Small Business Tips: How to Manage Your Money

The ultimate goal of running a business is to not only offer quality products and services, but also maximize profits at the same time. Even if you understand your ideal customer and have a great marketing strategy in place, your business will fail if you don’t know how to manage your money. Money management will make or break your company, which is why you need to be intentional about the way you are structuring your finances.

Freedom Through Money Management

Too often, people feel like money management is another to-do item that needs to be added to a never-ending list of responsibilities. How can you keep up with the books when you are worried about business development, employee reviews, customer service, and more?

The truth is that a good money management system actually frees up your time, allowing you to focus on other tasks within the company. When you are using the right software, paired with an experienced outsourced accounting team, you don’t have to focus your effort on busy work and tax calculations.

Learning how to manage your money gives you the freedom to run your business in the best way possible. You always have a clear picture of your accounts, including both income and liabilities. This information optimizes the business decisions you make each day, which has a domino effect on improving your long-term results.

Money Management Doesn’t Have to be Overwhelming

If you don’t know much about finances or money management, then you likely feel overwhelmed at the idea of implementing a new system. This process doesn’t need to be complicated. Instead of trying to reinvent the wheel, you should lean on the advice offered by an experienced accounting team.

Your accountant can do the heavy-lifting to design and implement a new financial system for money management. Then, you simply need to learn the right way to use this system to support your financial goals.

Be Proactive in the Way You Manage Your Money

The key is to take a proactive approach in the way you choose to manage your money. Instead of always stressing over immediate bills and trying to “put out fires” in your bank account, you need to be thinking ahead and anticipating the upcoming costs.

For example, sometimes business owners make the mistake of spending money that is available in the bank account, when that cash should have been set aside for an upcoming tax bill. Even though the money is in the account right now, it doesn’t mean that it can be used for extra expenses or a new project. It is important that you consider your cash flow and have a specific system in place, so the money is saved and ready to go when the payments come up in the future.

Being proactive means that you aren’t making decisions based on a quick, limited snapshot of your current bank account. Instead, you are evaluating financial trends, looking at the way the cash usually flows through your account, and preparing for unexpected things that might come up in the future.

How to Improve Your Money Management Strategies

Here are a few simple steps you can follow to improve the systems you are using to manage your money. While these tips are geared for business money management, don’t overlook the benefits you can enjoy by also applying these tips in your personal finances as well.

  • Debt Evaluation: It is difficult to keep a business going without good debt, but the debt burden can become too heavy and eventually take down the company. How much debt are you carrying right now? What are your debt ratios? If the credit cards and lines of credit are creeping up, then it means that you are spending more than you are bringing in. Look for ways that you can cut costs, so you have more cash to pay down the credit lines as quickly as possible. Not only are these accounts demanding cash flow each month, but the balances are going up due to interest costs and fees.
  • Cut Unnecessary Costs: Take a real, honest look at how you are spending your money to find ways that you can reduce unnecessary line items. Don’t underestimate the power of trimming your expenses. Even the smallest monthly costs can add up over time, resulting in hundreds or thousands of dollars spent over the course of a year. Sometimes you can reduce unnecessary costs, such as switching service providers or eliminating monthly subscriptions that aren’t being used. Go through your expenses line-by-line and consider the value each expense is bringing to your company. Then cut anything that isn’t contributing to your business goals so that you can reduce your spending.
  • Create a Rainy-Day Fund: It is normal for all businesses to have busy and slow seasons. When sales are up and the cash is flowing, it is the perfect time to ensure that you are ready for the rainy days that are sure to come in the future. Creating an emergency fund means that you will be prepared if something goes wrong with a product shipment or you are facing repair work on your building. Having a 6-month emergency fund will give you peace of mind to know that you are prepared for whatever might happen in the future.
  • Separate Business and Personal Expenses: It’s easy to let the personal spending get mixed in with business expenses. Unfortunately, things get complicated if you don’t have a clear line drawn with your accounts. Make sure you have separate accounts and credit cards. Be deliberate in the way expenses are paid so that your bank statements are accurate in reflecting the money spent on the business. If you have disorganized records, then it means that you could be missing tax deductions and potential business growth opportunities in the future.
  • Purchases and Inventory Timing: When big expenses are coming up, such as inventory restocking, consider the way you can time the purchases to ensure there is enough money in the bank. For example, if you can avoid restocking inventory in the same month that a tax payment is due, then it helps to balance out your cash flow for the month. Don’t tie your cash up in too much inventory that just sits on the shelf and collects dust throughout the year.
  • Set Financial Goals: These goals need to be realistic and achievable. How much do you think you can bring in this year? What are your anticipated costs? Design a budget based on these financial goals. Remember to be conservative in your estimates so you have room for mistakes and issues that might pop up. Not only do you need to work through the numbers, but you also need to be sure that you have action steps to follow that will support future growth.
  • Don’t Miss Payments: Even when cash flow is tight, it is important to make sure that you are keeping up with all payments. Your budget and emergency fund will help by ensuring that you have money available when the bills are due. Be strategic and determined never to miss a payment! It might seem like a small thing to be late on a payment, but you need to consider the consequences that can occur if you aren’t diligent about payments that are owed. For example, missing vendor payments means that they might not be willing to work with you in the future, which could potentially hurt your ability to provide the products your customers desire. Additionally, on-time payments help you avoid costs due to late fees and interest expenses.
  • Ongoing Financial Strategy: After reviewing your current financial situation, the next step is to ensure that you have a plan in place so you are prepared for the future. This ongoing financial strategy should include details such as the use of a good accounting software, services from an experienced accountant, and daily/weekly/monthly tasks, so you don’t fall behind on your financial tracking and reporting. The easiest way to ensure that you are consistent you’re your financial strategy is by enlisting the services of an outsourced accounting team that offers full services throughout the year.

