If you are an owner of a small business, you already know how much time it takes to run the day to day work of running your business. An important aspect of keeping your business functioning properly is taking care of the financials. You need to know exactly where you are with your cash flow, your profit margins, what your fixed cost are, and what your variable expense are comprised of.
Are You Buried In Receipts?
If you are like most business owners, you would rather not have to bother with the accounting part of your business. You are gifted in the service or product you sell and want just to do the job that you are in business to do. That is where your real interest is, not in keeping the books.
You may be keeping your financial information in a shoe box or some folder where you throw everything in during the year and hope your CPA or accounted can figure things out for you in time to file your taxes each year. The reality is that you can take control of this important and necessary aspect of your business and be empowered to increase your profitability by knowing a few simple processes in setting this system up yourself and then keeping track each month of your incomes and expenses. You can get this system up and work for you relatively quickly.
The first step in creating your financial system is ORGANIZING your income and expenses. You will need to find all expense receipts, whether they are filed in a folder or stuffed in a shoe box. It is much easier now days to organise your expenses if you use a credit card or chequebook to pay for your expenditures. But, sometimes you do have to pay cash for certain items. When you do pay cash, you will need to keep your receipt, mark on it what it was for, and make sure there is a date on the receipt.
So, the first tip in getting your company’s accounting system set up is organising your expenses into categories, and then into months of the current year. This may take a few days, depending on where you have put your receipts. Just start today, and we will cover step two next!