Discover Accounting Strategies that help you Grow Your Busin
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My name is Vathani Ariyam, and I am the author of this online course, thank you for picking up my path. I am just trying to help anyone to learn how you can grow your business if you have robust accounting strategies in place.
Do you want to grow your business? Then it is a good time for you to read this online course
"Discover Accounting Strategies that help you Grow Your Business"
Strategic management accounting is about having an accounting system that checks, accommodates, supports, and controls your strategic management goals.
Budgeting and cash flow monitoring are one of the many crucial factors in managing a business. If you do not know, how much you are receiving and spending, you do not know your real financial situation. If you go to work, you know your salary and plan how much you can spend out of it. Then the leftover amount of the surplus or deficit. Therefore, this applies to business management as well.
There are some more critical things to grow your business are, implementing a suitable accounting system for your business.
Also, draw up a business plan as your road map, setting up a contingency plan for your business in the event of a crisis. Further computerizing your accounts will help you, your creditors, debtors, and your staff as well. Finally yet importantly, my advice is that you should have at least basic accounting knowledge to achieve success is critical.
So to help you, I have written about the tools to grow your business. Moreover, gain accounting knowledge that will give you more power over your business.
Keep your accounts separate like getting to know the difference in the funds you receive from loans, any other income, and sales. Therefore keep different records to work smarter with money, do not allow the income structure to mix up. If not, you will not know the amount of money that your business is making.
I hope that you will enjoy this online course and thank you once again.
Please leave a useful review if you like the course that will inspire me to produce more courses.
- Small business owners and business course students
Accounting and planning strategies
A few accounting growth strategies include expanding through profits, accelerating income, building strategic business relationships, diversifying business operations, and streamlining current production operations. These growth strategies may also depend on the size and strength of ongoing business operations.
Strategic management accounting is about having an accounting system that checks, accommodates, supports, and controls your strategic management goals.
Strategic Planning and Management
Strategic planning is developing and defining a big-picture strategy for how your business is going to succeed. Both internal and external factors analyzed as well as how all elements are going to work together. Those factors might include your customer base and competition, your business’s culture, and the strengths and weaknesses of your staff, among others.
Strategic planning typically starts with three questions
1. Where is my business now?
2. Where do I want it to be?
3. How am I going to get there?
Strategic management is about managing your business to carry out the plan you defined in response to “How am I going to get there?”
Strategic Management Accounting Defined
Accounting is, of course, managing and analyzing your company’s finances. Strategic management accounting has about as many definitions as there are letters in the term. Nevertheless, the bottom line is that strategic management accounting implements an accounting system to examine, accommodate, and command your strategic management goals.
That is not all it does. Strategic management accounting can also help develop your goals. Accounting’s role would be to supply all of the financial data to management to ensure that the plan for “getting there” is doable.
Having a good plan, well-informed management, and a solid management accounting strategy is not static. Entrepreneurs must be able to adapt to changes, such as new regulations that affect your business, as well as new procedures that competitors are carrying out. Factors such as these may affect the way you spend or pile your cash. Consequently, the accounting will play a critical role.
Management Accounting Strategy Examples
Let us say that part of your business strategy is to overtake competitors by selling the same products at a deep discount. To implement this strategy, you will need to take advantage of wholesale volume discounts by buying large shipments, so that you can pass on the refund to your customers.
Accounting’s role in the planning process would be to run the numbers to make sure that the discounts you want to offer your customers are not so deep. Consequently, that makes you lose money. Accounting can then figure out where the funds will need to come from so that you can buy large quantities of products. They would also look at whether the cost of renting a warehouse to store the extra inventory will disprove the profit that this plan could generate.
You get the picture. You may not have labelled this process “strategic management accounting,” but that is what it is. If your goal is long-term growth, it is inseparable from strategic planning and strategic management.
Accounting Strategy Definition and Education
A couple of common reasons that strategic plans fail is that the goals are not realistic or that there are not enough resources to carry out the projects. Strategic management accounting can help prevent this by providing a reality check and ongoing analyses of costs versus revenues. In fact, in any accounting strategy definition, these functions would be at the top of the list.
Learn the importance of Cash Flow & Budgeting for your Business.