It’s never too early to get started on your new financial strategy. If you are struggling with money management, then the first step is to talk to an accounting team for assistance. Don’t be embarrassed about the current state of your business finances. Instead, be willing to ask for help so that you can improve your results and ensure that you are prepared for the future.

Talk to the Small Business Accounting Pros

Easier Accounting is leading the industry with personalized tax services for small business owners. We understand the challenges you are facing with cash flow, profit margins, and other financial aspects of running a company. You don’t need to carry the responsibility without support from an experienced, knowledgeable team. For more information about the quality outsourced accounting services that are offered, you are welcome to call us at any time: (888) 620-0770.

Taking Control of Small Business Finances: Payroll, Invoicing, Bookkeeping, and More

Have you strapped into the seat for the roller coaster ride of running a small business? As a business owner, there are many ups and downs that will be faced along the way. It can be a challenge to keep up with everything that is going on. Not only do you need to manage your workforce, but you also need to oversee the paperwork and finances that happen behind the scenes to keep the company running. If you don’t already have the systems in place, then right now is the time to take control of small business finances.

Why You Need to Be in Control

Why does it matter if you are keeping up with the boring paperwork and reports? It is exciting to work on product development and creative marketing campaigns. But, these activities aren’t possible if you don’t have the cash flow to support the daily business activities.

Taking control of your business finances is essential if you want to set your company up for success in the future. As you manage the cashflow, invoicing, and other systems that affect your business activities, you will be in a position to make the decisions that will have a positive impact on your company in the future. A few small actions right now will go a long way to ensure that you are positioned for growth in the future.

Too often, financial details fall to the back burner because business owners are focused on other development activities. For example, it is easy to neglect the bookkeeping tasks if you are busy preparing for an upcoming sale in your store. The immediate needs take priority, and then you are left to clean up the financial details later on.

Procrastinating on these financial reports and management can result in situations where you are facing financial problems that could have been avoided. For example, if you are current with your expense tracking and profit analysis, then you can anticipate potential tax bills in the future. As a result, you will have time to set the money aside so that you aren’t caught in a difficult situation where you are unable to pay the bills when they are due.

Managing Money for Your Small Business

Every business has the money management concerns. Cash is king in your business practices. Without financial management, you could find yourself stuck in a debt hole where you can’t recover. It is essential to design a financial structure that will help you maximize profit margins and stay ahead of the cash flow that is needed to keep your company running every month.

