Small Business Owners:
you don't have good bookkeeping methods in place
YOUR BUSINESS IS LOSING MONEY!!!
MY SPECIAL REPORT
Steps to Mastering your Finances"
you own a small business, you understand the importance
of understanding your businesses cash flow. In my
35 Years as a bookkeeping consultant I've consistantly
shown my clients proven, time tested methods that
save time, money, and
My proven techniques
- help you obtain
information in a usable format in the fastest and easiest
your bookkeeping process while keeping the integrity needed
to provide you with reports that help you manage your business
- keep it simple
Our website is
here to help you make the overwhelming task of bookkeeping
easier. We give you suggestions on streamlining your bookkeeping
process while keeping the integrity needed to provide you
with reports that help you manage your business better. We
will provide you with easy to understand reports that can
keep you in control and let you know where your problems are.
Our over 35 years
of experience has given us an opportunity to help many business
know the benefits of timely financial information and we want
to pass that information on to you. We believe in helping
you obtain information in a usable format in the fastest and
easiest way possible. We help you keep it simple and efficient.
We will help you with suggestions that have been proven through
repeated use of our many clients. We can help you make your
numbers come alive.
We are always delighted
and energized when our readers send us fascinating techniques
they use to make an overwhelming task easier and more rewarding
and we love to pass them on to our readers. Our readers and
we look forward to receiving your suggestions on categories
you would like to know more about and techniques that you
use to simplify your bookkeeping. Please e-mail us with your
suggestions to firstname.lastname@example.org
AS EASY AS 1-2-3
Are you too busy,
paper work constantly piling up on you? Are you losing sight
of your overall plan and letting opportunities slip by? Wonder
where your business will go next? Not able to produce the
desired results to help your businesses grow. You need to
have a complete and simple way to get the information you
need without delay?
Having a simplified
system that will streamline and restructure your financial
information into manageable segments can give you back the
control of your finances and provide you with the edge needed
to help your business grow.
These ď3 Easy Steps
To Mastering Your FinancesĒ are designed to simplify the process
of recording your financial information. It will give you
everything you need to know to shorten the time and management
needed to keep your records current. Whether you do it yourself
or have someone do it for you these 3 easy steps will help
make the process more efficient and avoid unnecessary mistakes.
NARROW DOWN THE CATGEGORIES IN YOUR CHART OF ACCOUNTS
Your chart of accounts
is used to organize your business information and produces
your financial statements. It categorizes all the activities,
in your business, by name and or number. These classifications
are used in your financial reports to help you see whatís
going on in your business.
Here are some samples
of categories in your chart of accounts:
uses a phone Telephone expense
buys items to
sells those items
buys paper goods
Well you get the
idea. Your Chart of Accounts are all the categories used to
organize your businessí financial information. All of these
categories are the building blocks to producing financial
reports that will help you clarify your vision and obtain
The idea here is
to keep it simple. Use as few categories as possible to give
you the most important information needed. Click here for
a simplified sample of a basic chart of accounts
you do your own record keeping or have someone else do it
for you, keeping your entries within the guidelines of the
chart of accounts you have set up helps you or your bookkeeper
be more efficient in recording your information. It sets guidelines
for how everything is going to be recorded avoiding miss-classification
and resulting in more accurate reporting. Make sure you analyze
any additions you want to make to it. Ask yourself, ďHow will
this new category enhance my ability to manage my finances
better?Ē If you can answer the question or the effect will
not have a significant impact on your reporting why do it?
Easy to understand accounting terms
All that talk about
assets, liabilities, equity and cash flow, book values, profit
margins, and working capital can be too much to handle. Well
the good news is, you donít have to understand every little
detail of accounting to understand and easily produce reports
that keep you in control. Here are some of the more widely
used terms defined in plain English.
Revenue: You sell
a product or perform a service that you bill for Ė thatís
revenue. Itís your sales and other sources of income.
Expenses: You know
the old saying ďit takes money to make money: thus expenses
were born for gas, electric, office supplies, postage, maintenance,
accounting fees, telephone, etc.
Cost of Goods Sold:
(AKA CGS) itís just a fancy way of separating the expenses
that are directly related to the sale or services. Your customer
wants to buy a widget from you. The amount that you pay for
that widget is a direct cost of the sale or CGS.
If you are in a
service business (such as computer repair and maintenance)
in addition to any computer parts that may be used is performing
your service, the employees pay that executed that service
is also part of CGS.
Assets: If your
company owns it and it has a value itís an asset. Itís what
you own or have and what others owe you. This includes, cash,
securities, accounts and or loans receivable, inventory, and
other tangible properties or intangible items such as goodwill.
money your company owes. This includes accounts payable, notes,
loans, taxes payable, and yes, even credit cards payable.
a list of all the money you owe for the purchase of goods
or services and to whom you owe it to. Picture a credit cared
statement that lists all the charges you made the previous
month, well your accounts payable is a similar thing expect
it show all bills that have not been paid to date.
