At the launch of any start-up company, owners are faced with one pervasive thought: expense. Money flows out in a thousand different directions and revenue is a mere star on the horizon. These initial expenditures come at the same time you as an owner are attempting to map out future, recurring expenses. And in this frenzy it’s easy to forget a few.
To ensure you don’t find yourself a month into operations faced with surprise bills or lacking an essential resource, review this list of commonly forgotten expenses and account for them in your budget: (more…)
We all sympathize with employees facing performance reviews. No one likes to be evaluated, especially by their boss, and the entire ordeal can be quite nerve-racking. What we forget, however, is that the same feeling of dread employees experience at this time is also (at least in part) felt by their bosses.
You should be a bit more animated when conducting performance reviews.
Addressing an employee’s shortcomings is awkward, and doing so while maintaining good will is a huge challenge. Nonetheless, performance reviews are necessary. They help determine compensation, hold employees accountable, and, when done correctly, increase worker productivity. (more…)
Accounting software has lifted weight off the shoulders of CEOs worldwide. Gone are the days of writing out every transaction and calculating by hand all necessary figures. We now entrust these duties to our software systems.
And while this saves time, it also puts business owners at a distance from their finances. Because continual oversight is not required, errors may arise and go long undetected (at a severe cost to your company).
Keep your money from falling through the cracks by taking a more hands on role in these four areas of your business:
Invoicing: Most businesses deal regularly with two types of invoices: customer and purchase. Chances are your dealings with each are limited to either sending (customer) or receiving (purchase).
Unfortunately, with regard to customer invoices, simply sending word may not be enough to ensure payment. Clients may be pressed for cash or simply forgetful, and neglect to pay you on time (if at all). Contact these customers and inquire about their delayed payment. Remind them of your terms and the consequences for not abiding by them.
When you receive purchase invoices, don’t automatically file them away. Double check the charges and make sure you’ve actually received all products you purchased. An accidental 0 added by your supplier may result in $1,000 cost to you.
Balancing accounts: Just as you (hopefully) do your personal bank account, reconcile your business accounts. Though you can trust your software system to make correct calculations, you can’t account for human error. Perhaps you initially entered a $500 purchase as $5,000. Your software won’t catch this, but you can—and save yourself a lot of undue worry by doing so.
Cash: Cash is the one thing you can’t rely on software to monitor (good luck jamming $50s into your screen). Retailers, restaurants, and all businesses that deal directly and routinely with cash need to pay close attention to it.
When handling cash it’s simple to slip up. Bills fall through fingers, stick together, and get lost among clutter. So slow down when making transactions and talk to your employees about the importance of doing the same.
Today’s registers aren’t this daunting, but mistakes can still be made.
Hold staff accountable to being attentive to cash by balancing tills after every shift. Require that two people sign off on the balance sheet to decrease the odds of negligence or theft. Another easy way to enforce compliance is to place a camera over the till.
Sales: Before you actually begin to sell anything, you need to determine how you will account for sales. Sales revenue does not equate with income. You may find yourself with extra cash on-hand after cutting staff or selling the company van. These are not sales transactions.
Determine what it is you’re selling (be it legal services, written content, or pizza) and track sales only in terms of this measure.
If you earn on commission, your sales revenue will only be a percentage of the total sale and you’ll need to account for that.
Though becoming more engaged in these areas of your business will demand some time, a lot of the energy you put in will be up-front. Once you’ve established these procedures, your work will mainly be limited to monitoring their effectiveness.
For tips on how to avoid other common accounting mistakes, refer to this list from Tweak Your Biz. You’ll be surprised by the circumstances at which cash falls through the cracks.
If you don’t have the time to monitor your accounts yourself, consider hiring an outsourced accountant. Our start-up accounting and CFO services experts can assist you in not only establishing, but monitoring these procedures.
When launching a business, an entrepreneur faces countless decisions: “How will I raise funds? Where can I find talent? Do I need to outsource?” But before addressing any of these concerns, he or she must make one important choice: whether to enter business as a sole proprietor or form a partnership.
If you’re looking to put in place a small business plan, this decision will affect all other choices you’ll make. So you need to make it as soon as possible. Unfortunately, the choice is not cookie-cutter clear. There is no best option; only one best suited to you. By understanding the advantages and disadvantages of partnerships, you can determine if this is the path for you.
Why form a partnership? (more…)
Get your cash to flow as quickly as this, and your business is set for success.
When it comes to your company’s cash flow, you may feel you’re at the mercy of your clients. You feel that on your end you’ve done everything possible to keep business booming— you’ve cemented deals, set your terms, and worked tirelessly to produce results. Now all that’s left to do is sit back and await payment; right?
Wrong. Unfortunately honest work is not always enough to keep your business up and running. You may face a decrease in demand, clients may default on payments, and a project you had thought would take a week to complete may drag on for months. Each of these scenarios leaves you with a cash shortage.
Thankfully, there are ways to work within these circumstances to speed things up. These 6 strategies will help you quicken your cash flow without spending a dime:
1. Shorten payment terms (more…)