Receivable management is possibly one of the most important, yet often ignored, non- core task of any business. The reason is that collecting receivables can take up a lot of time and effort, which you probably don’t have any to spare. Whatever the reason, not paying adequate attention to the receivables part of your business is detrimental to the health of your business. You need good receivable management to keep your profits, collect timely payments and to increase your cash inflow. If you find that you don’t have the time to devote to this part of your business, it would be a good idea to outsource receivables management. Here is how a good receivable management system can help you.
- Organize Accounts Receivable– For any business to be successful, it is important that at any point of time, you know which invoices are nearing their due date and which payments are overdue. An organized system allows you to be on top of all these details. It also means that you promptly send out invoices and proactively remind clients of due dates. This also increases the likelihood of you receiving timely payments. You are also in a better position to evaluate client relationships and to avoid vendors and clients who regularly default on payments.
- Send Detailed History of Communication– If you do end up with clients or vendors who default on payments, it will be good news to know that it has been found that presenting them with a detailed history of payment communication is more likely to get them to pay up. When you have your business to run, putting together these details can be difficult, which is why things can be easier if you outsource receivables management.
- Maintain a Steady Cash Flow– Maintaining a steady cash flow is important for numerous reasons. It will not only help you get a better handle on your business, it will also come in handy if you are looking to expand your business. Potential investors will want to know if you have a steady cash flow, so you need to ensure your receivable management is in check. If you think all that is too much for you, you could consider outsource receivables management; it can do you a world of good.
Receivable management is crucial for a business to flourish, so if you want your business to thrive, it’s about time you get your AR in order. If you don’t have the time or resources to handle your accounts receivable, outsource receivables management.
Running your own business is a stressful job; in fact “stress” soon becomes your middle name. Sadly after a few years of stress and a couple of run-ins with other business owners, all equally if not more, stressed out, you decide that the stress is a part of the business package, so there is really nothing you can do about it. While stress in small doses is good for you, long term stress turns on the fight- or- flight mode frequently and for long duration, which can cause a lot of damage to your mental, emotional and physical health.
The long term effects of stress are lowered immunity, high blood pressure, cardiovascular problems, emotional instability, irritability and loss of appetite. The future doesn’t seem to be pretty from here does it? But you can change all that; you can turn your life around and reduce your stress.
- Exercise and Proper Diet– Exercise is a great stress buster. It not only enables you to handle stress, it also equips you to bounce back from the ill effects; so get in a bit of exercise every day. You may think that you don’t have the energy to exercise, but you will find yourself energised after a good 20 minutes of exercise. Lay off the junk food; start eating healthy with proper meal timings. A healthy body is often the first step to a healthy mind.
- Laugh More– “Laughter is the best medicine”, we have all heard that often enough, but never really believed it. Well, laughter is one of the best medicines for stress; in fact studies have found that just the anticipation of laughter greatly reduces stress hormones in our body. So stop looking so grim and laugh more, smile more.
- Share Responsibilities– You don’t have to carry the weight of the world. Find someone to share your responsibilities, allowing you to focus on core business tasks and growing your business.
- Outsource Non- Core Business Tasks– Outsourcing has been found to alleviate the stress of business owners greatly. You will no longer have to worry about non- core business functions like bookkeeping and payroll; you can rely on online bookkeeping services and financial outsourcing companies to take care of things for you. All that means lesser stress for you.
Stress is a part of life, but it doesn’t have to take over your life and stop you from enjoying it. So do whatever it takes today to get a handle on your stress levels- watch a comedy film with your family, go out for a run or hire online bookkeeping services; it is after all your life and you get only one chance to live it.
We have often stressed how important communication skills are in a bookkeeper, however it is important to note that communication is a two way process, so it won’t help your bookkeeping for small business if you cannot communicate with your bookkeeper. Business owners often complain about how their bookkeepers don’t give them the report they asked for or provide them with incomplete information. While it is possible that your bookkeeper is at fault, it is also equally possible that you are at fault; maybe you didn’t clearly state what you need, maybe you assumed that your bookkeeper knows what you are talking about. The only way to establish this for sure is to make some changes to how you communicate with bookkeeper. Here are some easy changes you can make.