I would let you know the importance of "Cash Flow" for the heat of your business. Most small business owners when they make enough sales they think, my business is doing well. Then there is nothing for me to worry right now. Nevertheless, unfortunately, they do not believe about their outgoings and the profit ratio. Cash comes into the business through sales and that money used to pay for the various costs, and the difference between the two is the net cash. I cannot insist more and explain here about the importance of maintaining cash flow for the survival of your business.
What's the point of a budget?
A budget done correctly is the most accurate tool for analyzing your finances imaginable. It answers two fundamental questions.
1. Do I spend more than I earn?
An instinctive assessment is easy - if you eat up your savings or building up debts. You're likely to be overspending if this is the case before you can solve this, it's essential to get an accurate idea of the size and scale of the problem. Significant overspending can lead to a debt spiral and severe problems. That is why the Budget Planners designed to definitively answer this issue and give you a real assessment of your finances.
2. What can I afford to spend?
Once you know where you're spending, can start to alter and prioritize what you do with your money to enable you to stick within your means. While the budget planners include tools to allow you to work out how to prioritize within your means, the real difficulty is sticking to it. The Piggybank Technique designed to help you do just that.
How does budget help a business?
Budget is set using expected income and expenditure for the company for a period; it is something like setting your goals. Once you have placed your budget, remember to follow it up every week, so that you will know your goal mistakes in the spending pattern. Say, for example, if your annual income is one hundred pounds, and you spend ninety-nine pound. You will be happy knowing that you are keeping within limits. If you make one hundred pounds, and you are paying one hundred and two pounds, the result is misery. Therefore, you have to realize having a budget is essential for your business, and if you want to approach a bank for a loan, you need to produce a budget to the bank.
Use of Cash flow forecast for your business.
A cash flow forecast is the flow and movements of cash into the business. A lender will insist on seeing a well-prepared cash flow forecast. Most banks will supply a cash flow format to the people who are not familiar with the cash flow forecast. As with the budget, a month-to-month cash flow forecast is essential to make a comparison with the budget as well. Helps to make sure that you receive the cash for the sales in a particular month matches with the budgeted figure. It enables us to see the more delicate details of the flow of money to make plans. Depending on your business might be able to produce a cash flow forecast for a more extended period than the average annual forecasting. That said the question of accuracy would be there.
How to Organize a suitable accounting structure for your business?
The way you operate, your business and accounting for all the business transactions will give satisfaction in running a business. Otherwise will make you feel empty when you don't know the results of your business achievements. The results mean the accounting totals at the end of the month and the profit ratio that will help you to work harder towards your business and for your year-end tax calculations. When you are ready to choose an accounting system, use either of the two ways to do your accounts. One is the manual method, and the other one is using an accounting package. I want to recommend Quick books; it is straightforward to learn and suitable for small businesses.
It is easy to find by doing a google search because there are many varieties of accounts packages out there. Nevertheless, some might be very expensive, and some companies give out a bag with a monthly subscription, but you will not own it. It is usually easy to set up; you do not need to be the technical expert. Moreover, at the same time, you can get support from the accounts package company. If you want to speak to any staff before buying it online, you can go into the office supply store and talk to the team to get your doubts cleared. In addition, you can discuss this with your accountant as well. I will be writing the benefits of using Sage accounting package later in this course.
The type of control you need in the end
If you have decided to go for computerizing your accounts, get a simple package, load it up, and start putting your daily transactions. It is not tedious to practice; you can carry on like that for a month. You can get totals from the computer at the month-end and pass it to your accountant to do the rest of the work. When you start doing things like that, you will have better control over your business finances. Most of the accounts software packages will give a lot more information and not just the total of your sales and expenses. The best part is some packages will provide the future forecasts also, therefore by loading up information; you will be saving a lot of time and money. When you buy the software, you can put the cost of the purchase as part of your business expenses. You have to start your accounting work using this method at the early stages to prevent any pitfalls later.
How to Price your product or services?
Many business owners try to check the competitor's pricing plan. Then try to bring their price to the same level as the competitor's prices. When you price your product do not depend on other people's pricing levels. You have to make your costing like a cost of the product when you bought it from the manufacturer, the administrative and salary costs. The proper method is to do your calculations and then check it with your competitor's price level to see whether you are in line with their price. If you do not know the method to calculate, you have to get some help to avoid a mistake. Therefore do not copy their price in case; they have made mistakes in their calculations. You have to be careful in calculating your costs. Because, if the price is too high, there might be a possibility of not having enough sales. Moreover, if your price is too low, you will lose money because you are not covering your costs.
