Top 5 Financial Management Tips for Small Businesses

Money, money and more money- the backbone of every industry and business; and that is precisely why effective financial management is so important. Big or small, financial management decisions have to be taken with the utmost care. It is also vital that you manage your finances properly from the very beginning, especially if you are a small business with limited resources. Here are a few financial management tips that will help you keep things together.

  1. Invest in Cloud Computing Solutions– Do not ignore technology. All the latest software and computing solutions are developed with the sole purpose of making the business owner’s life easier. Bookkeeping for small business is better when you invest in the latest cloud computing solutions. Numerous business owners have found that such solutions save them money and time and they feel a lot less stressful.

bookkeeping for small business

  1. Prepare a Realistic Budget– A budget is a great financial management tool. It can tell you what to expect, where your money can come from and where you can lose money. So put conscious effort and thought into preparing your yearly budget. You will always know where you stand financially.
  1. Maintain Separate Business and Personal Accounts– One of the first things you need to do when you start your business is to create a separate business account. While it might seem unnecessary at this point, you will find that a single account will make bookkeeping for small business complicated. Maintaining separate accounts will keep you in control at all times.

financial management tips for small business

  1. Hire Personnel That You Need– Hiring staff will increase your costs, but you cannot run your business by yourself. Hire the staff that you need so that you can run your business effectively and your customers get the best service. It is also prudent to never expand your staff too fast; you may end up with more staff than your business can handle.
  1. Be Ready For Changes– Flexibility and preparedness are good qualities in a small business owner. Anticipate changes and when the changes comes, be ready to face them and flexible to adapting yourself and your business to it. No business can survive unless it is ready to face and handle changes.

Do You Need a Freelance Bookkeeper or Bookkeeping Firm?

Any business decision pertaining to bookkeeping and accounting is a major one. Do you do your own bookkeeping? Should you invest in an accounting software? Should you outsource your bookkeeping? These decisions play an important part in determining the success and growth of your company. Let us say you decide to outsource your bookkeeping, then the next big question is do you hire a freelance bookkeeper or a bookkeeping firm. Who do you work with?

Freelance Bookkeeper or Bookkeeping firm?

The truth is that this decision depends on your business- how it functions and what your needs are. One size doesn’t fit all. Let us explore how the two setups are different and decide whether you need a freelance bookkeeper or bookkeeping firm.

  1. Cost– Money is an important factor in making this small business bookkeeping decision. Freelance bookkeepers offer lower rates than a firm. This is simply because they generally work from home and hence have lower overhead costs. A firm, on the other hand, charges higher due to higher overheads and also as they provide you a variety of services with access to more personnel. On hiring a firm, you have access to much more than just basic bookkeeping services.

small business bookkeeping

  1. Work Arrangement- Freelancers are free to travel and willing to work from your office if needed, except that it might cost you more since you will have to arrange for office space. Some freelancers also offer virtual bookkeeping services. Similarly most firms also work remotely with their clients, making things a lot easier for all involved.
  1. Work Schedules– Most freelancers work for multiple companies, so they schedule their work accordingly, ensuring that the books for each client is accurate and up-to-date and that deadlines are met. Unfortunately, this dependency on a single bookkeeper can mean that when your bookkeeper is on leave or sick, you have no one to turn to. Also come tax deadlines, your freelancer is going to be really busy. However when working with a bookkeeping firm, even if your bookkeeper is not available, there will always be a backup bookkeeper. Another huge advantage of working with a firm is that due to the large number of bookkeepers available, you will be able to find someone who has worked in your field or at least something similar. The chances of you finding a bookkeeper who understands your needs is also a lot higher with a firm.

freelance bookkeeper or bookkeeping firm

  1. Knowledge and Expertise– Everything is in vain if your bookkeeper doesn’t have adequate bookkeeping knowledge and expertise. The thing with freelancers is that there is no one to regulate them. Everything depends on your bookkeeper’s knowledge and expertise- he could be a beginner or have 10 years of experience. Whereas in a firm, you will have access to people with a range of expertise and knowledge. Always ask around and research on the firm or bookkeeper before taking the final call.

So what will it be? Think about what your small business bookkeeping needs. Think about what each has to offer and decide- freelance bookkeeper or bookkeeping firm?

Ensuring the Security of Your Outsourced Financial Records

Outsourcing bookkeeping and accounting is the norm for present day business owners. It is convenient, fewer chances of mistakes and time saving; but for all its benefits, how safe is it to give online bookkeeping services access to all your financial records?  With rampant data theft and scams, who can you trust and is anything ever safe?

We understand your fears and worries; unfortunately, aside from handling your accounts and books yourself, there is no way you can ever completely be at peace. That is why online bookkeeping services have stringent security measures in place to ensure that your data never falls into the right hands. Here are some tips on how you can ensure that you choose the right accounting or bookkeeping firm.

