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One might be resulted in believe that profit is the main objective in a small business but in reality it’s the funds flowing in and out of a business which will keep the doors open. The idea of profit is relatively narrow and only talks about expenses and income at a particular point in time. Cash flow, however, is more powerful in the sense that it is worried about the movement of profit and out of a small business. It is concerned with the time of which the movement of the amount of money takes place. Profits usually do not necessarily coincide with their associated income inflows and outflows. The net result is that funds receipts often lag cash repayments and while profits may be reported, the business enterprise may experience a short-term cash shortage. For this reason, it is essential to forecast cash flows as well as project likely income. In these terms, you should know how to convert your accrual profit to your money flow profit. You need to be in a position to maintain enough cash on hand to run the business, but not so much as to forfeit possible earnings from some other uses.

Why accounting is needed

Help you to operate better as a business owner

Make timely decisions
Know when to hire a team of employees
Discover how to price your products
Know how to label your expense items
Allows you to determine whether to grow or not
Helps with operations projected costs
Stop Fraud and Theft
Control the largest problem is internal theft
Reconcile your books and stock control of equipment
Raising Capital (allow you to explain financials to stakeholders)
Loans
Investors
What are the GUIDELINES in Accounting for Small Businesses to handle your common ‘pain points’?
Hire or consult with CPA or accountant
What is the simplest way and how often to contact
What experience do you have in my industry?
Identify what is my break-even point?
Can the accountant measure the overall value of my business
Can you help me grow my organization with profit planning techniques
How will you help me to get ready for tax season
What are some special considerations for my particular industry?

To succeed, your company must be profitable. All your business objectives boil down to this one inescapable fact. But turning a profit is simpler said than done. As a way to boost your bottom line, you need to know what’s going on financially constantly. You also need to be committed to tracking and comprehending your KPIs.
Do you know the common Profitability Metrics to Monitor in Business — key performance indicators (KPI)

Whether you decide to hire an expert or do-it-yourself, there are some metrics that you ought to absolutely need to keep track of at all times:

Outstanding Accounts Payable: Remarkable accounts payable (A/P) shows the total amount of cash you now owe to your suppliers.
Average Cash Burn: Average money burn is the rate at which your business’ cash balance is certainly going down on average every month over a specified time frame. A negative burn is an excellent sign because it indicates your business is generating money and growing its money reserves.
Cash Runaway: If your business is operating baffled, cash runway helps you estimate how many months you can continue before your organization exhausts its cash reserves. Much like your cash burn, a negative runway is an effective sign that your business keeps growing its cash reserves.
Gross Margin: Gross margin is a percentage that demonstrates the total revenue of one’s business after subtracting the costs associated with creating and selling your organization’ products. This can be a helpful metric to recognize how your revenue compares to your costs, allowing you to make changes accordingly.
Customer Acquisition Cost: By knowing how much you spend on average to get a new customer, you can tell how many customers it is advisable to generate a profit.
Customer Lifetime Value: You need to know your LTV to enable you to predict your own future revenues and estimate the total number of customers you need to grow your profits.
Break-Even Point:How much do I have to generate in revenue for my company to create a profit?Knowing this number will show you what you need to do to turn a revenue (e.g., acquire more clients, increase costs, or lower operating expenses).
Net Profit: Here is the single most important number you need to know for your business to become a financial success. If you aren’t making a profit, your company isn’t likely to survive for long.
Total revenues comparison with previous year/last month. By monitoring and comparing your full revenues over time, you’ll be able to make sound business selections and set better financial aims.
Average revenue per employee. It’s important to know this number to be able to set realistic productivity targets and recognize methods to streamline your business operations.
The next checklist lays out a advised timeline to deal with the accounting functions that may hold you attuned to the procedures of your business and streamline your tax preparation. The accuracy and timeliness of the numbers entered will affect the main element performance indicators that drive organization decisions that need to be made, on a daily, monthly and annual schedule towards profits.
Daily Accounting Tasks

Review your daily Cash flow position which means you don’t ‘grow broke’.
Since cash is the fuel for your business, you won’t ever wish to be running near empty. Start your entire day by checking how much cash you have on hand.
Weekly Accounting Tasks

2. Record Transactions

Record each transaction (billing customers, receiving cash from clients, paying vendors, etc.) in the correct account daily or weekly, based on volume. Although recording transactions manually or in Excel bed linens is acceptable, it is probably easier to use accounting program like QuickBooks. The huge benefits and control far outweigh the cost.

3. Document and File Receipts

Keep copies of most invoices sent, all cash receipts (cash, check and charge card deposits) and all cash obligations (cash, check, credit card statements, etc.).

Start a vendors record, sorted alphabetically, (Sears under “S”, CVS under “C,”and so on.) for easy access. Create a payroll data file sorted by payroll time and a bank statement document sorted by month. A standard habit would be to toss all paper receipts right into a box and make an effort to decipher them at tax period, but if you don’t have a small level of transactions, it’s better to have separate documents for assorted receipts kept organized as they come in. Many accounting software systems let you scan paper receipts and avoid physical files altogether

4. 物業托管 from Vendors

Every business must have an “unpaid vendors” folder. Keep an archive of each of one’s vendors that includes billing dates, amounts due and payment deadline. If vendors make discounts available for early payment, you might like to take advantage of that if you have the cash available.

5. Pay Vendors, Sign Checks

Track your accounts payable and have funds earmarked to cover your suppliers on time in order to avoid any late fees and maintain favorable relationships with them. If you are able to extend payment dates to net 60 or net 90, the better. Whether you make payments online or drop a check in the mail, keep copies of invoices sent and received using accounting computer software.