Watch Out for Hidden Profit Killers
Budgeting and keeping track of your expenses can help you identify the hidden costs that are costing you money every month. Periodically go through your budget, look at every significant loss, and ask yourself if the expense is genuinely contributing to the success of your business.
Staff expenses are the most obvious example of this—are employees accruing overtime without delivering substantive results? If so, it may be time to reconsider their compensation arrangement.
Also, look for things like underutilized equipment, excess inventory, and outdated or inefficient computing infrastructure that may be hampering your productivity. Additionally, you should consider if office space utilized in the most profitable way possible and warranty expenses.
Educating yourself about lean management and implementing a continuous improvement cycle is one of the best ways to manage the challenges of growth and keep your profits secure.
If you have a manufacturing business, take care of the excess inventory. Always make sure that you have the right amount by counting the stocks and reconciling with the purchase records. If there is a discrepancy, analyze the reasons for it as inventory is a significant issue in the manufacturing process. If you failed to have, the stock at some point if a customer makes a large order, you would not have the time to purchase and manufacture the item. Then you have to turn down the law. As a result, you might lose that particular customer forever.
Inventory is a significant item in a manufacturing company because their other expenses go along with it. Payment made to the staff who purchase the list if a mistake made in the order you have to return the stock and lost the amount that you paid for the team. In the meantime taken to replace the correct stock might be a bit too long and during that time, you might lose some orders.
Consider the cost of the staff helps to move around the stocks, warehouse space, electricity, taxes, and other expenses. The longer you leave your inventory in the warehouse, the possibility will get damaged or stolen so that these expenses will reduce your profit.
Other indirect costs are:
Insurance to cover the cost of the inventory in the event of an accident.
The cost of obsolete products and revision changes.
Accounting personnel paying the bills.
Impose Systems to track the inventory, including computers and other hardware.
Opportunity costs: Money tied up in inventory cannot use for something else
Inaccurate inventory not only kills the profits but also hurt productivity as well. When you get ready to start to produce Product A, you will look for the necessary parts, and if you do not find the production delayed. You understand your staffs to look for it and then go out to buy that in the meantime you would lose all the staff’s wages and the delay in production. The more you delay you forget more money as you cannot fulfill the demands.
The accuracy of the accounting records affects the cost of inventory if the history shows that you do not have a particular item. Them you will order that item without knowing that specific item is still with you. Therefore, this error made due to inaccuracy in the accounting records. Cash flow shows the amount that you have spent on purchasing a particular stock. Nevertheless, if you do not update your cash flow when the item taken out and used for some products, it will remain in the cash flow.
In the event of a financial crisis in your small business, you will need some help to save your business. Otherwise, your small business will push to the ground. You need to have a separate business savings account and deposit a reasonable amount of cash into the account on a weekly or monthly basis. So, you could use it to overcome the crisis. If you suddenly fall ill, you cannot close the business down; you will need help to run your business. Therefore, you should have a complete plan written down about the operation of your business, and the money has to save to keep it going
As a business owner, before even you start your business, you need to be aware of the above things to avoid the financial crisis of your small business.
There are even unexpectedly good things that can be disruptive. A classic instance is a small business that gets a considerable contract far beyond the company's current ability to fulfill it. Contingency plans lay out what should happen when one or more of these unexpected events occur. Every business – large or small – needs its unique contingency plan.
Why do we need a contingency plan?
Most entrepreneurs fear of sudden attacks and think whether their business could survive. As a result, most of the lost peace of mind and sleep as well.
The reasons that they set up a contingency plan are as follows.
There is no guarantee that the business will grow due to risks out there.
Even though you think that you are in control, but that is not true.
The people are out there to get you, as you are not alone.
People make mistakes all the time, and the effect grows faster and lose control.
Everything might change, and it is a question of survival.
Think about capital, cash flow, creditors, suppliers, and all-around accounting of your business.
To avoid facing disaster, plan, and analyze the vulnerability in your business in the following areas.
