Got Stuck? Try These Tips To Streamline Your BEST EVER BUSINESS

One might be led to believe that profit may be the main objective in a business but in reality it’s the funds flowing in and out of a small business which keeps the doors open. The idea of profit is fairly narrow and only looks at expenses and income at a certain point in time. Cash flow, on the other hand, is more dynamic in the sense that it is concerned with the movement of profit and out of a small business. It is concerned with enough time at which the movement of the amount of money takes place. Profits do not necessarily coincide with their associated money inflows and outflows. The web result is that cash receipts often lag cash repayments and while profits may be reported, the business may experience a short-term funds shortage. For this reason, it is essential to forecast cash flows as well as project likely gains. In these terms, it is important to discover how to convert your accrual income to your money flow profit. You should be in a position to maintain enough cash readily available to run the business, but not so much concerning forfeit possible earnings from different uses.

Why accounting is needed

Help you to operate better as a business owner

Make timely decisions
Know when to employ a team of employees
Understand how to price your products
Discover how to label your expense items
Allows you to determine whether to increase or not
Supports operations projected costs
Stop Fraud and Theft
Control the biggest problem is internal theft
Reconcile your books and inventory control of equipment
Raising Capital (enable you to explain financials to stakeholders)
Loans
Investors
What are the GUIDELINES in Accounting for SMALLER BUSINESSES to address your common ‘pain points’?
Hire or consult with CPA or accountant
What is the best way and how often to get hold of
What experience do you have in my industry?
Identify what’s my break-even point?
Can the accountant measure the overall value of my business
Can you help me grow my enterprise with profit planning techniques
How can you help me to prepare for tax season
What are some special considerations for my particular industry?

To succeed, your company should be profitable. All of your business objectives boil right down to this one simple fact. But turning a profit is easier said than done. So that you can boost your bottom line, you have to know what’s going on financially at all times. You also need to be committed to tracking and comprehending your KPIs.
What are the common Profitability Metrics to Track running a business — key performance indicators (KPI)

Whether you decide to hire an expert or do it yourself, there are some metrics that you need to absolutely need to keep tabs on at all times:

Outstanding Accounts Payable: Outstanding accounts payable (A/P) shows the balance of cash you presently owe to your suppliers.
Average Cash Burn: Average cash burn is the rate at which your business’ cash balance is going down on average every month over a specified time period. A negative burn is a superb sign because it indicates your business is generating dollars and growing its money reserves.
Cash Runaway: If your organization is operating at a loss, cash runway helps you estimate how many months you can continue before your organization exhausts its cash reserves. Much like your cash burn, a negative runway is an excellent sign that your business is growing its cash reserves.
Gross Margin: Gross margin is really a percentage that demonstrates the total revenue of your business after subtracting the expenses associated with creating and selling your organization’ products. It is a helpful metric to recognize how your revenue compares to your costs, letting you make changes accordingly.
Customer Acquisition Cost: By focusing on how much you spend typically to get a new customer, it is possible to tell exactly how many customers you must generate a profit.
Customer Lifetime Value: You must know your LTV to help you predict your own future revenues and estimate the total number of customers you should grow your profits.
Break-Even Point:How much do I need to generate in revenue for my company to create a profit?Knowing this number will highlight what you need to do to turn a income (e.g., acquire more customers, increase prices, or lower operating expenses).
Net Profit: This is actually the single most important number you need to know for your business to be a financial success. In the event that you aren’t making a profit, your organization isn’t likely to survive for long.
Total revenues comparison with last year/last month. By tracking and comparing your full revenues over time, you’ll be able to make sound business judgements and set better financial objectives.
Average revenue per employee. It is critical to know this number so that you can set realistic productivity objectives and recognize methods to streamline your business operations.
The following checklist lays out a suggested timeline to take care of the accounting functions that may retain you attuned to the procedures of your business and streamline your taxes preparation. The accuracy and timeliness of the numbers entered will affect the main element performance indicators that drive organization decisions that need to be made, on a daily, monthly and annual schedule towards profits.
Daily Accounting Tasks

Review your daily Cashflow position and that means you don’t ‘grow broke’.
Since cash may be the fuel for your business, you never wish to be running near empty. Start your day by checking how much cash you have on hand.
Weekly Accounting Tasks

2. Record Transactions

Record each transaction (billing clients, receiving cash from consumers, paying vendors, etc.) in the correct account daily or weekly, depending on volume. Although recording dealings manually or in Excel linens is acceptable, it really is probably better to use accounting application like QuickBooks. The huge benefits and control far outweigh the cost.

3. Document and File Receipts

Keep copies of most invoices sent, all income receipts (cash, check and charge card deposits) and all cash repayments (cash, check, charge card statements, etc.).

Start a vendors document, sorted alphabetically, (Sears under “S”, CVS under “C,”and many others.) for easy access. Develop a payroll file sorted by payroll date and a bank statement record sorted by month. A standard habit would be to toss all paper receipts into a box and try to decipher them at tax time, but if you don’t have a small volume of transactions, it’s easier to have separate documents for assorted receipts kept structured as they come in. Many accounting software systems enable you to scan paper receipts and avoid physical files altogether

4. Review Unpaid Expenses from Vendors

Every business must have an “unpaid vendors” folder. Keep a record of each of your vendors that includes billing dates, amounts due and payment deadline. If vendors make discounts available for early payment, you may want to take advantage of that if you have the cash available.

5. Pay Vendors, Sign Checks

Track your accounts payable and also have funds earmarked to cover your suppliers on time in order to avoid any late fees and maintain favorable relationships with them. Should you be able to extend due dates to net 60 or net 90, the higher . Whether you make payments on line or drop a sign in the mail, keep copies of invoices delivered and received using accounting program.