A list of all money owed to your company for the sale of goods
or services and who owes it to you. One important thing to
remember, just because people owe you money that is not a
guarantee that you will get it. The older your invoices become
the harder they are to collect so monitor your receivable
carefully and often.
Equity: The easiest
way to explain it is: itís your companyís net worth after
subtracting all liabilities (all you owe) from all your assets
(all you own). The good news: your Accountant will set it
up and make sure itís maintained correctly.
A collection of profits and losses from the day your company
started that have not been distributed to yourself and other
stockholders. This is another area of your business finances
that your Accountant will maintain.
(AKA Profit & Loss Statement) Tells you what has happened
over a period of time; whether you made a profit or a loss.
Tells you how financially strong your company is by showing
you what your company owns verses what your company owes on
a particular date. Itís a snapshot in time, much like a report
card for your business on a given date.
For additional definitions click here
Break your work into easy to manage segments
your invoices and collecting money due is one of the most
important aspects of your business.
Having a good invoicing
systems and setting up payment terms is key to a healthy cash
flow. When customers clearly know how much they have to pay
and when they are more likely to pay on time.
Your terms should
include: price, delivery arrangements, payment terms, sales
tax rate, and interest and or debit recovery charges on late
Time is also an
issue when billing a customer. The longer you wait the longer
it takes you to get paid. Make sure you have a billing system
that lets you bill as soon as the product is shipped or the
pay on time, some have to be reminded and some have to be
threatened. Waiting for you money can cost you, so donít let
too much time go by without contacting a late payer. Provide
reminders in short intervals, at least every two weeks. You
can call, e-mail or snail mail but some form of communication
must happen. The sooner you ask the sooner you get paid.
If you are not
using an Accounting program like QuickBooks itís time to start
now. It will help tremendously with your process. With programs
like QuickBooks your work is quicker than ever on tasks ranging
from invoicing, payments, bill paying, payroll and more. With
QuickBooks, and many other similar programs, repetitive tasks
such as entering customer, vendor and employee information
is done just once and the program will do the rest with pre-filling
common forms such as invoices, checks, etc., saving countless
hours of repetitive data entry.
The reports that
can be generated can save you hours of having to hunt through
piles of paper to locate specific information and to be able
to quickly see the big picture of what you business is doing.
With a few key strokes you can obtain information on the sales
you did for any period of time, what your expenses are, how
much business you did with any one of you customers an the
list goes on and on.
process makes bill paying almost painless.
can break their payables up into 2 segments: the bills that
can be issued and payment made and received by the vendor
between the 1st and the 15th of each month and those that
can be issued and sent between the 16th and the end of the
month. This allows you to set aside a time bi-monthly for
you or your bookkeeper to process all the bills.
Look at each bill
when they come in and verify that the price is correct and
the product or service was satisfactorily received. Mark the
bill as payable or mark any adjustments that may be needed
and assign a category from your chart of accounts. Whether
you pay your own bills or have someone else do it for you,
the pre-qualification and assignment of a category makes the
process simple and more accurate.
Create two ďto
be paidĒ files, one for each of the bill paying periods and
place all your bills to pay in the one of the folders until
it is time to pay them. Of course unexpected situations can
arise and a check may have to be issued immediately but for
the most part bill payments can be issued twice a month. You
can then mail your payments timely as the due date nears.
If you place the date due on the top right corner of the envelope
to be mailed (where the stamp is placed) it will help remind
you when the payment has to be sent. If you pay your bills
online, you can still process all the paperwork marking the
bills with the date to be paid and the category to assign
it to and use a monthly tickler file to make sure you process
the online payment on time. By consolidating your billing
paying process this way you can save time and avoid late payments.
For credit card
charges make sure you create an envelope and put in all the
charge receipts for the month. If you order online or phone
print the acknowledgment or jot down the information on the
monthly envelope. When your bill is received record on the
statement the category for each entry as you are verifying
their validity and approve the bill for payment. Circle the
due date to assure timely payment and make sure who ever is
going to pay the bill knows how much you want to pay against
it. Mark any charges that were returned or should not be paid
with specific instructions if you are not taking care of them
immediately. Now it is ready for one of the ďto be paidĒ file.
If one of the bookkeeping
functions that your company has to do is payroll, if you donít
have a payroll company doing it for you, you should. It is
much more cost effective then you or your bookkeeper doing
it. You can use one on of the national payroll companies or
look into some of the local smaller companies. If find they
are usually less expensive and also much more attentive to
your needs. For more information on payroll services click