When the customer leaves your business faces disaster, so, plan needed to keep your customer. Competitors that are your biggest plunderers
Advancement of technology makes you obsolete
Raw materials costs rise and cannot afford a price cut.
It is not easy to replace reliable suppliers.
We have to prepare for natural disaster
Losing key personnel gives you disruption.
You might experience cash flow problems due to lack of credit control.
Most businesses fail within the first two years, or they leave the industry mostly due to financial mistakes. Therefore, care to maintain the budget and cash flow from the start of the business. Plan how to survive sudden turns for the worse. Have the right stuff for those times when everything goes wrong. Imperilled companies can execute immediate hands-on strategies for survival. Then one of the critical plan to create a business that helps to overcome many issues at the crises time. As it is a written document, and easy to go back, look for solutions.
What is a business plan?
A road map shows the goals to achieve, have an expected plan for sales and expenses that you could reach. See the sample business plan in the next lecture.
Sample Business Plan
TRADING AS A SOLETRADER FOR PETER MEDITAERRANEAN FOOD PRODUCTS
Nature of business.
A market survey took place. The results of the study summarized as follows.
There are a large number of shops, restaurants, nursing homes, supermarkets, and needing Mediterranean food within the area examined by the director.
There is a strong preference in the local stores for an Arabic person to supply the food, due to the communication problem.
Inquiries of 50 shops have led five requests for estimates once the company commences trading, any other market research done by you.
Some new stores will start with the people who have known to the director and the secretary for years.
Two supermarkets have shown interest in negotiating a supply and delivery service contract in summer, and three restaurants are interested in arranging for extra supply during Christmas season.
The company invited to provide food for some Asian & Caribbean shops to supply food.
The company will give the initial promotional offer to capture the market.
There are 200 shops, restaurants, supermarkets, groceries listed in yellow pages. However, our experience in this field shows more demand for this food supply by an Arabic speaking person.
The area contains a large number of shops owned by individuals who have serious language problems. Further lack of time to go out to buy stocks, insufficient storage spaces are interested in negotiating a contract for our supply and delivery service.
The company recognizes the value of supply and delivery service of an Arabic speaking person who known among the community and the personal recommendation is likely. As this is a cost-effective way of purchasing for them and willing to help their own community business.
What has the director done in the past regarding this and the above matters?
In addition to building their network of contacts and referrals, the company:
Leaves cards in local shop windows
Leaflet drop in selected areas, particularly those with small shops.
Approach the hotels for negotiating the supply and delivery service contract.
The staff will drop into small cafes to explain the service and the products.
Depending upon the response to the above, the company may also advertise in:
Local Arabic newspapers, Arabic directory/ magazines, e.g., Church magazines
The directors will raise their profile by attending community events, sample free supply of food, donating to needy organizations.
The company will have a policy to have a quarterly customer survey.
How often will you advertise?
Pricing and credit control
How will you price? Explain the method of pricing. Compare prices The registration for VAT is required, but when it reaches a threshold.
Do you want to sell on credit? Is it customary in your industry?
If yes, how will you assess their creditworthiness?
Discounts, terms of credit, built the cost in price.
Slow pay, follow-up procedure. A letter, phone, upfront money, arranging stage payments. Seven days' terms.
The company will be able to secure trade credit on most purchases of materials through recommendations.
If you sell on credit, how will you manage accounts receivable account?
What sort of facilities. Home, will you have customers visiting your place of business? Parking, interior space is it near your competitors.
Delivery van, storage space, coolers, and refrigerators. Prepare a list
Do you have enough skills? Details of marketing, invoicing bookkeeping
The company has appointed a Solicitor to deal with legal issues.
Public & products liability, motor, personal accident, and health insurance
How much cash and how many loans from a bank.
Cash flow forecast needed.
A market survey did into two categories. Explain how
1. Local shops, cafes, restaurants, groceries.
2. Hotels, supermarkets, hospitals, retirement, and residential homes, schools, and colleges.
The first part of the survey took place in the local area. The reason for this is the initial response is from the local shops owned by the Mediterranean.
Explain the number of shops
Identify your customers depending on your experience, channel of distributors, wholesalers, and retailers, then end consumer and intermediaries
Products and companies
Your strength and weaknesses.
