How to Take Your Business to the Next Level

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The Importance of Financial Statements

Sometimes all a business needs to get to the next level are good financial statements.  A business owner can be surprised at what their financial statements reveal.  Do you know exactly what inventory item you spend the most on?  Do you know what product or service brings you the most revenue?  Your financial statements can teach you what buying patterns need to be changed.  They can teach you what product or service is working best for you and then you can devise a plan to promote it more.  You can learn what aspects of your business you can leverage.

Are you aware of all of your expense items? Did you purchase a service with a revolving payment years ago that you aren’t even aware that you’re still paying for?  You can eliminate what you don’t need and what is no longer working for you.  Financial statements can make you aware of trends on buying patterns.  Are sales always low in January? You can be prepared for the low months but you can also determine a plan to try to increase sales in the routinely low months.

You can’t fix what you don’t know.

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Do you want to save time and money in your business?

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Rule #6

THE IMPORTANCE OF USING AN ACCOUNTING SYSTEM

One of the most important factors for a small business’ financial health is to use an accounting system. Accounting systems track revenue, expenses and produce financial statements.  They can save a business owner valuable time and money when compared to the alternatives.

Do you use Excel? While Excel might seem like the simple solution, it really isn’t the best use of your time. Why spend your time using a completely manual process when you could be using an automated one?

Are you a shoebox client? Are you not using any type of method during the year to track income and expenses? Do you just toss your receipts in a box and forget about them until tax time? Do you rely on your tax preparer to sort through your paperwork and determine your income and expenses right before the dreaded tax filing deadline? If this describes you, how do you know the performance of your business without proper and routine tracking of sales?

Your time is the most valuable asset your business has.  Use it wisely to grow your business.

The advantages to using an accounting system are numerous. I touch on some of the main advantages below.

  • Tracking Income 

Entering your financial information into an accounting system will automatically track all income. You will know what customers have paid and what invoices are outstanding. Knowing on a regular basis what amounts are owed to you can help you be proactive in collecting past due amounts.

  • Tracking Expenses

You will know what vendors have been paid and what items are open. Having this information can aid you in paying bills on time and avoiding late fees and penalties.

  • Financial Statements 

An automated financial system allows for financial statements and activity reports to be generated quickly, and accurately. Your financials are critical to assessing the health of your business. If you are a shoebox client, reports are not possible during the year.  As well, if you are using Excel you will need to manually prepare reports.

Having all of your information located nicely within an accounting system can help you save time and money, prepare your taxes and increase your bottom line.  A business can’t truly know their financial outcomes without proper tracking. If you are using Excel or are a shoebox client, I urge you to think about moving to an automated system. Your time is the most valuable asset your business has.  Use it wisely to grow your business.

One final point, as important as having and using an accounting system is, it is equally important to ensure it is managed properly.  If you are unsure of how to use an accounting system or how to accurately account for transactions you should seek professional help.  Too many business owners try to do it themselves and find themselves owing penalties and interest on incorrectly filed sales and income taxes.

If you would like to discuss how to get setup on an accounting system please contact us. We handle system set ups, training and routine review for accuracy.

Copyright 2014 Christi Rains, Alpha Omega Consulting & Bookkeeping, LLC

Financial Statements Explained

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Financial Statements 101

As a business owner, have you ever been asked to provide financial statements to a vendor, creditor or investor? Do you dread this question? Have you ever felt guilty because you don’t run routine financial statements? Maybe you feel uneasy to see the results. Don’t be. Regardless of what financial statements say about your company, they are your best resource at evaluating your strengths and weaknesses. It is through these statements that you can better plan; you can’t fix problems or prepare for the future without the right information.

It is important to remember the statement, ‘garbage in, garbage out’. Before you run financial statements, it is necessary that you confirm all information has been entered into your accounting system and that the information has been verified for accuracy.

Below, I have listed the three main types of financial statements. It is important to become familiar with the value that each report provides your business.  Continue reading

Do you want to save time and money in your business?

Standard

Rule #6

THE IMPORTANCE OF USING AN ACCOUNTING SYSTEM

One of the most important factors for a small business’ financial health is to use an accounting system. Accounting systems track revenue, expenses and produce financial statements.  They can save a business owner valuable time and money when compared to the alternatives.

Do you use Excel? While Excel might seem like the simple solution, it really isn’t the best use of your time. Why spend your time using a completely manual process when you could be using an automated one?

Are you a shoebox client? Are you not using any type of method during the year to track income and expenses? Do you just toss your receipts in a box and forget about them until tax time? Do you rely on your tax preparer to sort through your paperwork and determine your income and expenses right before the dreaded tax filing deadline? If this describes you, how do you know the performance of your business without proper and routine tracking of sales?

Your time is the most valuable asset your business has.  Use it wisely to grow your business.

The advantages to using an accounting system are numerous. I touch on some of the main advantages below.

  • Tracking Income 

Entering your financial information into an accounting system will automatically track all income. You will know what customers have paid and what invoices are outstanding. Knowing on a regular basis what amounts are owed to you can help you be proactive in collecting past due amounts.

  • Tracking Expenses

You will know what vendors have been paid and what items are open. Having this information can aid you in paying bills on time and avoiding late fees and penalties.

  • Financial Statements 

An automated financial system allows for financial statements and activity reports to be generated quickly, and accurately. Your financials are critical to assessing the health of your business. If you are a shoebox client, reports are not possible during the year.  As well, if you are using Excel you will need to manually prepare reports.

Having all of your information located nicely within an accounting system can help you save time and money, prepare your taxes and increase your bottom line.  A business can’t truly know their financial outcomes without proper tracking. If you are using Excel or are a shoebox client, I urge you to think about moving to an automated system. Your time is the most valuable asset your business has.  Use it wisely to grow your business.

One final point, as important as having and using an accounting system is, it is equally important to ensure it is managed properly.  If you are unsure of how to use an accounting system or how to accurately account for transactions you should seek professional help.  Too many business owners try to do it themselves and find themselves owing penalties and interest on incorrectly filed sales and income taxes.

If you would like to discuss how to get setup on an accounting system please contact us. We handle system set ups, training and routine review for accuracy.

Copyright 2014 Christi Rains, Alpha Omega Consulting & Bookkeeping, LLC

Financial Statements Explained

Standard

60025cea2be02e0c8038896e6f3ec833

Financial Statements 101

As a business owner, have you ever been asked to provide financial statements to a vendor, creditor or investor? Do you dread this question? Have you ever felt guilty because you don’t run routine financial statements? Maybe you feel uneasy to see the results. Don’t be. Regardless of what financial statements say about your company, they are your best resource at evaluating your strengths and weaknesses. It is through these statements that you can better plan; you can’t fix problems or prepare for the future without the right information.

It is important to remember the statement, ‘garbage in, garbage out’. Before you run financial statements, it is necessary that you confirm all information has been entered into your accounting system and that the information has been verified for accuracy.

Below, I have listed the three main types of financial statements. It is important to become familiar with the value that each report provides your business.  Continue reading