These systems need to be in place for every financial aspect of business management:

  • Payroll: Ensure that payroll processing is accurate and timely, helping to maintain employee satisfaction. Not only do you need accuracy with the payment calculations, but you also need to stay current with tax withholdings, benefits calculations, and more. Additionally, you need to be sure that enough money is in the bank so that the checks clear.
  • Invoicing: There are two sides of invoicing that need to be addressed. First, you need to make sure that you have the cash flow to pay the invoices that are due for products and services that are used to keep your company running. Second, you need to stay current with sending invoices to your customers when balances are due.
  • Bookkeeping: Do you have a system in place to track every transaction that moves through your company? Not only do these transactions need to be recorded, but it is also important to categorize the spending and pay attention to the cash flow.
  • Financial Reports: You don’t need to look at financial reports on a daily basis. But, this information can be helpful several times during the year, especially when you are making big decisions that impact the future of your company. Have a system in place so that it is easy to run financial reports that might be needed, such as profit before taxes or a Profit & Loss report.

These are just a few of the financial details that need to be handled on a regular basis. Many business owners don’t have the experience or time to handle these tasks. Instead of stretching yourself thin with the busy work, it is better to lean on the experience offered by an outsourced accounting team.

Financial Management Tips for Your Small Business

Resources are available to make it easy to set up the right financial management system for your small business. Keep in mind that you don’t need to start from scratch when setting up these systems. Instead, it is more effective to tap into the services that are offered by an experienced financial team. When the accounting team has worked on other similar projects, then insight can be offered to help you avoid some of the common pitfalls that are encountered along the way.

Here are a few financial management tips that every small business owner needs to keep in mind:

  1. Learn about Your Options: Educating yourself is one of the first things that you need to do so that you have the right information to support the decisions. Evaluate services that are offered, financial information that needs to be tracked, and where you should turn for the help that is needed. Also, you need to be educated about the current financial health of your company. If you don’t know where you are starting, then it can be hard to determine the changes that need to be made for the future. When the finances are a mess, then it might be tempting to look the other way. But, this information is important so that you can get a feel for the severity of the situation, and then decisions can be made to change the trajectory of the company.
  2. Business and Personal Finances Should Be Separated: It is easy for the finances to get mixed up when you are running a startup or home-based business. Even though the business is in your name, you need to be careful to keep the finances separated so that there isn’t a mix up when it is time to track spending or look at transactions. Get a business credit card and checking account so that all of the expenses are in a different account than your personal The separation takes a little work in the beginning, but it is essential so that you can stay in control of the way the money moves through your accounts.
  3. Manage Large and Small Expenses: You might have a false sense of security if the profits are rolling in. But, don’t assume that a big bank account means that you have money to spend. If you aren’t managing your expenses, then the incoming money will quickly be eaten up by nickel-and-dime costs that are required to keep the company running. Watch out for the cash-suckers, such as monthly subscriptions, inventory purchases, or a slush fund that is hard to keep track of. You need to be consistent about tracking every penny that is spent. At the same time, determine whether the expenses are essential so that you can find areas where you can cut back the spending.
  4. Use Good Accounting Software: A cloud-based accounting software is the best solution in our modern business world. This system makes it easy to track your inflow and outflow. At the same time, your accounting team will be able to access the information even when they are located far away. Additionally, there are many conveniences to having the accounting reports at your fingertips from any place in the world. If you don’t already have a good accounting system in place, then this step should be at the top of your priority list. Our team at Easier Accounting can assist with the implementation of a system that will work for your business needs.
  5. Measure Performance and Progress: Ongoing measurement will help you see the progress that is being made with the money that is coming in and the being spent. It is important that you evaluate progress on a regular basis to determine the trends. For example, you might see that this year is trending with a stronger profit margin compared to last year. As a result, this information can be used if you are looking at options to reinvest the profits in business development or extra marketing campaigns.

You don’t have the time or expertise to manage the business finances without support. So, it makes sense to invest your money in a good accounting service. Outsourcing these tasks will free up your time and improve the systems that are being used in your company. At the same time, you can rest assured to know that you are tapping into the expertise offered by an experienced team that you can trust.

