organized. Only when your finances are in order, free of clutter and distractions, can you expect to proceed with procurement and the acquisition of supplies. In fact, it is necessary for obtaining a lease agreement and other types of agreements and to prepare for an audit.

By organizing finances, both your personal and professional accounts, you establish the foundation for creating wealth. This is why you will have to track everything, including car loans, mortgages, brokerage accounts, personal loans, bank accounts, credit cards, and retirement accounts. You should be able to use budgeting software to track these accounts and make payments on time so you can avoid late penalties. Besides, the federal government advises businesses to account for everything, even indirect costs. This allows you to accurately prove how much you earn from your business.

If you don’t have much experience organizing finances, you should educate yourself with a range of resources along with taking basic or in-depth courses on the subject to achieve your ultimate goal. Most of the tools available today provide access to insights and research that can help you move in the right direction. You should read financial blogs, books, and periodicals to stay updated and to continuously educate yourself. The last thing you want is to make mistakes you could have avoided.

2. Spend Less than You Make

When you start a business, it’s pretty easy to go overboard. Similarly, individuals need to spend less than they earn in order to control their debt-to-income ratio. Even if you want to spend more on your investments, you still need to think things through. Otherwise, you could overspend and force yourself to borrow additional funds through a loan or other means.

Once again, you should be able to use financial software to keep track of spending and budgeting. It will allow you to meet your long-term goals. By learning how to monitor finances and understanding where most of your money is going, you’ll be able to establish control over your finances. It is one of the secrets to strong business performance. Luckily, you don’t need an accounting degree to know when you are spending more than you are earning. When you overcome debt or avoid it altogether, you decrease your liabilities and increase your ability to expand.

In addition to controlling your spending, you have to limit debt to income-producing assets. When you have car loans and credit cards to pay off, you will have less money for your goals. You need to understand that only a few car models don’t depreciate to zero. On top of this, you have to pay for repairs and high-interest rates. Therefore, you should consider whether you even need to purchase things that are not an absolute must. If you want to take on debt, it should only be for financing items that actually retain their value with time, such as education, real estate, business equipment and technology, and talent.

3. Make Your Money Work

If there is one basic principle of financial management that you need to master, it is to make your money work for you. This is where the concept of the time value of money comes into place. If you invest today, you can expect a greater return if you plan with wisdom and the right research. Whether you want to invest in entities, stocks, or a savings plan, the earlier you begin, the better.

Consider diversification to ensure that you don’t expose your portfolio to excessive risk. Qualified financial planners are good for this. Make sure you regularly invest your money so that you get something in return and take prompt corrective actions to shift your investments toward more advantageous avenues when current results aren’t meeting your strategic goals.

Since money loses value over time because of inflation, you cannot simply wait around and let assets collect dust. Instead, consider new places to invest, real estate opportunities, and remote contract work. Offer outside consultation services to businesses or non-profit organizations. Develop new products and services to introduce to the market. Invest in a franchise or another company, and consider expanding current systems to increase profit over time.

Remember, when speaking of diversification, you should know that it isn’t only reserved for investment. You should find ways to get more out of your income. We all have talent and special skills that can provide money-making opportunities. Earning some extra income can help you with financial management and enable you to lead a better life.

4. Understand Risk

Everything comes with risk in life. Generally, the more risky something is the higher the return should be. It is known as the risk-return trade-off. Investing in bonds and stocks comes with a higher rate of return because there is more risk involved, along with the possibility of you losing your principal.

On the other hand, investments like money market accounts and certificates of deposit come with a lower rate of return, but they hold a lower level of risk. However, you still need to understand that no investment comes with zero risk. As long as you manage your portfolio well, don’t place all your eggs in the same basket, and make the most of wise financial advice from qualified investors and professionals, you should be good to go.

5. Maximize Employment Benefits

If you are working a regular job, it is a good idea to cash in on employment benefits. You should definitely get medical and dental insurance, consider flexible spending accounts, and take a serious look at a 401(k) plan. The reason why you need to set money aside for employee benefits is that they are tax deductible and a great way to protect you and your family. This means that you actually end up saving money when you get them, while providing for your family’s health and wellness. It is crucial that you invest in your future. It will ensure you improve your overall financial and personal well-being.

6. Pay Attention to Taxes

The next basic principle of financial management that you need to know about is paying attention to taxes. Managing taxes accurately allows you to avoid penalties and to benefit from tax credits, while applying adequate safeguards to your compliance practices. You might not realize it now, but taxes can eat away at your earnings.

If you fail to account for your tax burden, the same way individuals sometimes don’t pay enough attention to their capital expenditures or employment costs, you could easily lose a huge share of your income. You should look into taxable investments and organize your year-end tax filings to ensure there are no mistakes, no delays, and no missed opportunities for deductions and savings. Be sure to evaluate all your tax implications and possibilities. This will allow you to maximize your take-home amount personally and in the professional sphere, put your company’s revenue to work more effectively.