- Set aside time to review and request bookkeeping for small business information– Most business owners are in the habit on making requests while on the run, which means they end up not explaining things to the bookkeeper. While they know the context, the bookkeepers most often don’t, and provide information based on what they understood. The best way to fix this is to purposefully set aside time to interact with your bookkeeper, whether over the phone or in person. Just make sure you concentrate solely on your bookkeeper and that the both of you are on the same page before closing.
- Insist on emails and notes for communication– It is good practise to conduct all your requests and communications via emails. Emails require you to think before you write and it also serves as a means of documentation. Make sure you make notes for every meeting and pass them around later, so that changes can be made by those involved if needed. This can save everyone a lot of time, trouble and prevent miscommunication.
- Provide feedback– Bookkeepers can also benefit from constructive criticism and detailed feedback. Make it a point to provide your client with regular feedback, so that he knows where he stands. Besides it will allow you to engage with your bookkeeper and develop a healthy relationship.
Bookkeeping for small business has its ups and downs, and there is nothing that you and your bookkeeper cannot solve together. So make a few changes and watch things change.
Your CPA is an important part of your business. Whether you hire a full time or part time small business accountant, or outsource your accounting, you need someone who can understand your business and what it needs. It is also vital that you can trust your accountant, after all your accounts are in his hands. Most small business owners however are not really sure what they should look for in their CPA. Here are some tips that can help you.
- Your accountant needs much more than the right qualifications.
Having the right qualifications is not all that counts when it comes to your accountant. Aside from all the necessary degrees, , you need an accountant who has a thorough understanding of your business, and is capable of working with your employees and communicating with them. It is also crucial that your small business accountant is someone you can trust and depend on, especially in times of trouble.
- Figure out what specific accounting needs you have before hiring.
Quite often, business owners begin the recruitment process without any idea of what they are looking for, which often results in hiring the wrong person or firm. If you are able to identify the accounting areas you need help in, you are in a better position to weed out the wrong candidates. It also provides the CPA or CPA firm with a better understanding of what is expected of them and ensures that everyone is on the right page.
- You need a CPA or CPA firm you can communicate with.
Never underestimate the importance of communication when it comes to your CPA. You need someone you can talk to, someone who is willing to take you through each step and explain things when needed. Your small business accountant has his finger on the pulse of your business, so if you need to know where your business is headed, you need to be able to communicate with him.
- Find an accounting service provider who also provides financial analysis.
A good CPA or CPA firm should be able to provide you with financial analysis reports. These reports are essential for making informed business decisions. There are a few firms that don’t provide financial analysis services, it is better to avoid them. Make it clear to your small business accountant during the hiring process that you want financial analysis done as well.
Taxes are scary; this is true irrespective of whether you are a small, mid- size, or large business. It is complicated and time consuming, which is why most business owners prefer to use the services of tax professionals or software. Smart move, however small business bookkeeping gurus say that as a business owner, it is always in your best interests to have a basic understanding of taxes. One reason to learn more about your taxes is that you can figure out ways to save money spent on taxes, legitimate ways of course.
- Home Office Deductions– Most small business owners run their businesses out of their homes, but they hesitate to claim home office deductions. Why? Simply because they are not sure if they will be able to pass an audit. It is quite easy actually; here is what you can do to prove that you have a legit home office.
- Maintain up- to- date and well kept records. Invest in a small business bookkeeping company if you need help with your books.
- Maintain separate office space, that isn’t in any way used as personal or family space.
- If you have only one computer at home, auditors might not believe that it is solely meant for work. You can either maintain separate computers or not have a computer in your work area.
- Technology Deductions– Science and technology is changing the world. Every day there is something out there that demands your attention, that promises to make your work quicker and more efficient, including small business bookkeeping. Science and technology is changing the way businesses work, fortunately the government also understands this, which is why under Section 179 of the tax code, expenses for equipment like computers, business software etc are tax- deductible up to a certain amount. The amount varies every year, so make sure you check Section 179 come tax time.
- Travel Deductions– A growing business often requires travelling for conferences, investment meetings; all directly linked to the development of your business. So while your travel costs for business trips are tax- deductible to a certain extent, you need to remember the following-
- Food is only deductible up to 50%.