  1. Do Your Research– Never rely on what the firm or representatives of the firm tell you. Always thoroughly research the firm, their background, dig up reviews, talk to people who have worked with them before and take an informed decision. Take as long as you need; this decision is not to be taken lightly.

Online bookkeeping services

  1. Prepare a Legal Document or Contract– Make sure that you draw up a legal document or contract before you begin working with the service provider. Get professional legal help if you have to. Address your security requirements and concerns in the document so that both parties are on the same page.
  1. Encryption Techniques– To ensure your data is kept safe when transmitting over networks, use encryption techniques.

Online Bookkeeping Services

  1. Extra Security Measures– Insist that your service provider takes extra steps to ensure security like restricted access to data, screening of visitors, limiting personnel access to data transfer points etc.

You can also ask your online bookkeeping services provider, the following questions to make sure you know what you are getting into.

  1. Physical security measures in place at the place of business
  2. Details of encryption methods used on the site and at portals
  3. What happens to files when the work is done
  4. Network security
  5. Company policies on data breach or data theft

Data security issues are here to stay; as long as every industry is computer and internet dependent, there will be those who try to gain unlawful access. So be wise and choose your service providers carefully.

4 Business Functions You Should Consider Automating

Running a company is no simple feat. There are so many things you have to attend to- you have to check your inventory, make sure you have enough supplies, pay your rent, pay your employees, take care of your customers, market your product or service- the list of tasks is endless. So is it any wonder you work yourself to the bone everyday and still find that you haven’t completed all your tasks for the day?

Online Bookkeeping Services

Well things don’t have to always stay that way. You can automate a couple of your regular business functions. Interested? Here are 4 business functions to automate to make managing your business a lot easier.

  1. Payroll- Payroll processing is not easy- you have to pay your employees the right amount on the right date, fill in the payroll forms with the IRS, calculate the correct tax amount and pay them on time. Not only is it time consuming, the scope for errors is also high and payroll errors are expensive, because you may end up having to pay fines or penalties. The solution- online payroll services. Eliminate the errors and save time.
  1. Bookkeeping- Another tedious and time consuming task with lots of scope for making errors that you absolutely cannot afford. Save yourself the trouble. Get a good accounting software or try online bookkeeping services. It will be worthwhile.

Business functions to automate

  1. Marketing- Whether you like it or not, you cannot afford to ignore marketing. Every business needs a sound marketing plan that will drive traffic to your site and increase sales. Fortunately there are a number of marketing automation software that you can use if you would like to handle it personally, or else you can always avail of the services of a marketing company.
  1. Customer Relationship Management (CRM) – What good will it do your business you don’t have a healthy relationship with customers? But again, it can eat into your time, which is why getting an efficient CRM software is a good option. CRM software will allow you to interact with prospective and existing customers, track sales leads, appointments, contacts and conversions, while at the same time allowing you to manage your business better.

Automation and business outsourcing are becoming increasingly popular. Make the best of the opportunities available to you.

5 Affordable Employee Perks for Small Business Owners

Small business owners often have a tough time retaining employees. While some employees are satisfied with working with a company that treats them like family and allows them to grow, others want better salaries and more perks. Small business owners often trouble offering competitive salaries while they are waiting for their business to lift off and deliver profits. So what is the next best thing that they can offer? Affordable, yet effective perks that can make employees happy.

Studies have proven that happy and satisfied employees are more effective and productive than unsatisfied ones. So here are 5 effective employee perks for small business owners to improve employee morale and performance.

  1. Organize Free Team Lunches Once a Month– Who doesn’t love free food? Organize a lunch once a month for your employees. Such occasions gives all of you, employees and employers, a chance to interact with each other, get to know each other better, relax together and builds team spirit; something that is very important for the success of a company, as much as small business bookkeeping.

Small Business Bookkeeping

  1. Get Your Employees Smartphones– This perk is not as expensive as you fear; there are numerous service providers with special plans for small businesses on the purchase of a smartphone contract. Good small business bookkeeping can help you find a way to make this happen. Offering smartphones to your employees not only makes them happy, but also gives you a means to contact them when needed. You can also install apps that are relevant to their roles so that they can work on the go if needed.
  1. Provide Employees with an Option to Work from Home– When you let your employees work from home, you tell them that you trust them. Plus it is probably the cheapest perk you can offer. Working from home means no commuting, no rushing through chores in the morning, thereby giving you less stressed and happier employees. You can offer good employees an option to work from home 1-2 days a week and also allow them to choose the days. What do you have to lose? Instead you gain your employees’ respect and more productive, efficient employees.