How you will you get the word out to the customers must identify a cost-effective method of advertising.
Promotional value; before start-up or ongoing expenses, is it included in the budget, whether start-up budget or operational budget.
Sales forecast: how you have done it. Need numbers to prepare to look at similar shops.
Competition; what products and companies will compete with you?
Names and addresses.
Promotional budget. How much you spend on an advert, customer survey.
What is the proposed location: home or shop, if it is a store, what sort of shop?
How will you distribute goods?
Goods will be imported and distributed. How? Quality, customer service.
Location: Describe the type of site, space, zone, access, parking eg, transport, disability access.
License, permits health and safety regulation, insurance coverage. Describe.
Personnel, no of staffs. Quality of workers skilled and unskilled, recruitment process, training, pay methods, who does what?
Inventory of stock, an average value of a stock, maintain register lead- time order, and daily build-up.
Suppliers: Who are your suppliers? Names and addresses, do you intend to buy on credit?
Do you have a reliable delivery service?
How will you manage accounts payable?
What are the opportunities for the business in the coming period?
Do you intend to expand a business? How? Identify the shortage and fulfil it.
Main risks in the coming period
Risk analysis: customer satisfaction, losing the market, undercut by the other competitor, better delivery service. How to overcome these? Regular monitoring and evaluation, customer survey, producing and analyzing sales and profit margin reports, better presentation of the products, attending networking seminars.
Management and organization
Managing on day-to-day basis. Who? Who will take over in the case high absenteeism, what skills and experience that person will have? Prepare an organizational chart.
Professional and advisory support.
List board of directors
Personal financial statement
Director's and shareholder's wealth (net worth), banks will usually want this.
Start-up expenses and capitalization
Did you talk to others who are having a similar business and find out how much it will cost for contingencies, equal to 20% of the total?
Explain your research and how you arrived at your forecast of expenses. How much are your contribution and others and terms of proposed loans?
12-month profit and loss
Three years' profit and loss
Projected cash flow.
Keep your business and personal finances separate.
To save time and avoid hassles at tax time, clearly, differentiate between your different types of bank and credit card accounts. Deposit all your blogging, web writing, and freelance writing income into your business bank account. If you use your PayPal account for both personal and business transactions, make sure the different types of operations marked. Pay your business expenses with your business checking account or a business credit card.
Open a US dollar savings or checking account if you're Canadian.
I live in Canada, yet most of my freelance writing and blogging income is in US dollars. Therefore, I transfer my PayPal income (which is in US dollars) to my US dollar savings account. Then transfer those funds to my Canadian checking account when the US dollar is high. The exchange rate can be a significant source of passive income for the starving writer like me!
Neatly file every invoice, proof of payment, etc. related to your business expenditures.
When you are not sure whether you can write off particular service expenses against your income, need to keep the sales receipts. Then use when you are submitting your tax returns. Moreover, remember that every little thing you buy that supports or furthers your writing career. Things like writing resources, time management software, bookkeeping for small business books, web hosting fees, etc. – is a potential write-off. Read Income Tax Tips for Freelance Writers for more info.
Learn what expenses are tax-deductible.
Writing off certain expenses will lower your net taxable income. But don't wait until the night before your taxes are due to figure out what you can write off frantically! Keep your property tax, home maintenance, and insurance and utility bills because they are probably tax-deductible. Keep your car mileage receipts, writing or blogging course earnings, restaurant bills, and library penalty receipts. You would be surprised at how fast those small investments in your writing career add up to save you money at tax time!
Develop a system for organizing your paperwork.
Set up a tidy filing system, and keep your freelance writing or blogging invoices separate from your business expenses and tax write-offs. File your papers every week or month – don't let them pile up! Keep everything related to your writing or blogging career, but keep everything organized in labelled files or binders. Also, enter your bookkeeping information in batches to save time.
File your tax compliance reports on time. At this period, my simple accounting tips for small business get more complicated! If your writing or blogging income is high enough, you will have to set a particular reporting period and pay different types of taxes. Depending on the country, province, or state you live. It is where I jump ship! My future article will discuss this in more detail, and explore several signs it is time to hire an accountant or small bookkeeper.
