How You Do Business IS EVERYTHING? PART 2
Is all that money in your account profit or is some of that money liability? Are you meeting your financial goals? Is your marketing working? How well did you do last month? This month? Was it better this month verses last month? What is your slow season for your business? When is the best season to market your business? When is the worse? Has your bank account been reconciled monthly? You heard someone tell you that you can write off business dinners and lunches but, is that really helpful for your business? Are you overspending in areas? Will you have a tax loss at the end of the year or will you owe? Is the structure of your business conducive for your tax situation, your personal situation? Are you taking a salary? Why or why not? Are you making personal purchases from the business account?
HOW, one conducts business IS EVERYTHING! No one goes into business to save tax dollars, that’s an added benefit. However it is a benefit that you will not see if you do not conduct business appropriately!
Bookkeeping provides an accurate account of your financial steps for a business. It must be done on a consistent basis (monthly). Too often entrepreneurs underestimate the importance of bookkeeping as well as the timing of it. Bookkeeping isn’t an accessory to be done when the entrepreneur has time for it; neither is it something to be completed when the entrepreneur gets into trouble and needs immediate answers. It must be done each month and is better served with a consulting meeting which helps the entrepreneur gain perspective and understanding of both his or her business and as well as, the benefits of the reports provided by the bookkeeper/bookkeeping services.
Additionally, as it relates to validity the way the information and from what source the information is collected matters. Receipts can come from anywhere at any time. You can pick a receipt up from the ground and say it’s an expense. To ensure quality reporting all transactions should be from one bank account, the bank account from the business! Banks are Federal Institutions and verifiable which makes your reporting verifiable as well. With the ability for it to be verified, all you have are a bunch of numbers on paper trying to make yourself look good! In other words, reports of fake news and false financial records. What if you wanted or need to prove your company’s worth, those numbers without bank statements to back them mean nothing! Believe me, I’ve seen it before, the entrepreneur may even make good money but the records do not show it and the bank statements do not reflect and therefore it did not happen. The other scenario that a lender or investor will note is that if the entrepreneur makes good money but it isn’t reflected in the bank statements that sends a red flag that 1) the entrepreneur isn’t doing well with money management and 2) he or she has yet to seek the help of a professional to assist with money management. Neither of those is good.
Running a successful business goes beyond a few dollars in the bank account there are so many items, so many things to manage and ignoring just one of those things can leave an entrepreneur wishing he or she never attempted to follow his or her dream.
This isn’t bad news, nor is it a time to reconsider going after your dream. This information is to assist you in understanding that 1) even if you own the business, you cannot or should not consider doing the business all by yourself! 2) Smart entrepreneurs become business owners by employing the service of others not excluding it! Last but not least, 3) using the services of other small businesses is one of the best networking an entrepreneur can do.
The owner of Elite Expert Business Solutions watched these scenarios play out in different companies and with many entrepreneurs and it was the reason she began her bookkeeping business. She is skillful in teaching, explaining the things needed and delicate in assisting the entrepreneur to reach his or her goals. Initial consultations are always free.
CALL TODAY AND CHANGE HOW YOU DO BUSINESS! #DoBusinessBetter
214-930-5986