If you are looking for ways to take control of small business finances, then Easier Accounting is here to assist. We invite you to call our company so that you can learn more about the services that are available: (888) 620-0770

Summer Accounting Tips for Small Business Owners

Summer is here, and many people are looking forward to a few months of fun with their kids. As a small business owner, it is easy to let some of the business management tasks slide because you are distracted with activities outside of work.

Even though it is common for some industries to experience a decrease in business during the summer months, it doesn’t mean that you can get lazy with your bookkeeping or other activities. On the other hand, some small businesses cater to summer activities, which means that things get busy during this time of year. Either way, you need to consider the unique needs of your company and the things that you can do to ensure long-term success.

Here are a few things that you can consider to help you have a successful summer:

Planning Summer Vacations

It can be a trick if you are understaffed because all of your employees take a vacation at the same time. Consider putting together a summer schedule in advance to work around the anticipated vacation schedules of your employees.

This schedule will allow your staff to be on the same page so that you can have all of the tasks and activities covered throughout the summer months. If someone is going to be out of town, then you can plan ahead by cross-training other employees to handle the details during the break.

Having a time-off policy and request format will simplify your ability to plan a schedule that will keep the business running. Also, you can plan ahead if you are leaving for vacation so that the staff is prepared to handle the day-to-day management in your absence.

Seasonal Staffing

For businesses that have an increase in sales during the summer months, it might make sense to hire seasonal employees. An increase in business for a few months doesn’t often merit hiring a bunch of full-time employees. Instead, consider working with a temporary hiring agency or looking for options to bring on freelance contractors for a time.

Just make sure that you are working with your accountant to coordinate payments. A contractor will be paid in a different way than a full-time employee. Taxes and withholdings are handled uniquely, and your accounting team can ensure that you are doing the right thing.

An accountant can also help you distinguish between the tasks of an employee and contractor. Some business owners want to hire contractors so that they can avoid paying benefits and other overhead costs. But, if the workflow and requirements match the legal guidelines for an employee, then you need to make sure that you are complying with the right payment methods. An experienced accountant can help you compare the options so that you can bring in the best talent and maximize your spending at the same time.

Online Accounting Management

If you are planning to take some time off with your family, consider the benefits of implementing an online accounting system before you leave. These programs make it easy for you to stay up-to-date with the numbers so that you can see what is going on while you are away. Don’t get stuck in the old paper filing methods now that we live in a digital world!

Implementing an online system is one of the best things that you can do to streamline your business finances. It is easy to run reports and get a feel for the profitability of the year. Your accountant can make recommendations about the software program that match the needs of your company.

Another thing to consider is the benefit of hiring an accounting team if you don’t already have these services in place. Hiring an accounting means that you can take off with the family for a fun vacation, without worrying about the financial details back in the office.

Summer Promotions

Are things slowing down during the summer months, but you want to keep the income flowing? Then right now might be a great time to run a promotion or new marketing campaign. Just because things often slow down during this time of year, doesn’t mean that your business needs to take a hit. The right marketing campaign can bring more people through the door, helping to boost the bottom line.

Look for ways that you can add some summer fun to your promotions. For example, you might have a BBQ in the parking lot or pass out popsicles on the day of a big sale. These things might seem small, but they can offer a great way to generate goodwill with current and potential customers.

Maintaining Productivity during the Summer Months

One of the biggest concerns that small businesses have during this time of year is the decline in productivity among employees. When people are away from the office and the workload goes down, it is tempting to spend more time around the water cooler. As a result, your business will suffer even if you are fully staffed.

Consider steps that can be implemented to boost employee morale and encourage productivity. The summer season could be a good time of year to implement a fun competition or contest that offers extra rewards for performance.

Also, look for ways that you can help employees recharge during their breaks so that they are refreshed and ready to get back to work. A comfortable break room or outdoor area can be a nice way to provide a positive work environment.

Catching Up on Bookkeeping

Do you get caught in the trap of ignoring your bookkeeping until it is time to file tax paperwork? Too often, small business owners get stressed because they are trying to crunch the numbers during a busy time of the year.