Learn to know about cash flow, Budgeting, and financial performance of the company. Besides any manager will have to see the principle of cash management, because it is vital for decision making for the future of your business. Setting cash flow forecast even before you start your transaction, as you have to know where the cash is coming from and the how it spent. The vital factor is the cash flow has to monitor every week. Budgeting is crucial, so the manager will have to know what a budget is. How is that set up? Besides, How to follow the budget at least every month in the organization?
Then how will you know about the financial performance, you need to have proper financial reporting to assess economic performance. Otherwise, it is an impossible task. If you want to make changes or any development, it is crucial to have profit ratios calculated and analyzed that will help in decision-making.
Then again, the managers will have to know about costs such as production, administrative, and overhead costs. These are essential when a decision considered for the advancement of the organization. These costings will help you to arrive at the net profit when you make your calculations. Then that will help you to know wherever the money has overspent when it compared with the budget. If there is a negative difference between the budgeted amount and the actual amount of care should take to balance with the budget to revise your expenditure pattern. Therefore, the manager will have to have a sound knowledge of finances and its implications. Then easy to instruct your bookkeeper to do the work without any errors as that will damage your entity eventually.
You cannot start a business without capital. Determine what you have, what you will need, and how you will go about getting it. If you plan to seek investor funding or financing, start writing a business plan and practice your pitch. Research the costs associated with your business. Know how much money you will need and decide where it could come
Have you got enough capital?
Many businesses out there fail due to lack of capital, show yourself the money: You cannot start a business without capital. Determine what you have, what you will need, and how you will go about getting it. If you plan to seek investor funding or financing, start writing a business plan and practice your pitch. Research the costs associated with your business. Know how much money you will need and decide where it could come from, so prepare your budget before even you start up your store. Also, make your budget using estimated profit and Loss statement. Have some consultations with accounting companies if you want to be successful.
Why do the small businesses need a business bank account? I will explain a couple of reasons for it,
When your business transactions rise, you need to have a recording system to be aware of your business activities. If you have separate bank accounts, it will be easy for you to check your transactions that gives you a peace of mind.
In the event of having an inspection from tax inspector, this is the only way your tax inspector will become convinced while checking the bank statements, recordings with the corresponding invoices.
If you have a designated bank account, it will be useful for you to have an overdraft facility.
On the other hand, you need to learn to read the bank statements and be able to reconcile with your transactions. Moreover, if you have too many operations, you need to have a bookkeeper or outsource the work.
If you become confident with internet banking, it will save you a lot of time, and you could do the daily checks. Therefore, you will find it easier to keep things under control.
How to use a Cash Book, and how will you use to enter your transactions?
Cashbook is a simple accounting book used to enter daily transactions for your payments and receipts; the amount will be called debt and revenue referred to as a credit. Unfortunately, the cashbook will not show the cash transactions; that will have to record separately.
Two possible ways of updating the cashbook, one is to write the daily transactions as you go along and reconcile with the bank statement when you receive. Moreover, another method is you can write up the cashbook when you receive the bank statement. but the prior way will have more control over your accounting system
Cloud bookkeeping has created a significant step-change in efficiency for the accounting industry. At its core, cloud bookkeeping automates manual tasks, so there is more time to spend on essential things in a business. You can work from anywhere if you have a laptop and the internet connection because you can upload the bank statements instead of entering manually. Therefore, making errors will be less, and you do not need to maintain spreadsheets.
1. Support More Clients in Less Time
Cloud bookkeeping and automation go hand-in-hand. Automation is taking manual tasks and having software do them for us. The desktop accounting packages do not do this, but the cloud enables automation well, which we are not aware until now. Cloud bookkeeping makes it possible for advisors to support more clients in less time through automation. They can also focus on higher-paying work.
2. Real-time Financial Reporting
The ability to manage cash flow efficiently is the holy grail of financial success for many business owners.
Entrepreneurs often do not have real-time insight into their business’ finances. They have to get heavily involved in day-to-day operations. If they do not have the proper financial information, the company can fail.
They no longer have to wait for the latest version of their QuickBooks file before checking their income and expenses. Business owners can now see where their money is going and where it’s coming from, 24 hours a day, seven days a week.
3. Easy for accountants to work with business owners.
With the cloud, business owners and their advisors have the information they need, when they need it. It makes collaboration easy, whether on the go, at home or in the office.