7. Plan for the Unexpected

Nobody knows what the future holds. Still, you can’t just wait around for an unforeseen emergency to pop up and hope to deal with it when it arises. What you need to do is save enough money to ensure you have cash ready when something goes wrong. You might have to weather natural disasters, house repairs, car problems, catastrophic medical care, accidents, or extended unemployment. Therefore, you must prepare for uncertainty. Make sure to increase your savings during the good times to avoid a difficult situation later on.

When you have sufficient savings, the bumps ahead, while difficult personally, will not have such a dramatic effect on you financially. You have to be ready for unexpected financial exposure. Otherwise, your long-term goals are in danger of going unrealized. Besides, you have to look after the financial security of your family. Lastly, don’t neglect all necessary forms of insurance, such as short-term and long-term disability, medical coverage, home and auto, business, and umbrella insurances. Having a financial plan and a high standard for your financial health can help you escape hardship or even ruin.

Conclusion

Understanding the basic principles of financial management is key to a healthy, fulfilling life and to the success of any company. From organizing your finances to planning for the unexpected, each tip mentioned above will help you prepare for uncertainty and make more strategic decisions. Never neglect sound financial planning and advice. It is one area that all successful individuals and organizations have in common.

Sound Accounts helps individuals and business owners make the most of their finances with individually tailored bookkeeping service plans. Contact us today to get started and see the difference an experienced bookkeeper can make for you and your business.

To learn more about financial management, check out our frequently asked questions and answers below.

FAQ

What is the most important principle of financial management?

There are several key principles to good financial management. One that should always remain a priority is to organize your finances. Good organization helps you stay in command of your money and future. Additionally, creating and following a budget will help you meet your financial goals.

What are financial principles?

Financial principles are guidelines that people and businesses can follow to avoid financial hardship and continually build and expand.

Why Are Financial Principles Important?

A few primary reasons financial principles are crucial are that they provide you with a framework you can follow to maximize your earnings and minimize expenses. Sound financial principles enable us to move ahead with a plan instead of making uninformed and reactionary decisions that don’t get us ahead.

September 28, 2022
How to Fund Your Small Business Startup or Expansion: Several Options

One of the most important decisions that businesses need to make is how to get funding to fulfill their business idea and business plan. After all, you need money to purchase new equipment, venture into a different market, and launch a new product. No matter which industry you might operate in, you will need financing at one point or another. This is why it is crucial that entrepreneurs know what their options are. To help point business owners in the right direction, we have prepared the ultimate post. Here is everything you need to know.

1. Business Credit Cards

When it comes to small business or startup funding, business credit cards are a great option. The reason why you might want to consider getting a credit card for your business is that it is relatively easy to get one. The bank does not care how long you have been in business, as long as you meet the minimum eligibility requirements and eligibility criteria. Therefore, you should be able to gain access to money if you have a decent credit score and are making a profit. Although you might consider credit cards to be a great option for making payments for purchases, they provide a type of financing called a line of credit.

According to a survey conducted by the Federal Reserve Small Business Credit, it was found that around 53 percent of small businesses rely on credit cards for funding operations. This is why you should consider the option. Besides, a business credit card could be the perfect alternative to a business loan, especially if you only require minimal funding. Moreover, getting a credit card could help you establish business credit history and separate your business and personal finances. You may also need a personal guarantee to qualify.

2. SBA Loans

Another way to fund your small business startup or expansion is by seeking an SBA (Small Business Administration) loan. Keep in mind that individual lenders who have been approved by the US Small Business Administration can only offer such loans. The reason why they are worth considering is that they come with lower interest rates. You would only need to pay a higher interest rate if you get a disaster loan. With ten different types of programs available, business owners have several choices for financial assistance. The (7a) program is widely popular as it can provide up to $5 million.

With most of the SBA loans being taken up by startups, you should be able to get approved. However, the process is neither easy nor quick. If you don’t have time to spare, you could opt for the SBA Express loan program, which can provide up to $500,000. Make sure that you meet the requirements if you plan on applying. On top of this, you are going to need a business plan to cover monthly payments for most loan programs. The fact is that the US Small Business Administration prefers business owners who have some experience and are willing to agree to favorable terms.

3. Crowdfunding

If you want to fund your business, you need to consider all your options. A great way to finance your startup or expansion is by using crowdfunding platforms. They put entrepreneurs with a vision at the forefront and offer a quick route to raising money. Startups have three main types of crowdfunding options, which include investment (We Funder), debt (Kiva), and rewards (Indiegogo and Kickstarter).

Business owners have to share their objectives and goals to attract a large group of people to invest in their venture. Keep in mind that marketing is necessary for a successful campaign. However, the final reward will be worth it once you get the necessary funding.

4. SBA Microloans

In addition to the above, you also have the option to seek an SBA microloan. Only approved intermediaries, such as CDFIs (Community Development Financial Institutions) can offer SBA microloans. However, you should know that only a maximum of $50,000 can be granted, while the average loan tends to be around $14,000. Since the microloans are term loans, you will have up to 72 months to pay them off. You should be able to use the funds for purchasing inventory or working capital.

