Business Accounting Made Simple

Business Accounting Made Simple

All businesses, no matter the size, must grapple with the eventuality of difficult financial decisions. This may be something inconsequential such as the need to buy new signs or replace computers at the office. But financial decision-making can be a daunting challenge when it involves your own people and their livelihood. You may find yourself needing to fire one of your most loyal employees to keep the business afloat until the next quarter rolls around. This is never easy, even for managers who don’t mind firing employees who don’t rise quickly to the challenge of their workplace. Also, layoffs only address the short-term issue that affects your business now. If you find yourself in dire straits financially, the smart move is to address recurring drains on your company’s financial health for the long term.

Keeping track of the money

There is a reason why American businesses employ nearly 700,000 Certified Public Accountants. Financial missteps are the key failing of most shuttered business in our country, and entrepreneurial risk-takers are growing wise to the idea that they need to protect their money at all costs. The first thing a financial team must do is assess the cash flow and eliminate weak points. Why are you spending hundreds of dollars a month on printer paper? Have your electricity and other expenses remained level the past few months or have you seen spikes in your bill? Hammering out the deadweight in your expenses and streamlining your operation will cut down on unnecessary costs and maximize the profitability of the functions your team serves.

Forming good habits

However, your experience may be different. With robust CFO advisory functions, your business may never see some of these roadblocks. About 20 percent of new ventures survive past their first birthday, and success is contagious within an organization; the older it becomes, the more likely it is to continue operations. The fact is that good habits drive good business. Small organizations don’t have to worry about explosive office expansion in their infancy, but as a small business manager, you will absolutely deal with the gamet of worry about how to market your business, whom to work with, if and when to take a cash infusion, and how to continue the growth of your company. Sound financial decision-making processes early in your corporate life will translate into smart consideration later when your company employs hundreds instead of 12, and when the take for a month equals a figure that used to make up your yearly business.

Forming a team

Sound financial advice is hard to come by. Everyone you meet will have a different strategy and each talking head will eloquently explain why their process is superior to their peers. It can be a challenge to sift through all the noise. You really only have two options for common sense fiscal strategy. You can bolster your CFO’s financial team or outsource the work to a reputable firm who will work to advance your vision. Each path has its advantages, so you must consider the needs of your business and capture the spirit of where you hope to take it before diving in.

With in-house financial work, you need to consider a few things. First you must find a team of professionals who you trust with the company’s money and knowledge. You will also foot a steeper bill for this route, but your return on investment is a team of dedicated individuals who work for you and you alone. On the other hand, if you hire an accounting firm to handle your strategic planning and financial management you will get a team of professionals at a fraction of the cost. The only downside to consider is the lack of direct contact with these employees. The team you hire will not be physically in your office, making communication a phone call away rather than the cubicles a few steps away.

Financial planning for your business future is so much more than simply punching numbers into a spreadsheet. Financial stability is the lifeblood that supports the three new sales staff you hope to hire, the new office on the West Coast, and the eye-catching marketing campaign you want to run next month. Take the time to evaluate your financial future to ensure that your business has one.

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