Today, advisors living in a pre-cloud world are spending up to 35 percent of their time chasing down documents and answers from clients.
Documents are secure in the cloud and accessible from anywhere. It means accountants and bookkeepers have the materials they need when they need them. It also gives them greater control over their time.
4. Value for money
You do not need to pay a significant sum to buy accounting software, can spread the cost by paying monthly. If you do prefer to pay upfront, you will benefit from a discount.
5.Software updated regularly
One of the magical parts of cloud software is the ease with which providers can push updates. It is different from desktop software where the version you buy is the version you are staying. Besides, where upgrades only occur when you purchase an updated version. Cloud software updates happen on the fly and without extra cost to the user.
Many cloud software companies ask their customers for feedback. They use that feedback to contribute to their product roadmap. It means customers see the results when the software updated.
6. Backup is easy
When most of us think of backing up our data, we often delay it because something “more important” came up. Manually backing up data is a pain.
Thanks to the cloud and the deep integration between bookkeeping software and their add-ons, backup is automatic. In the best of cases, it happens as part of your workflow.
Doing manual work is the time that could better spend on higher-value activities. Software is here to help. Cloud bookkeeping in the cloud is a great way to automate and save time. Whether you are a bookkeeper, accountant, or small business owner.
The firmness with receivables.
Most companies sell goods on credit to improve sales and to get more customers as well. Then the company owner becomes happy thinking that the company is doing well but forgetting the fact the deals are only on credit. Remember, the company needs cash to top up the inventory, pay staff s, and other expense related to the business. Therefore there is a possibility that business could face the cash flow problem.
Therefore, the best ways to avoid that is to monitor cash flow regularly and be firm about receivables. Many small business owners become friendly with the customers and do not have control over the payments. Even though you want to be useful to your clients but consider that you run a business if you do not have the firmness, you will fall into debt. Therefore, introduce the credit-control system and make sure you follow it up carefully so your customer will not miss the payments within the deadline.
Pay yourself first
Most entrepreneurs ignore the fact that they should pay to avoid financial struggle in their personal life. Moreover, it might lead to using their credit card also for your business. You need to have separate rules to pay yourself regularly at a necessary amount of money. The second vital issue is to make sure you put aside some money monthly for emergency and retirement fund.
Tax Laws Are Your Friend
Most entrepreneurs get upset when you talk to them about tax payments without realizing g that they can claim their actual business expense. In other words, tax laws are teaching you how to monitor your hard-earned profits. Unbelievably, tax laws at the state and federal levels designed to help small businesses succeed during the difficult initial years. Educate yourself on what can write off in your state, and keep track of all your expenses. You already know that legitimate business expenses—including rent, payroll, and equipment—are deductible. Also, remember that you can reduce your tax burden by writing off business losses.
Know What You Can and Can't Do Yourself
If you are a busy entrepreneur, keeping the books should not be a full-time job. Be realistic about how much you can do on your own without dividing your responsibilities. Do not be afraid to turn to a professional for help. Bringing on a bookkeeper in a freelance or part-time capacity can ensure you continue handling your money as effectively as possible.
Whether you choose to hire outside help or not, there are cloud-based solutions that can make managing your essential files seamless and straightforward. Document management software like eFileCabinet can be an incredibly useful ally for any business owner. Whom feels stretched a little too thin when it comes to taking care of the paperwork.
When your business grows, your needs change. Your financial processes are some of the essential functions of your organization. You may think it's safer to maintain the status quo, but when it comes to accounting, your company can benefit from considering new opportunities. See why you may want to take advantage of a different strategy to enhance your business
Your Employees Have Too Much on Their Plate
If your employees have been multitasking to stay on top of bookkeeping jobs, outsourcing can eliminate their distractions and let them get back to their duties. Besides, the combination of outsourcing and using an online accounting service provides access to all the documents. Your employees still need to perform their functions while also ensuring that GAAPs are satisfied. Everyone stays focused on what they do best.
You Need an Accounting Staff Rather Than an Accountant
When your accounting needs to expand past what one person can handle, you may want to consider supplementing your accounting strategy by using an online bookkeeping service. Online accounting services also give your company access to specialized accounting knowledge that you might otherwise find difficult to obtain.