5. Additional Microloans

There are other microloans available besides SBA microloans. Small businesses should consider the following options:

Local Microlenders: One of the best ways to get funding is by opting for a local microlender. There are microlenders in just about every community throughout the US. However, these small non-profit organizations do not advertise their offerings to the public.

Kiva: It is a trust-driven and community-based platform that entrepreneurs can rely on to crowdfund their business from philanthropists. You can borrow up to $15,000 at a time. A great thing about these loans is that they provide support to struggling businesses and have an APR of 0%. All you have to do is prove to the network of lenders that you have character and are committed to helping your community thrive economically.

Accion: CDFI partners of Accion offer loans worth $5,000 to $100,000. You will appreciate the fact that credit requirements are on the flexible side. Besides this, you can even seek assistance with your application.

6. Bank Loans

Even though you might be thinking about heading to a credit union or bank before considering any other option, you need to understand that startup businesses have a difficult time getting a bank loan. This is because banks have strict lending standards which small businesses sometimes cannot meet. In order for a bank to provide a loan to a startup, it would have to ensure that it is not overly risky. It would have to require you to provide a personal guarantee, a down payment, excellent credit, and a strong personal qualification or experience in the industry.

7. Equipment Financing

If you want to buy machines and equipment, you should be able to get an equipment loan. It is the same as any other conventional loan, since you would have to pay an amount every month for a specific period of time.

The proceeds would be used for funding the purchase of the machinery or equipment. As the equipment would serve as collateral, the requirements are less strict which means that you should be able to get a loan without much effort. Apart from this, you could opt for equipment leasing. All types of assets that you use for your business can be leased, such as furniture, kitchen equipment, and computers.

8. Line of Credit

Unlike a business loan that provides a lump sum of cash up front, a business line of credit provides a specific amount of credit over a period of time. You just have to keep paying back what you owe if you want to keep using this funding option. It is possible to get a long-term line of credit.

9. Short-Term Financing

For those of you who simply do not qualify for traditional funding, it might be best to opt for a short-term loan. They have a short repayment period of anywhere from a few months to a few years. However, you will have to be prepared to pay higher interest rates.

10. Personal Funding

Have friends or family members who can chip in? You might want to consider seeking personal funding. It is one of the ways in which small business owners fund their operations. However, personal funds tend to be a huge gamble, especially if you plan on using up all your savings. In case you use personal funds, it is important that you move towards establishing business credit to avoid serious implications. It would also enable you to access more capital. You should be able to get the business up and running without having to compromise your personal assets or relations.

If you cannot get a business credit card, you can always use your personal credit card as long as you have a high limit. It would allow you to make those initial purchases. However, you have to keep in mind that using a personal credit card for your business expenses can hurt your credit score. Using your savings can be even riskier. You might want to borrow from home equity. Otherwise, you have the option to withdraw money from your retirement plan.

Conclusion

Running a business is tough. As an entrepreneur, you need access to funding. As there are different options available, it is important that you weigh your options carefully. Discuss your choices with business partners, financial planners, and choose those that align with your plans.

Sound accounts helps business owners succeed with top-notch bookkeeping services and trusted advice. Connect with us today to learn more.

FAQ

How do I fund my business expansion or startup?

In order to fund your business expansion, you should consider taking out a bank loan from a traditional bank or credit union and using your business credit card, along with applying for federal grants and linking with other investment options like angel investors, equity investment partners, venture capitalists, and individual investors. You can also leverage your real estate and take advantage of other funding opportunities from personal investors and other private lenders.

What are the most common ways to fund a small business?

The most common ways to fund a small business is through personal funding and business loans.

What can I do if I don’t have good credit?

You can borrow against your home equity, partner with friends or family, find private equity lenders willing to lend to you, seek grants, and more.

September 7, 2022
Breakthrough Small Business Ideas: 2022 Edition

When it comes to launching a new business, there are many ideas that you can try out. You have a range of options when it comes to building a lucrative business. This has resulted in many entrepreneurs succeeding. Many business owners are able to meet consumer demands simply by using the internet. With the right products or solutions, there is no limit to what you can achieve.

However, with every business venture, there is the possibility of either success or failure. Successful entrepreneurs and breakthrough innovators understand that long-term success is more than just a good business idea. It takes discipline, smart money management, good leadership, creativity, adaptability, funding, clear goals and much more.

But today we want to start off by sparking your interest and imagination with a handful of breakthrough small business ideas. Once you’ve narrowed down your focus, you can begin to turn your attention to the finer details of building a business. Let’s dive in.

1. Create an Online T-Shirt Business

One of the best small business ideas that have become incredibly popular in 2022 is an online T-shirt store. You can use a platform such as Shopify or Printful to get going. With just a bit of imagination, you will be able to launch your brand. Besides selling T-shirts, you can offer additional items like sweatshirts, shorts, prints, mugs, and posters.

