Make it a point to be in contact with your accountant regularly, not just at the end of the year. Doing so will make sure that any bookkeeping issue will be caught in time and will be easier to work out. Even though accounting software can enable practically anyone to monitor their business financials, having a good accountant as an advisor is valuable as they are able to give you sound opinions beyond setting up an accounting system. Your accountant should be able to help you with setting up your business from the start – creating an effective business structure, obtaining necessary permits and licenses (if required), setting up payroll, and even filing taxes.
Keep Your Books Up-To-Date By Entering Business Receipts Daily
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Money problems can be avoided by monitoring a few key financial areas. The good news: you don’t have to be a wizard at financial statement analysis; you just have to be vigilant.
Here are 3 things ways to make sure that you’re in tip-top financial shape.
1. Increase your income
One of the best ways stay in fighting financial shape is to make more money. Obviously that’s easier said than done, but here are a few things you can do to keep increasing the bottom line:
- spend your time on tasks that make you the most money
- increase your rates
- consider offering a new line of services
- partner with a business in a related industry, and become an affiliate marketer of their services
Certainly there are other ways, but you’re sharp, so get creative! There are plenty of ways out there to make more money if you put your mind to it.
Whatever you do, the point is this: making more $$ will keep your pockets healthier.
2. Watch how much you spend
A significant number of business errors are the result of not knowing where the money is going. Money should be spent for things that simplify your business and make you more productive. The income statement—also called the profit and loss statement—will help you evaluate your spending habits.
Your income statement will give you the percentages of each expense category relative to revenue. By comparing this report over multiple periods, you’ll discover how your expenditures may have changed as percentages of revenue.
When business is going well, you’ll want to keep spending the same percentages of revenue for the expense categories that are variable. With fixed expenses, such as rent and telephone, what will hopefully be an increase in sales will cause the percentages of revenue for these categories to favorably decline.
3.Keep an eye on your cash on hand
Monitoring cash balances is a simple process. It just requires a regular glance at your company’s balance sheet. Bank accounts appear at the top of this report, and you should frequently compare account balances over time.
Determining whether you have enough cash on hand involves some quick math. Cash, plus the receivables you expect will become cash within a month, should exceed the near-term debts you owe—called “current liabilities” on the balance sheet. Current liabilities include credit card balances, payroll taxes, sales tax, and other upcoming amounts you expect to pay.
4. Let a professional take care of your books while you focus on your business
One of the best ways to stay healthy is to visit the doctor regularly. In the same way, the best way to keep your books healthy is to leave the number crunching to the professionals.
At Alvarez Tax & Bookkeeping Services, that’s just what we do best. No matter what your needs are. Contact us today and let us handle your books while you focus on running your business.
The life of a small business owner, especially in competitive markets like Orange County and Southern California, is stressful. You don’t just have to worry about keeping your boss happy and paying your bills, you are the boss and have to keep your employees motivated and pay them as well as your own expenses. Throw in plans for expansion and exceeding client expectations, and your plate is already overflowing.
Check out these 5 easy tips for reducing your stress so you can stay focused on running a successful business.
Set aside time every day to identify your tasks. You can do this at any time but consider starting your day with this exercise. Not only will it help you focus on what needs to be done, but will help you plan your day, week, and month.
Most of your projects will have multiple tasks that need to be completed at different times, so identify what needs to be done urgently, what can wait until later, and what you can delegate to someone else — keep reading for more information on this critical tip. Once you prioritize your workload, you can get started and enjoy the satisfaction of checking things off your list.
Find a mentor
As a business leader, you spend a lot of time supporting and celebrating the success of your team, which is great for morale, but who’s your cheerleader? Finding a mentor who can offer you support and celebrate your successes as well as help you find your way through challenges can improve your motivation and give you positive reinforcement.
Take care of your health
It’s also critical that you take care of your physical and emotional health. For example, leave yourself time for lunch and make sure to eat nutritious meals, at least most of the time. You should also make time for 30 minutes of moderate exercise every day. It might sound like a lot, but a quick walk after dinner can help you maintain a healthy body weight and protect your cardiovascular health.
And finally, learn to delegate. Whether it’s a task for a member of your team or outsourcing business administration responsibilities like payroll and accounting, find the person with the expertise to make your life easier.
The experts at Alvarez Tax Services, a leading business and tax firm located in Orange County Ca provide the support you need to run your business efficiently, so you can focus on what you do best. Contact Alvarez Tax Services today for the expert bookkeeping service your business needs.
HERE ARE 4 TIPS TO GET YOUR BUSINESS RECORD KEEPING ON TRACK.
1) Separate Business & Personal Bank Accounts
The law varies depending on your type of business entity, but the reality is you should keep your business and personal finances separate. Most banks offer low cost checking accounts you can open and use solely for business. Just having all your business transactions run through their own account will help you keep your business and personal finances separate, which is important. It will also give you the most basic look at what money is coming in and out of your business.
2) Use Accounting Software
There are some great options out there that range in cost from Free up to $100’s per month depending on the size and complexity of your business transactions. Most have a free trial. Try testing a few to see what works for you, or talk to a bookkeeper to see what software they would recommend for business size and type. A few options you might consider are Quickbooks, Freshbooks, or Xero. Even if you are using a simple spreadsheet, that is a step in the right direction.
3) Scan Your Receipts
Receipts are the proof that your expense was indeed business related. In our world of technology and smartphones, there is really no excuse to not having record of your receipts. Many accounting softwares now have receipt scanning built-in, so you can snap the receipt on your smartphone and it auto loads into the software. You can also use Evernote to snap pictures of receipts to save in your digital filing cabinet. I strongly recommend storing your receipts in digital form. This way they won’t fade, degrade, or get lost as easily (We all know how tricky they can be!) Plus with all of the things we buy online, most of our receipts are already digital.
4) Hire a Professional Tax Preparer
Do it yourself Software is great for many people, but if you aren’t sure how to answer the automated questionnaire then you’re out of luck and it won’t think the ask the questions a tax professional will. As much as we all want to be able to save money and do it ourselves, you’re not a tax expert. How do you know what is and isn’t deductible; how to properly depreciate vs deduct; whether or not you need to file 1099’s for those you have paid but weren’t employees; or how much to pay in estimated taxes? If any of those terms confused you, that is good sign you want to work with a professional, and save the frustrations of trying to do it yourself. If you need help, please consider Alvarez Tax Services, you can contact us by calling us at 714-400-9201.