- While you can take your family, only your costs can be calculated for tax deduction.
- Only conferences that are directly useful to your business or industry will be considered for tax deduction.
Never forget the golden rules of small business bookkeeping- maintain up- to- date records and store away all your receipts and invoices. Taxes and audits are unpleasant, but are essential and in your best interests. So fill your taxes on time, maintain well organized records and you will have nothing to worry about.
Do you have an Accounts Receivable management problem? If you are not sure of the answer, chances are that you are having one or will most likely have one soon. Better safe than sorry; so here are some questions to ask yourself to clear things up.
- How is your day sales outstanding faring?
If you have longstanding day sales outstanding, you are headed for trouble. Outstanding dues are never a good thing and the longer you go without collecting them, the greater the risk of losing the payment altogether. It also means you are never able to plan for your business’ future. Numerous businesses have had to shut down due to poor AR management, so be wise. Invest in good receivable management services and save your business.
- Do you know who owes you how much?
If you don’t have records of payments due to you and don’t send out invoices on time, you are heading for trouble. Always stay on top of your Accounts Receivable. If you have customers who are habitual defaulters, you should take a call about them immediately; frequent payment defaulting does not signal a healthy business arrangement.
- Do you have proper records of contracts, agreements, invoices and other payment related documents?
When it comes to something as crucial as payments due, you cannot take any chances. Maintain all your records well because you never know when you are going to need it; this also includes the follow up emails you send your customers. Communication is key in business.
- Do you regularly use the services of a collection agency?
If you have to send invoices to collection agencies, well, you do seem to be having an AR problem. Receivable management services can make things easier for you, by helping you set up an efficient AR management system.
- Are all your invoices for payments over 90 days overdue?
The answer to this question speaks for itself; you definitely have an AR management problem.
AR management is a crucial part of any business; it can determine whether your business rises or falls. If you think your business is facing an AR crisis, you should turn things around immediately or else, you could invest in receivable management services. They will clean up your records and set up a reliable AR management system for you.
The business sector is fast paced, yet ever changing and challenging, which is why business people are always looking for ways to make managing their business easier, more efficient and quick. In case you haven’t been able to keep yourself apprised of the latest changes and trends, well, this one is for you.
- Types of Employees– The hiring sector is undergoing a change- employers seem to favour part time and 1099 contractors to full time employees. There are numerous differences between the various types of employees. Understand each type and their differences, decide which one would best suit your needs and hire accordingly.
- Invest in Cloud based Payroll and Accounting Software– The advantages of using a cloud based payroll and accounting software are many. From how to calculate payroll taxes to where your business stands financially, there is a lot that these systems can do for you. It also allows you to link your different systems and build a coherent work and employee management system.
- Open System with Access for Employees– One of the benefits of using a cloud based payroll and accounting software is that it allows you to provide employees with access to view their payroll details. So now your employees will be able to keep track of the hours worked and other details, thereby facilitating transparency and reducing the number of payroll queries.
- Automatic Payroll Calculation– You can also allow your employees to enter their hours themselves and the software can calculate the pay for you. All you have to do is review the data and approve it. That really could save you a lot of time; no more “how to calculate payroll taxes”, “how to calculate pay”. Things are a lot easier.
Running your own business, while being a rewarding experience, can also be a strenuous and tiring one. As a business owner, small, mid- size or large, it is always in your best interests to find out how you can make managing your business easier.
Most people are bitten by the “start my own business” bug at some point of time. Running your own business will be great- you get to be your own boss, do things your way; the whole idea is awesome, that is till reality comes knocking on the door. You don’t just start a business with a snap of your fingers; you need a business idea, business plan, investment; you will have to start from scratch. For some people, however, all that doesn’t matter; they just want to be running their own business. And that is part of the reason for the growing popularity of franchises. Let us explore the other reasons behind the growing number of franchises.
- Support with Start-Up Costs– All entrepreneurs break out into a cold sweat at the thought of the dreaded start-up costs, even if they have good bookkeeping online or in-house. Owners worry about meeting costs before the business is seeing any revenue, especially since you never know what emergencies can crop up or unforeseen incidents occur. The good thing with franchise business is that since the business is already running, your franchisor has data on start-up costs and expenses that help you a great deal.