2. Dropshipping Business

Breakthrough technologies have made it possible for dropshipping businesses to flourish. It offers the easiest option for launching an ecommerce enterprise. The best thing about this route is that it doesn’t require you to buy any products or keep a costly supply of inventory on hand.

There are even dropshipping apps that you can use to sell items. Avoiding the expense of spending money on manufacturing or warehousing, you will be able to focus on getting your marketing and branding just right. Innovators are selling all types of things including women’s clothing, jewelry, camping gear, collectables, educational materials, office supplies, toys and much more.

3. SEO Business Expert

Search engine optimization (SEO) has become incredibly popular in recent times. If you are tech-savvy and have an understanding of the latest technologies, you can provide advice and serve as a business expert. It’s about time that you put your skills to good use. Some of the ways through which you can earn as an SEO expert include content creation, link building, and website optimization.

4. Offer Online Courses

Have a passion for teaching? You can turn your hobby into a successful business by selling online courses. You will need to create a strong personal brand in order to convince people to sign up. Even if you don’t feel like making a course, you always have the option to teach online. There is a demand for just about every subject, from English and foreign languages, to tech subjects, art and more.

5. Video Producer and Online Influencer

For those of you with a strong creative side, becoming a video producer is a great option. As YouTube is one of the biggest websites in the world, you can start by uploading content and promoting it. It shouldn’t take long before you start earning money if you stick to content that folks are looking for.

Make sure that you create interesting videos with timely subject matter, genuine conversation, humor, and honesty. You will need to start by learning how to record videos and edit them. With plenty of challenges along the way, there’s a lot to be excited about.

6. Graphic Design

If you’re more into graphics and visual content, you can start providing graphic design services. There’s always a demand for graphic designers. It takes some training and once you get going you will need to differentiate and set yourself apart from the pack to get noticed.

You can take in-person or online courses from universities, community colleges, and online educational sources like Udemy, Coursera, and Skillshare, or even contract with a personal teacher or mentor.

7. Website Developer

Consider becoming a website developer. It takes graphic design to the next level and combines it with SEO skills, marketing tools, professional writing, programming and more. Businesses constantly need to improve and upgrade their websites and landing pages, so you would have no trouble growing your company. Besides, you will get to work on all types of websites and business owners which will give you a wide range of contacts and experience. Although it can be rather challenging, you are bound to enjoy your work.

8. App Development

Another possibly lucrative small business idea is to provide app development services. Since every company wants to have an app of its own, the demand for this kind of service is big plus.

If you’re a programmer, software developer or have skills in these areas, consider combining some creative ideas with your skills to make some useful and memorable apps.

9. Theme Designer

A breakthrough small business idea that you need to consider is becoming a theme designer. Similar to a website developer, you would get to work on designing various themes or templates for websites. It can be fun to come up with new website themes for companies and individuals to use.

It will allow you to flex both your creativity and your technical muscle and establish you as a go-to creative in your field that companies can look to for solutions.

10. Translator

Do you have a strong command of two or more languages? Then, you can provide translation services in various capacities. It is a great alternative to teaching. As a translator, you can work with corporations, government agencies, diplomats, the military, non-profits and others.

Your job can involve translating websites, print materials and recorded assets and collateral to ensure that each business is able to enter a different market. You can also work as a translator in-person during meetings and negotiations. This small business idea requires a minimal investment once you’ve become proficient in additional languages. No matter the condition of the economy, there will always be a demand for translation services.

11. Social Media Management

Most businesses require a social media presence in order to thrive. Since it can be time-consuming, most companies prefer to outsource their social media management work. This is why you can expect to find plenty of work once you start providing services and proving you know what you’re doing.

Make sure to keep up with the latest trends in order to succeed. You can offer different packages to clients based on the business type, market, and level of commitment.

12. Remote Customer Service Agent

Prefer helping others with problems they might have? Starting a call center will allow you to work as a remote customer service agent. The job would involve responding to queries and ensuring that you resolve every person’s issue. You will communicate with people via email, chat, phone, and other ways.

Customer service agents are tremendous assets to all companies and there remains a consistent need for experienced and capable representatives in this field.

13. Virtual Assistant

Companies today sometimes need the help of a virtual assistant to operate. You can make good money by providing the services of a virtual assistant to a number of companies. The job would involve writing content, answering emails, scheduling, managing resources, hosting meetings, and other tasks. You might even need to host interviews, perform data entry, conduct research, and other activities.

14. Remote Sales Team

If you have superior communication skills, you also have the option to employ a remote sales team and make money from each company you contract with. With most companies that adopt a lean approach, you can expect to find clients around every corner. As long as you maintain a high standard and strong sales figures, you will have clients.

You’ll need to excel in communication of all kinds, personal organization and self-discipline, strong leadership and training standards, and consistent follow-up with your team.

15. Affiliate Marketing

Take advantage of your online presence by leveraging affiliate marketing to increase your income. Affiliate marketing involves promoting a product or service that another company provides. It involves the use of blogging, social media, advertising, and other methods to convince customers to purchase things from a specific company. Every time your user purchases the product using one of your links, you will get to earn money.

