All Articles Tagged "bookkeeping"
(New York Times) — Few people start a business because they are good with numbers. In fact, the terms “accounting” and “financial analysis” tend to put business owners to sleep or send them screaming from the room. But to run a business effectively, most owners need to have some understanding of their finances. It is, for example, entirely possible for a company to be profitable but fail anyway because it does not have enough cash coming in to pay its bills. “It’s like a racecar that goes too fast and runs out of gas,” said Doug Tatum, a serial entrepreneur who is a visiting professor of entrepreneurship at Middle Tennessee State University in Murfreesboro. Business owners do not necessarily need to know how to prepare a balance sheet, but they do have to know which gauges to watch. One obvious step is to work with a bookkeeper or accountant, someone who can help navigate arcane accounting and tax rules and organize your affairs. But owners should understand that accounting is not just about paying taxes or reporting results.
(Entrepreneur) — Entrepreneurs keep a lot of the financial details of their business in their heads. Doing so has its advantages: No new software to learn, no danger of a system crash that loses all your data, and you can tweak your budget as often as you need without sitting down at a desk. But when you don’t have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits. It can also help you to stay out of trouble with the Internal Revenue Service. Here are five bookkeeping tips for entrepreneurs.
1. Plan for major expenses. Why it’s helpful: You’re less likely to miss business opportunities or have to scramble for a loan when the expenses become unavoidable. What to do: Put events like a major computer upgrade on the calendar a year in advance or, ideally, three to five years ahead. Acknowledge the seasonal ups and downs, something many entrepreneurs are reluctant to do.
(Entrepreneur) — Some small-business owners view bookkeeping as a burdensome task that takes them away from running their business. It makes others nervous, and they may second-guess their knowledge and skills in fear of the Internal Revenue Service knocking on their door. You don’t have to be intimidated or bored by accounting. Successful business owners don’t view bookkeeping negatively. They have adopted a few basic procedures to stay on top of the paperwork. By doing so, they save time, money and a lot of stress. Follow these basic steps to gain control — and stay in control– of your business’s bookkeeping tasks:
1. Use accounting software such as QuickBooks. Become at least generally familiar with the software: Know how to input checks, reconcile bank accounts, create reports and other data. Then choose one of five ways to maintain it:
A. Do it yourself. Take a class on the software and dedicate time each week to input information and reconcile bank statements. If you fall behind on inputting transactions, it can be difficult to catch up. This is when most people throw bank statements and receipts into a box and procrastinate. If this happens, you’ll usually end up with option E below.
B. Train and hire a family member to maintain the books. From a supervisory role and internal control system standpoint, it’s still critical to have a basic working knowledge of the software and procedures.