Employee Perks for Small Business Owners

  1. Flexible Days Off and Vacation Time– Be flexible with your employees’ days off and their vacation time. Don’t be stingy with their personal days. Doing otherwise is a sure shot way to lose employees by the dozen.
  1. Offer Full Health Insurance Benefits– As an employer, this is the best thing you can do for your employees and will earn you their loyalty. I know that most small business owners feel that this is an expensive perk, but there are a number of reasonably priced plans available on small business networks.

5 Ways Online Bookkeeping Companies Can Help You Grow Your Business

No business owner is prepared for the amount of time and effort that bookkeeping will take. As much as you may wish you didn’t have to do it, you have to take care of your books for the sustained growth and development of your company. If you run a business and would like nothing better than to find a cheaper yet efficient bookkeeping option, you should consider online bookkeeping.

Online bookkeeping or virtual bookkeeping refers to bookkeeping services provided from a remote location; so your online or virtual bookkeeper will work on your books from a remote location over the internet. Pretty neat, huh? Now why would you want to outsource bookkeeping to an online company? Simple; because doing so can help you grow your business. How? Read on.

  1. Save Money and Resources– Which business owner doesn’t love being given a reason to save money and resources? Since online bookkeepers work remotely, you save up on rent, office space, plus, it is cheaper. You can now use this money and resources to serve other needs in your company.

Online Bookkeeping

  1. Save Time– Since you no longer have to spend so much time on your bookkeeping, you are free to use the time to attend to other business matters that require your expertise.
  1. Impeccable Business Records– Since you now have a certified bookkeeper working for you, you can be sure that your books are up-to-date and accurate no matter what the time of the year. No more running around when tax time arrives.

Outsource Bookkeeping

  1. Framework to Scale– Before you get ready to scale your business, you need to make sure that all aspects of your business are equipped to handle the growth. Outsourcing your bookkeeping to online bookkeeping companies means that you no longer have to worry about whether your bookkeeping can handle the growth; your bookkeeper will take care of it.
  1. Lesser Mistakes– A certified bookkeeper is less likely than an untrained business owner to make mistakes. Besides an online bookkeeping company would always have a team of trained professionals to cross check the books, leaving you in a better position to take informed business decisions.

Bookkeeping need not be the burden that it is for you right now. Find a good online bookkeeping company to outsource your bookkeeping to, so that you can focus on growing your business.

What to Look For When Hiring a Bookkeeper

Bookkeeping is an important part of any business; hence it goes without saying that your bookkeeper is also vital for the smooth and efficient running of your business. Unfortunately most small business owners feel that bookkeeping is out of their league and so don’t know what to look for in their bookkeepers. While the basic criterion is that they are well versed in the principles of bookkeeping for small business, there is a lot more that you should look out for. So let us take a look at what else you should expect in a bookkeeper.

  1. Good Communication Skills– Good communication skills are important for success in any field. How can you work with your bookkeeper if he/she doesn’t understand you or has trouble talking to you? A good bookkeeper is a valuable asset and can provide information useful for the growth and development of your business.

hiring a bookkeeper

  1. Basic Understanding of Your Industry– A bookkeeper with experience working in your industry will find it easier to navigate and get things done for you. While the essentials of bookkeeping for small business are the same for all, there will certain terms specific to the industry which the bookkeeper can understand only from experience.
  1. Knows How to Use Computers– Every sphere of life today is governed by computers and the internet, same goes with bookkeeping for small business. So, the smart and efficient bookkeeper of today should know how to use computers and accounting software like QuickBooks and Xero so that you can stay on top of your finances and reap the benefits of using these tools.

Bookkeeping for Small Business

  1. Attention to Detail– One of the reasons why bookkeeping is such a headache for small business owners is because there are so many small details that require your attention. Ideally a good bookkeeper will be able to pay attention to all the tiny details and give you accurate and up-to-date books.
  1. Have Financial Statements Ready on Time– As a business owner, financial statements and reports are extremely important to you and it is imperative that they are correct. Hence your bookkeeper should be able to provide you with the accurate reports and statements, namely the balance sheet, the profit/loss statement and the cash flow statement on time.

Hiring a bookkeeper is not a task to be taken lightly. Take your time and ensure that your bookkeeper has these qualities and any other qualities that you feel are important based on your prior experience with bookkeepers. If you can think of any other important qualities, leave us a comment.

5 Reasons Why You Should Consider Outsourcing Your Bookkeeping

The advent of computers and the internet has changed the way the whole world works. From business to education, everything is online and the online community is growing steadily with each passing day. There is no field not touched by the internet and computers, including bookkeeping and accounting. Gone are the days of ledgers and journals; today if you want to stay on top of things and keep out trouble with the IRS, you need a reliable accounting software and adequate knowledge of bookkeeping.

outsourcing your bookkeeping

Unfortunately, business owners, especially small business owners, don’t have the time and luxury to become expert bookkeepers and maintain their books accurately. They cannot afford to move their attention away from their business because that is all it takes for your business to lose its footing, which is why you should consider outsourcing your bookkeeping. Not convinced? Here are few reasons why.