16. Lead Generation Service Provider

Since increasing conversion rates is something that most businesses are interested in, you can become a lead generation service provider. What you will have to do is focus on lead generation activities. It would allow you to reach out to strangers and convince them to make a purchase from a specific company.

You will use digital strategies, social media, customer service, along with more traditional strategies like mail marketing, events and more to capitalize on every potential customer.

17. Handmade Goods Shop

If you already make handmade goods, you can sell them on a platform like Etsy or Amazon. It allows people who are interested in DIY to earn money doing what they love. Therefore, it is a viable business option to consider.

You can make and sell just about anything, fine woodworking products like furniture, crafts, clothing, toys, art and much more.

18. Start Baking

Since there is always a demand for food, you can start baking and generate revenue. You could offer all types of baked goods, such as bagels, macaroons, cakes, and croissants. A great thing about the online world is that you can even learn new recipes online and sell them to customers.

You can contract with coffee shops, restaurants, bars, and other businesses to carry your products, along with selling at local grocery stores and farmer’s markets and even online.

19. Organic Beauty Shop

As people become more conscious about how they look and about their well-being, the market for beauty products continues to grow. To enter this competitive market, you will need to create unique beauty products that connect with a wide audience.

You can use the internet, video marketing, in-person events, farmer’s markets, fashion shows, and much more, to promote your brand.

In Closing

Creating a thriving business takes a lot of time, work, creativity, capital, and help. You can build your skills and assets over time. However, initially, you need a great idea for what kind of business you want to take on. Consider our suggestions and others you may have come across. Find collaborators who can help you realize your vision and when things get difficult, don’t give up, simply adapt, learn more, and innovate.

Sound Accounts helps business owners increase their productivity and find greater success with superb bookkeeping support. Connect with us today to learn more about how Sound Accounts can help you get the most from your assets.

To learn more about small business ventures, check out our frequently asked questions and answers below.

FAQ

What is one of the most profitable business ideaz in 2022?

Business consulting has become one of the most profitable business ideas in 2022. Combining a range of skills like management, leadership, mentorship, tech skills, financial planning, communications, analysis, negotiation and strategy, this career allows you to market to and help a wide variety of clients.

What Can I Sell In 2022?

The choices are virtually limitless: T-shirts, cookies, website themes, toys, vacation packages, wellness products, advice, training courses, cleaning products, beauty aids, antiques and much more.

What Industry Will Boom In 2022?

The IT industry will experience a significant jump in 2022. As more of us are doing business online, working remotely, and communicating digitally, the need for IT support continues to rise exponentially.

August 24, 2022
Bookkeeping Strategies to Improve Business Performance
Financial professionals are under significant pressure to work faster and deal with more complex data while ensuring they keep costs at a minimal. They don’t just spend all their time gathering and reconciling data, there is a lot more that accountants can do to improve the financial performance of a business.

Accounting is a process that records transactions and maintains a chart of accounts. However, it can help with strategy and management. Business owners of both small and large enterprises need to focus on improving their accounting processes to ensure their current ratios and cash flow are favorable.

It is vital that business owners utilize quality accounting standards to ensure they’re making the most of their resources. Every successful business owner knows that accounting professionals play a huge role when it comes to improving business performance. So, if you’re looking for bookkeeping strategies that managing accountants and auditors suggest, you have come to the right place. Here’s everything you need to know.

1. Centralize and Streamline General Accounting Processes

One of the bookkeeping strategies that you and your employees need to consider implementing is centralizing and streamlining the general accounting processes. The fact is that the way an organization is structured to deliver accounting processes and accounting functions, is integral to successful financial management. It is the only way that a business can support all of its needs and those of its clients. By combining repetitive or common processes into a single location and across all departments, you will create a shared services center.

Since less than 20% of businesses leverage shared services, it will allow you to gain a competitive edge over other players. Besides, you will get to enjoy several benefits, such as fewer errors and a much faster cycle time. In fact, opting for a shared services center will allow you to meet all your goals and enable your business to get more things done. Moreover, you’ll complete more work in less time. Hence, you don’t want to overlook this bookkeeping strategy.

2. Encourage Strong Data Governance

Another excellent bookkeeping strategy worth looking at is the implementation of strong data governance policies. It is incredibly important to ensure clean and consistent data when it comes to general accounting. It is the only way that you can generate the right financial statements and financial reports, and get an accurate representation of the organization itself. It includes financial data and a chart of accounts.

By ensuring proper data governance, there is no limit to what you can achieve. Implementing a standard policy will ensure that you are able to get more done. Organizations that implement finance data definitions have an easier time reporting and meet all their KPIs compared to organizations that fail to do so. Moreover, you will get to perform much better as the possibility of making errors would be significantly reduced. You will also encourage better customer satisfaction and trust, strong compliance, and overall financial health.