Remember if you have employed a chartered accountant to do your financial statements and tax computations would have cost you more. Then hiring an in-house bookkeeper is cheaper for you. Small business does not need a bookkeeper. Can outsource your work to the accounting firm while your bookkeeper can do most of the necessary work in-house and send it to the outsourcing company.
Employ the right professional for each task you have to not only improve functional efficiencies but also improve cost efficiencies.
Your Accounting Software Is Outdated
Keeping your accounting software up to date can be daunting. Technology is changing at an exponential rate. Moreover, if your software is not able to keep up on-site and with mobile applications, you will not have the capabilities you need. Going with an online accounting solution gives you the latest changes as they roll out. Cloud accounting helps in real-time finance reporting.
Current accounting technology includes solutions for general ledger, expense reporting, time tracking, managing bank accounts, suppliers and customers accounts and inventory, and bill payment.
Expanding payroll due to hiring more staff get the support by your software for a certain number of employees per payroll period. Nevertheless, once your firm exceeds 50, many accounting packages will not support the new numbers. Regardless of whether the bookkeeper is ready to update the software or not, the sooner it’s done, the better, as manually processing payroll checks is clunky at best.
You don’t trust them
Finding an accountant who is trustworthy and reliable is essential. A good small business accountant offers excellent customer service and is easily contactable should you have a query. They should be willing to work with you so that you understand the financial reports they create. Then the accuracy of accounting that shows in your business is vital for you. You must trust your accountant to be able to delegate tasks to them quickly. Delegation is an essential skill for a business owner, as it allows you to get on with other things knowing your financial house is in order. Accounting is the vital part of the business; therefore; your accountant should show reliability and flexibility when dealing with you and your employees.
Trusting your small business accountant is also crucial when it comes to dealing with the government and tax office. Your accountant will be lodging forms and ensuring that you are compliant with all rules and regulations, which is why they need to pay attention to detail.
You Need Room to Grow
Whether your company is already outgrowing your staff or the market is ripe for growth, you may find that you need scalability in your accounting software. Both outsourcing and taking advantage of online accounting services can provide your business with additional features and expertise. Which scaled to meet your needs now and expand as your organization does.
Enforce internal control
As your company grows, you encounter financial scenarios that you may not have foreseen. Interstate commerce, local and state tax application, foreign exchange rates and international regulations all require the expertise of a qualified accounting professional to keep records updated and in accordance with applicable regulations and generally accepted accounting principles (GAAP).
What is internal control?
Internal control is vital in business to protect the company from mistakes and frauds. A business will not be able to survive in the end or grow if internal control not enforced every business needs internal control, as any company is business targeted for theft. Suppliers intentionally ship fewer goods than in the order; shoplifters are there to take your stock away with them when they walk from the shop. Unfortunately, some owners do not realize all this until it happens. They also do not understand that these can stop by introducing proper accounting systems. These internal controls specially designed to minimize errors in bookkeeping that stop the fraud by the employees.
Examples of internal control
· The business requires a second signature for cash withdrawals from the bank.
· Checking and matching the supplier’s invoices with the order and the goods received before making the payment.
· Writing off the bad debts the manager should approve and a high-level authority.
· Stock control – An employee or an auditor doing surprise counts of the stock in the company warehouse and match with inventory records.
· Require mandatory leave for the person doing the books that include the bookkeepers and accountants. Another person with accounting knowledge allowed doing the same work Therefore that work helps in finding the irregularities in the company policy.
Many small businesses believe that they are secure because trusted people run their business. Nevertheless, it is no harm in enforcing internal controls in the event of fraud. Doing the daily balancing and checking to avoid the practice of dishonesty.
Complete with period end procedures.
If all the transactions entered correctly, you are ready for the preparation of the financial statements. However, you have to do some more work to get prepared. For example, your equipment in your business needs to depreciate and the values included in the final accounts. Further calculations for accruals, prepayments also get involved in the reports. Thereby lots of last accounting work has to do to arrive at the accuracy of the accounts for the period that required for the company.
Using outsourced accounting services is one strategy your business can use to address your growing financial needs with the expertise you require without the stress of building a brand new team from scratch. There is no need for a full hiring process, providing office space or finding even more storage space; outsourcing allows you to take control of complex accounting situations and save time and money in the process.