| There are so many new software programs for small | | | | generating documents including checks, invoices, and |
| businesses that many new business owners are | | | | deposit slips. Do not 'save money' by getting versions |
| starting to think that small business and ecommerce | | | | with no duplicates. In fact, it might be a good idea to |
| businesses do not really need to be concerned with | | | | get the types that have two duplicates. |
| record keeping. This is a myth. Just because your | | | | It is better to have a separate duplicate that can be |
| spouse and best friend don't consider your business | | | | used in the audit trail, than to not have a good method |
| real, the auditors and revenue agency will hold you to | | | | of tracking the cash flow. |
| the same rules and regulations that apply to multi-million | | | | Do not get a pass book. Instead, ask for monthly |
| dollar corporations. | | | | statements to be mailed to you. These can be |
| There are a few methods of keeping books that will | | | | photocopied and used to double check which checks |
| serve both the government's regulations as well as the | | | | have been cashed, and which customer checks have |
| business's profit building measures. | | | | cleared the bank. |
| How Does Bookkeeping Help Improve Profits | | | | Do remember that it is illegal in most states to void a |
| Bookkeeping can help businesses track the | | | | payroll check. |
| percentage of a dollar that generates more income, | | | | -Banker Boxes |
| how much is needed to maintain the business, and | | | | Banker boxes are now available at every office |
| what is waste. Without a good bookkeeping system, | | | | supply store. They are cheap, and can be outfitted |
| investors, ecommerce businesses, and small | | | | with file racks to facilitate organization. These boxes |
| businesses cannot track these numbers and improve | | | | keep everything in one place, organized, and |
| their profits. | | | | convenient. |
| A company should devote at least 40% of their cash | | | | - Invoices |
| and time to income generating. Too many small | | | | One of the biggest problems for most small |
| businesses are unaware of the amount of money and | | | | businesses is the production of invoices. Businesses |
| time they spend generating income, or the amount is | | | | that use computer generated invoices should always |
| wasted. | | | | produce a copy for the audit trail. |
| Most small businesses ignore their project tracking | | | | -Checks |
| software. This can track the time and money invested | | | | When receiving checks, scan and print a copy. This |
| in a project, the income generated, profits earned, and | | | | improves the audit trail, and can solve any problems |
| calculate the percentage of money used to generate | | | | that arise in the bookkeeping methods, or suppliers |
| the income, and the other expenses used to sustain | | | | who claim they were not paid. |
| the project. | | | | -Cash Receivables |
| As businesses learn to use project management | | | | Many times a new business is asked to take money |
| systems effectively, they can learn to streamline their | | | | on payment. In many cases the business issues an |
| projects, reduce waste, and income the profit margins. | | | | invoice expecting to be paid. When they are not paid, |
| Avoiding Common Mistakes | | | | they are left to absorb the bad debt. Instead, have a |
| - Keep Good Records | | | | contract for any 'cash receivables' that are not paid |
| There are mistakes that a business makes that can | | | | immediately. If a contract is not appropriate, take a |
| land them in trouble. First, save everything. If a check is | | | | post dated check. |
| messed up, save the ruined copy, and make sure that | | | | These are the only two things that can be submitted |
| you have a record of the wasted check. This should | | | | to a collection agency with any hope of ever receiving |
| also be done for invoices, and any financial tracking | | | | any compensation. |
| paperwork that is numbered. | | | | As a last piece of advice, I would suggest that small |
| A good software program includes numbers, or | | | | businesses avoid petty cash boxes and ATM cards. It |
| spaces to include numbers that will let the business | | | | is too easy to 'haemorrhage cash' when it is readily |
| owner track everything. The most important thing is to | | | | available. All expenses should be thought out before |
| 'be consistent.' Changing bookkeeping methods ruins | | | | the purchase is made. It is too easy to lose track of |
| the charts and reports generated by the software. | | | | the business's budget if it is easy to access the |
| - Business Bank Account | | | | money. |
| A business bank account includes all the cash | | | | |