3. Standardize Accounting Processes and Assign Process Ownership

If you want to improve the accuracy of your accounting records, including accounts receivables and the cash register, you have to standardize accounting processes and assign process ownership to specific employees or to certain members of your accounting team. Process standardization is critical to performance. It is actually considered a prerequisite for successful automation. Furthermore, end-to-end process management relies on shared services implementation.

When you standardize the accounting processes, you will be able to achieve common finance processes which are integral for adherence to process ownership. This has an overall positive affect on performance management, a better grasp of sales revenue, and streamlines the managerial accounting process. This means that you will have an easier time managing finances and identifying areas where you need to improve.

Leveraging process owners and process standardization pays off in the long run. You’ll improve communication between team members, make the most of varied capabilities, and smooth out any rough or incongruent aspects within your accounting process.

4. Striving Towards a Continuous Close

A notable bookkeeping strategy that you should consider is performing a continuous close and striving towards pre-close activities. Since the month-end close can be a frenzy of activity, you would have no option but to ask the accounting team to work overtime for which you would have to spend a great deal more money which may carry a negative impact on your financial condition. This is why you need to focus on ensuring a continuous close. It will allow the department to collect and analyze information on time. Besides, it can be quite stressful for your and your employees to take on the work at the last minute.

If you look closely at a leading organization, you will come to understand that working toward a continuous close is likely to even out all the work so that everything is completed by the month-end without delay. It is the only way that you can prevent your accountants or bookkeepers from working overtime. You should consider using cloud technology and automation to implement continuous accounting. It would allow financial data to be accessed in real-time.

Even when you perform some pre-close activities, it will become a lot easier to get everything done on time. This would prevent the likelihood of mistakes. You can rely on these activities to lower the cost of general accounting processes as well. Therefore, you don’t have any excuse to avoid this bookkeeping strategy.

5. Automate and Integrate Accounting Systems

In addition to the above, you should consider automating and integrating your accounting systems and processes. Even though automation is necessary for improving the performance of your finances, you first need to focus on understanding and streamlining the processes as it would allow you to maximize your return on automation efforts.

A commercial ERP software should help streamline general accounting and provide the results that you are looking for. It will operate as a primary system for general accounting. However, the emergence of cloud-based tools has changed the game. It has become a lot more affordable for organizations to improve their financial activities because of the availability of these products. As long as you take advantage of such tools, you will improve general accounting and reporting, which would have a positive snowball effect on business performance.

As you might already know, manual data entry is likely to cause errors no matter how experienced or careful your accounting team might be. For quality data, you need to switch to an integrated system. It will facilitate effectiveness and efficiency so that you don’t encounter problems later down the road. When you consider top organizations, you will come to realize that their internal or external system is linked and automated. Only through automation can you expect better KPI results.

For instance, you will benefit from correct journal entries when you opt for an automated solution. You should keep in mind that consolidated financial statements require the use of software to avoid the possibility of any mistakes. Otherwise, you could make costly errors that jeopardize your business. Don’t hesitate to put automation to work for you, your bookkeepers, and your management accountants.

6. Leverage Emerging Technologies

Lastly, you need to keep an eye on the latest technologies to ensure that you implement them early on. The emerging tools are there for a reason. You can use them to improve general accounting. Some examples include blockchain, cognitive computing, and robotic process automation (RPA). For those of you that don’t know, RPA is actually server-based, and it combines different processes with business rules or decision models without requiring much human oversight.

As more and more businesses realize that RPA has a lot to offer, it is in your best interest to jump on board. The last thing you want is to miss out on some amazing opportunities that may even improve your profitability ratio. You will be truly impressed by what the latest technologies can do for you. They can help your business unleash its full potential. The most successful bookkeepers, business owners and management accountants are those that leverage the latest offerings.

Conclusion

It is important that you adopt different strategies to ensure that your business succeeds. Consistently high business performance requires a high level of bookkeeping strategy and financial management. At the end of the day, it all comes down to having an open mind, getting the help you need, staying organized, using the tools at hand, and keeping up with the latest trends.

Sound Accounts helps business owners like you succeed with superior bookkeeping strategies that improve business performance and solidify long-term success. To learn more about the many ways we can strengthen your business, connect with us today.

For more information about implementing better bookkeeping strategies, check out our frequently asked questions below.

FAQ

How can accounting and better bookkeeping strategies Improve performance?

Accounting is considered the language of business. It allows you to create and refine your workflow, as well as minimizing mistakes. By ensuring that proper accounting practices are followed, you can expect your organization to succeed.

How Does Bookkeeping Improve Your Business Operations?

Bookkeeping improves business operations by ensuring that you gain access to accurate records which you can use for making decisions.

Great bookkeeping adds tremendous benefits, including improved services, a better handle on cash-flow statements, a streamlined accounting process, better performance management, and a closer watch on resources and items. It readies you for E-Commerce Capability and prepares you for better operational strategies, diversification strategies, and overall corporate strategies.

