Small Business Tips from Bookkeeper

In this turbid economy, small businesses worried about security. There is nothing worse than watching a small business that been around in the community for years just suddenly disappear. Small businesses make up a whopping 99.7 percent of all nation employer businesses according to U.S. Small Business Administration. The average small business owners focus a lot on getting the customers, marketing and not enough on accounting and financial side of the business. Many small business owners I have worked with creating accounting systems were not organized. Most business owners did not thinking the accounting and financial aspect of the business was as valuable as marketing the business. Accounting, business, and finances are the heart, soul and body of any business and just like a human body it needs nutrients in order to survive and love to grow.

Business Tip #1 Organize all your invoices, bills, receipts and account receivables neatly where you can access them easily. I can recall countless times when small-business owners could not produce all the paperwork. Nothing is more frustrating and time consuming, when you do not know who owe you money, who to pay. Organizing your paper work can not only save you time but money, this will keep you from double paying bills, keep you from being audited by Uncle Sam, ensure you will be able to collect all your money from customers.

Business Tip #2 Reducing the need to borrow money. Small-business owners can reduce the amount of money they are borrowing by planning for bill due dates. Many business owners I encountered usually are borrowing money because of unexpected expenses, usually these unexpected expenses are expenses they forgot about when planning their budget. Consider planning your budget with all your expenses in mind including the unexpected expenses. Small-business owners can stop unnecessary money borrowing by cutting back on wasteful spending. My advice would be to sit down with your business partners and make a list of all the company expenses. Once you and your partners have compiled a list of expenses divide into two list necessary expense and unnecessary. Before putting items on either list ask the following questions: Is this a necessary expense? If it this a necessary expense, how can I do this for less cost without losing quality? This little outline would give you a blueprint to where to start cutting cost.

Business Tip #3 Know when you have excess cash. Knowing when you have excess cash is essential as well as knowing how to put it to work. I have encounter many small-business owners just pocketing excessive cash from surplus doing a certain period. Excessive cash flow needs to be reinvested into the business; it takes money to make money. Putting your extra money to work will not only benefit and grow your business, but you can use this money for unexpected expenses.

Business Tip #4 Never Spend Beyond Your Budget. This rule should apply in everyone's personal life. Spending beyond your budget can cause a company to bankrupt or choke the life out the business before it has a chance to grow. Spending well within your means will ensure business ability to absorb the cost in case of failure without hurting the business. First rule of finance and business is to plan financial for unexpected scenarios.

Business Tip#5 Incorporate Your Business. No matter how small your business is incorporating your business is the best thing. Incorporating your business not only protects your personal assets but can attract interested investors. Corporate structures have more access to investment capital; you do not have to file taxes for the business under your personal taxes. An Accountant perspective, corporate structures are just like people they have their own credit rating it can sue, file taxes and own assets.

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SBA News Release SBA.GOV