  1. Saves Time– You will no longer have to spend time pouring over your books; instead you can use the time to attend to business related tasks that require your attention. You are now free to focus on growing your business.
  1. Save Money– You save money because you won’t have to retain a full time or part time bookkeeper on your payroll; you will only have to pay for the bookkeeping services. You will also benefit in the long run due to better financial reporting and advice.

why outsource your bookkeeping

  1. You Get To Do What You Love– No business owner likes doing the bookkeeping, but it is necessary. Outsourcing your bookkeeping means that you no longer have to spend time on it and can instead do what you love- working on and for your business.
  1. Access to Bookkeeping and Accounting Experts– Outsourcing will give you access to accounting and bookkeeping experts, people who know the tax codes and tax laws, so you know you can rely on them. All this will make your life a lot easier.
  1. Easy to Scale– All business owners want to grow and expand their business; outsourcing your bookkeeping can make this easier. Firstly by providing with data, reports and suggestions to increase profits, and secondly by providing you with bookkeeping service that is capable of accommodating the scaling of your business.

Ideally outsourcing can provide you with tons of options and flexibility that will allow you to grow and sustain the growth. Think about it.

Understanding Bookkeeping for Non- Profits

Non- profit and for- profit organizations are quite different from each other in their principles and method of functioning, however there is one thing that they share- both see money flow in and out of the organization. Money flow= Accounting and Bookkeeping; if there is money involved, you need to keep track of the money- where did the money come from, where is it going, do you have enough to cover your expenses, so on and so forth. Non-profits are built with the sole purpose of serving society and fulfilling a need, but what good can the organization do if you have to shut down or cannot meet the needs due to lack of resources?

bookkeeping for non profit

While bookkeeping for all organizations is technically the same, there are certain aspects of bookkeeping for non profit that are different.

  • Instead of the income statement that for- profit businesses issue, non- profits are required to provide a Statement of Activities.
  • Since non- profits do not technically have owners, there is no owner’s or stockholder’s equity and no distribution to owners.
  • Non- profit organizations can apply to the IRS to be exempted from taxes.

Non- profit organizations have numerous sources of income- pledges, donations, membership dues, fees for special events, investments, grants etc. For accurate and up-to-date bookkeeping, it is important that you record and account for all of these.

Non Profit Concept

Whether you decide to do your bookkeeping yourself or hire a bookkeeper, what is important is that the bookkeeping is accurate and up-to-date. If you decide to get yourself an accounting software, there are few things that you need to keep in mind.

  • Some accounting software are developed solely with conventional businesses in mind, so find one that meets your non- profits needs.
  • Find a good accounting software that provides in depth reports with income and expense graphs, accounts receivable ratios and other useful statistics that you can access easily.
  • You should be able to access your account and data anytime from anywhere.
  • Keep in mind that your organization will grow so your software should allow you to add more users as and when needed.
  • The software should be efficient and capable of handling simple manual tasks by itself.

Bookkeeping for non profit may seem tiresome and time consuming, but it is important for the sustained growth and development of your organization.

Why Virtual Bookkeeping?

Bookkeeping.. Ahh.. The bane of most small business owners lives, but no matter how you feel about it, you can’t do without it. So what are your options? You can either do it yourself or hire a bookkeeper. Most business owners feel that hiring a bookkeeper is an unnecessary expense, especially when you are just setting your business up, so they go the DIY route. Unfortunately, those who do learn the hard way that it’s tough and can take up more time than they can afford, so what next. Enter virtual bookkeeping.

online bookkeeping

What is Virtual Bookkeeping?

Virtual bookkeeping is simply bookkeeping services provided remotely, i.e your books will be maintained by a certified bookkeeper working from a remote location. Skeptical? This is actually a lot more convenient than hiring your own bookkeeper. There are three ways this online bookkeeping method works. The bookkeeper can:

  1. Access your system remotely and take care things like you would.
  2. Work over a cloud based bookkeeping software with your login details.
  3. Work on the same software you use and access it online using a hosted virtual desktop.

virtual bookkeeping

Why Virtual Bookkeeping?

Now why would anyone in their right minds avail of online bookkeeping services; here is why.

  • You save money because you don’t have to arrange for office space, equipment or supplies for them. If they are contractors, you will not have to worry about insurance, benefits and employment taxes either.
  • The online bookkeeping arrangement offers you a lot of flexibility and the bookkeepers can work as much or as less as your business requires.
  • Business owners who work out of their homes will also appreciate the fact that this means they will not have to worry about someone invading their home space on a regular basis.

So think again. Virtual bookkeeping is convenient for clients and bookkeepers and both groups can benefit a lot from the arrangement. So go over your options and find out what bookkeeping arrangement will work best for you; it is always good to remember that one size doesn’t fit all.