It also helps you make the most of your financial reports, financial statements, and other departmental reports, smooths over processes for employees so you can make the most of their capabilities instead of watching them spin their wheels on other things. It empowers your accounting research, improves professional services for your clients, improves client trust and loyalty along with customer experience, helps you navigate changing financial conditions, and with the right people in place, allows you to overcome the challenges of accounting.

How important is learning when it comes to finances, bookkeeping, and accounting?

It is important to stay current when it comes to ongoing education within principals and practices of accounting and economics. For a business owner, your grasp of financial and investment concepts will greatly affect your outcome and your position in the market. You can take online classes, join professional groups, get mentored by a professor of accounting, read the journal of accounting studies and the journal of accounting research, and shadow excellent bookkeepers both within your organization and others finding consistent success.

What are 4 of the most important activities In bookkeeping?

Bookkeeping involves many practices, some simple, many that are more complex. These are simply 4 of the most common practices:
- Analyzing financial transactions and ensuring that they are assigned the right account.
- Writing journal entries that are debited and credited to the appropriate accounts.
- Posting entries to relevant ledger accounts.
- Adjusting entries once the accounting period ends.
August 17, 2022
How to Organize Business Expenses like A Bookkeeper
As a business owner, when it comes to organizing business expenses, there is a lot that you can learn from a bookkeeper. After all, a bookkeeper knows how to manage payments and prepare financial statements. The fact is that running a small business is no easy task. There is a lot that goes into it.

You have to know how to track and organize all your business expenses to ensure that you’re able to make the necessary payments on time, run your business from day to day without missing a beat, and plan ahead more strategically. Thankfully, there’s no need to stress since we’ll show you how to organize your business expenses like a bookkeeper.

Common Business Expenses

Before we take a look at our tips that will help you manage your business expenses, it is important that you have an idea about the most common expenses. These include:
- Cost of equipment.
- Employee salaries and bonuses.
- Travel and entertainment expenses.
- Employee training and development.
- Fees for cell phone, business phone, and internet.
- Protective gear for workers to perform their tasks.
- Fees for managing a bank account and paying credit card payments.
- Fees for professional services such as legal and accounting services.
- Business insurance policies include property, liability, malpractice, and auto.
- Advertising and marketing expenses like website development, brochures, and business cards.
- The payment for vehicles, office supplies, pictures, warehouse, equipment, and office space rent.
- Top Tips to Organize Small Business Expenses
Taking these into account, we’ll look now at ways to better organize your expenses.

1. Open a Separate Business Bank Account

One of the most important tips that you need to consider is opening a separate bank account for your company. The reason behind this is that you need to manage business transactions without having to deal with confusion, crossover from your personal accounts or other issues. Make sure that you don’t use this account for personal expenses. This makes tax time confusing, causes you to miss valuable deductions, can draw the auditor’s attention, and keeps you from using your resources in a focused manner.

It’s easy to open a business bank account. You will need to provide your personal details such as full name, birth date, address, ownership percentage in the business, social security number, and photo ID. As for the business details, you’ll need to let the bank know your entity type, employer identification number, business name, and business address, and have your business license and other documents ready for verification.

Choose a bank with a long history of helping business owners manage their finances, credit unions and banks that understand the needs of entrepreneurs and their families, along with providing a range of quality services for someone with your goals.

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2. Group Your Business Costs

When you start a new business, you will need to organize your costs and ensure they are under control. In order to do so, group expenses by type. You will have to organize the costs into two categories, one-time and recurring expenses. One-time expenses are those expenses that you have to pay for when you start a new organization, such as licenses, equipment, and permits. As for recurring expenses, they are expenses that you have to pay on a monthly or annual basis like employee salaries, interest, utilities, and rent.

3. Use a Spreadsheet

The next tip to consider is to use a spreadsheet to organize your business expenses. Although it is a low-tech approach, it is extremely effective at helping you to maintain company records across a range of areas and departments. It will allow you to manage cash flow, prepare for tax season/tax time, and account for all deductions.

To get started with a spreadsheet, you will have to track all your business expenses and go through your bank statements. Keep in mind that entries need to be made daily. Categorize every expense daily so that you don’t encounter issues later on. Google Sheets or Excel should help you get started.

4. Digitize the Hard Copies

Since dealing with paper can be time-consuming, it is best that you digitize your hard copies of all paper invoices, bank records, employee records, permits, trademark applications, contracts, receipts and invoices, tax papers and more.

When you digitize these documents, you will be able to access them whenever you need. This will allow you to free up office space. There are apps and software programs that will help you visually record and organize your records. Also, don’t forget to back up all your digitized data both on hardware and in the cloud.

5. Save and Organize Receipts

Organize receipts in ways that make the most sense for your business to ensure that you don’t encounter issues later on. Here are some ways that you can do this.

Use Google Drive

This cloud-based platform makes it possible for you to store just about every type of record. Besides, it supports Google Presentation, Google Sheets, Google Docs, and other tools.

Use Folders

Next, you should also make folders to suit your requirements. It is even possible to make use of sub-folders. You’ll be able to include all pertinent details to ensure that you can access every bit of needed info whenever the need arises.