- Safer– Running a franchise is definitely safer than starting one of your own, simply because you know what you are getting into and franchisors already have a well thought- out, working business plan. All this also makes things a lot easier for you.
- Franchisor’s Support– Franchisors, of course, want their franchises to succeed, so it goes without saying that they will do their best to help you succeed, which is, after all, what you as a business owner need. You can be trained on all the important aspects of your business- inventory management, bookkeeping online and in-house etc. and learn how to build a thriving franchise outlet. You will not be alone; you won’t have to figure your way through alone. You will also have access to reliable teams to work with or to outsource non core functions to like bookkeeping online.
- Selecting a Location-The location of a business plays a big role in its success; another area franchisors can help in. It is more likely than not that they already have a list of potential locations, so they can help you find a store and set up as well.
Franchises are in now; if you want to start your own business but don’t know how to go about it, the franchise business may be just the thing for you.
The financial records of any company is private and contains privileged information, which is why most often than not, the ones with access to the data and the company money are members of the inner circle, deemed to be trustworthy by the business owner. Unfortunately, it is also these trusted individuals who end up embezzling from the business; in the end, the truth is you cannot trust anyone but yourself in business. So what can you do to prevent being embezzled or from being a victim of bookkeeping fraud?
- Don’t Designate One Money Guy– Most small and mid- size businesses have one person through whom all the money flows and no one questions him. Unfortunately, this person is the one most likely to embezzle, simply because he can with all the money he has access to. Most business owners don’t cross check the records submitted and even if they do, chances are less that they will never find anything because the money guy covered his tracks carefully. So it is wise to designate at least two employees to manage money. You can also consider virtual bookkeeping services to make your life easier and prevent bookkeeping fraud.
- Get Rid of Cash Payments– Cash payments are a common method of bookkeeping fraud. Excess cash is withdrawn and the remainder is never paid back; this goes unnoticed for long periods of time. Fortunately you no longer have to depend on cash payments; major businesses have automatic clearing house payments and accept online payments.
- Review Reports Regularly– Reports have to be reviewed regularly so that you can detect any false entries and prevent bookkeeping fraud. Make sure you have controls in place so that nothing goes undetected. Putting controls in place and following through them can take up a lot of your time and resources, but if you want to keep your business safe, you have to take the necessary precautions. If all that seems too much, you can always invest in virtual bookkeeping services which will keep your books up-to-date and accurate, while also saving you time and energy.
It is common for business owners to lag behind on their bookkeeping and accounting; some even blatantly ignore it. It is not that they don’t know how important the function is to their business, no,no; they are very much aware of it, however despite all the knowledge it just happens. Unfortunately, whether you like it or not, ignoring this business function can be detrimental to your business’ health. Here are some common deceivingly simple mistakes than business owners make that can put the business at risk.
- Not Seeking Help– Knowing when to ask for help is valuable in real life as well. No one can do everything on their own; at some point you are going to have to trust someone. The more growth your business sees, the more things will get out of hand because you will not be able to spend the amount of time and attention you used to earlier. So you have to identify someone reliable and enrol their help.
- Ignoring Receivables– This is a huge mistake; your receivables are what keeps your business going, so you have to always be on top of it. Agreed that some clients are difficult to get hold off, but putting things off will only cause you more problems. It is a good idea to outsource receivables management so that you need not worry about this aspect and can leave it to the professionals.
- Not Hiring in Good Bookkeeping Services– Unfortunately for something that focuses on saving businesses money, bookkeeping requires a lot of money just to be set up, and that is why numerous business owners try to cut corners by hiring cheaper bookkeeping companies or outsource receivables management to more affordable options. The thing is there is no guarantee that your bookkeepers are good and you will end up losing much more than you saved. So, do the wise thing- find a quality bookkeeper to do your bookkeeping.
- Sticking to Old School Practices– You have to admit it, science and technology have made our lives infinitely easier; everything is quicker and more efficient. So not utilizing the latest tools and software like accounting software, customer relationship management tools and inventory management tools can reduce your productivity and profits and leave you in the dust in the business race.