If you have extra time available during the summer months, then it can be a great opportunity to get caught up on the busy work that has been neglected. Sort through the paperwork, finish up data entry, and talk to your accountant to see if there is anything else that needs to be addressed. When things are slower, it is the perfect time to implement a new program if you want to make changes.

Keep Up with Payments and Paperwork

Just because you are taking time off for vacation, doesn’t mean that you can neglect important tax payments and paperwork. For example, June 15th is coming up, which means that many people need to drop a check in the mail for their 2nd estimated tax payment in 2017. Missing this deadline could result in late fees and interest costs, increasing the amount that you need to pay in the future. Your accountant can help you determine if you are required to make these estimated payments throughout the year.

It is also essential to stay up-to-date with payroll and withholdings. You might be away from the office, but your employees will still need to be paid! Hiring a payroll service will give you the ability to go out of town without leaving your staff without a paycheck. These services offer a great way to stay ahead of ongoing withholdings and payments that need to be made throughout the year.

Track Expenses

Whenever you have an expense that can be used as a deduction on your taxes, make sure that you are keeping the receipts and documentation. Uncommon expenses might pop up during the summer, such as a company BBQ or other perks that you offer to employees or customers. These costs can be considered in your tax preparation, but you can’t claim the deductions if you don’t have documentation for the transactions.

So, it can be a good idea to gather the receipts and file them for the future. A good filing system will ensure that you can find the documentation if it is needed for any reason.

Hiring a Professional Accounting Team

There is no doubt that an experienced accountant can help you maximize your profits and improve future results for your company. Small business owners often follow a do-it-yourself approach to these tasks. So, stress levels can go up if you are trying to manage everything on your own. There is no reason that you need to carry the burden without the support of an experienced team, and right now might be the perfect opportunity to explore your options.

Bringing in an accountant can help you analyze your profit and loss reports so that you can look for ways to boost your cash flow. At the same time, consider the areas where you can cut unneeded expenses that are running up your overhead costs.

Are you interested in learning more about how professional accounting services can be beneficial for your company this summer? Then right now is a great time to talk to our team here at Easier Accounting. We specialize in small business accounting services, and we are here to help! Contact us to see how we can assist with your business finances. We are happy to cater the information to match the needs of your company. Call to schedule a consultation: (888) 620-0770

3 Biggest Mistakes Business Owners Make with their Accounting

The quality of your accounting system will have a direct impact on every aspect of your business: current cash flow, future growth, and long-term business success. If you are a business owner or entrepreneur, then it is essential to make sure that you have a quality accounting system in place.

Even if you have an accounting system, it doesn’t necessarily mean that all of the essential tasks are done. These are some of the common mistakes that we see in small businesses:

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Mixing Business and Personal Expenses

Even though you have a home based business, it is essential to keep the finances separate between your personal life and business spending. Blurring the lines between business expenses and personal needs can lead to confusion when tax time rolls around.

Make it a point to set up a business bank account and credit card, and don’t let the lines blur between your business and personal spending. Whenever a business expense comes through, it is important to document the transaction so that you can use it as a tax write-off. Keep a file of receipts and share the transaction details with your accountant.

Missing Tax Deadlines

It is easy to overlook a tax deadline or paperwork that needs to be submitted. Many business owners have too much going on, increasing the likelihood that they forget to send a payment or fill out necessary tax paperwork. These deadlines are important! If you miss the deadlines, then you are at risk of fines from the IRS.

On the other hand, meeting the deadlines will keep your business blended in with the group. Do the best that you can to stick to the deadlines so that you can avoid putting your company in a situation where you are being audited by the IRS.

Hiring an Inexperienced Accountant

If you are going to spend money on accounting services, then make sure that you hire someone who has experience in the industry. A new graduate right out of college won’t be able to offer the experiences available from a team of seasoned accountants. You need to tap into that experience to increase the future success of your company. So, find someone who knows the best practices in your industry.

Here at Easier Accounting, we know what it takes to help your business experience financial success. If you need a professional team to help with accounting and bookkeeping, then we invite you to contact us for more information about the services that are offered: (888) 620-0770