Use Evernote

You can take notes of just about everything with Evernote, business ideas, conversation notes, thoughts on different business or personal matters, reminders to take care of something. It lets you access information with just a few taps on the screen to help you recall key information, so you can solve problems and create opportunities.

Use Welly Box

This web-based app allows you to collect essential information quickly and enables you to create an expense report, which is always an important part of business management.

6. Use Accounting Software

As your business progresses, you will need to use accounting software to record transactions and other financial activities. The more your business grows, the more imperative it is for you to do so.

With accounting software, you will have no trouble recording and categorizing financial transactions. You’ll be able to manage payroll, send invoices to customers, pay bills, study trends and generate forecasts, and much more. Here’s how accounting software can prove useful.
- It syncs all your financial data.
- It provides you with professional financial statements.
- It generates daily, monthly, and yearly reports automatically.
- It saves hours of work by ensuring that there is virtually no need for manual bookkeeping.
7. Import Transactions by Connecting Your Bank Account with Your Accounting Software

To benefit from maximum convenience, you need to connect your business bank account with your accounting software. This will allow you to import transactions with just a click of a button. Generally, small businesses should be able to utilize integration support systems for managing multiple transactions.

As there are plenty of solutions available, you need to pick one that suits your individual requirements. You must think things through and make a list of features you need. Finally, make sure it provides time-honored features along with occasional upgrades to its technology. Your software provider should stay relevant, engaged, and innovative.

8. Stick to Either Accrual or Cash Accounting

If you want to make sense of all your accounting records, you must select one accounting method and stick to it. It will allow you to better manage your business finances. Once you have selected the method, you will have to follow a set of rules that govern this method. Accrual accounting is required for businesses that generate annual revenue that is at least $25 million within the last three tax years.

Under GAAP (Generally Accepted Accounting Principles), accrual accounting is recognized and allows for financial reporting to be done correctly. On the other hand, cash basis accounting tends to be a lot more straightforward and is easier for some small businesses to follow. It only requires you to record transactions when you receive the payment. Similarly, expenses would only be recorded when they are paid.

9. Hire a Bookkeeper

Since organizing business expenses is no easy task, you might want to hire a bookkeeper to help you out. At the end of the day, your focus should be on running your business instead of stressing over accounting errors and bookkeeping details.

The fact is that your bookkeeper or bookkeeping service provider will know how to handle everything, from keeping accurate records and overseeing all bookkeeping needs. This includes maintaining digital records, spotting tax deductions, watching and recording travel expenses and business meals, knowing deductible expenses and business income, running financial reports to give you a clear financial picture, spotting financial issues, keeping you in budget and accountable for operating expenses, helping you avoid things like overdraft fees, mastering your bookkeeping software, organizing customer invoices, and fully understanding how your unique business financials affect your business plans.

In fact, you’ll be able to seek advice on how to improve the financial situation of your business. Furthermore, your bookkeeping service provider will give you regular reports and feedback to ensure that you are able to keep up with the latest trends and address issues early on. Even though it isn’t compulsory to hire a bookkeeper, you should definitely consider partnering with a bookkeeping firm.

10. Secure Your Business

Lastly, you need to secure your business. You might have to set up an S-Corp or LLC and get business insurance to stay afloat. The reason why you should consider an S-Corp or LLC is that it will allow you to separate your business identity from your personal finances.

Besides, it will ensure that you shield your personal assets from encroachment if you encounter any legal issues. Also, don’t forget to renew essential licenses on time to stay compliant.

Conclusion

Bookkeeping is immensely important for your business. Without excellent bookkeeping, your finances, and consequently, your business goals, go out the window. Business owners who manage money well succeed more often than those who don’t. It’s that simple. Don’t leave things to chance. Don’t let yourself get disorganized and fall victim to errors and losses. Organize your finances like a bookkeeper today and discuss your options with a professional.

Sound Accounts helps business owners increase productivity and reach their goals with top-notch bookkeeping oversight tailored just for you. Contact us today to learn more about how we can help you succeed.

To learn more about organizing your business expenses like a bookkeeper, see our frequently asked questions below.

FAQ

Is a bookkeeping service worth the money?

The short answer is yes! Bookkeepers are experts in a field that most business owners only carry a scant knowledge of. They can organize your entire bookkeeping system, develop better habits, help you make better use of your resources, save on taxes, and reach your goals. Plus, you’ll sleep better not having to worry about it all yourself.

What Is The Easiest Way To Track Business Expenses?

The easiest way to track business expenses is by using accounting software. The best software programs will automate certain functions and allow you to record others, then quickly produce charts and reports which provide you with a clear financial picture and the ability to make projections.

Can I simply keep the books the old-fashioned way, with ledgers and files instead of with software?

Yes, you can, and some people are still really good at doing so. Yet, for most people, software is a much better choice. It will help you avoid mistakes, keep digital files for everything, files that are instantly accessible and easy to back up, and provide you with a vast range of helpful features you probably never even knew you needed.
August 10, 2022