A good accounting system is critical to your business, but are you aware that, generally, the accounting function is the most neglected function of small businesses? It is no surprise that 50% of businesses fail within 6 months because business owners often ignore or put off the importance of record keeping, or tracking past performance. They are running their business blindfolded, not knowing where they are, where they have been, or in what direction they are heading. Don’t fall for this mistake!
Take Off The Blindfold!
The first step to creating a good accounting system is realizing the importance of having one. Information is critical for business owners! You need to recognize the value of good records and the knowledge that you can regularly receive from reviewing such records. Imagine knowing exactly where your business has performed, is currently performing, and the direction it is heading. That knowledge is powerful in helping you make any decision related to your business.
Don’t be fooled into thinking that once a year is good enough. Some business owners wait until the end of the year (tax season) to take a look at their finances. Ouch! What if in January of that year your company was actually losing money on a certain product you were selling, but since you were selling so many of them, you felt that things were ok. Well, imagine the surprise come tax season when you finally get the information.
Use an Accounting Software
I suggest you purchase and use an accounting system such as Quickbooks Pro, which is a comprehensive user-friendly accounting system. It keeps track of your business income and expenses, and generates Profit and Loss Statements, Balance Sheets, Income and Expense Statements, and Cash Flow Statements. It also keeps track of income by customer detail, expenses by vendor detail, produces income and expense graphs. Moreover, it has a check writer and performs bank reconciliation for your business. You can easily view and print Profit and Loss Statements, Balance Sheets, Income and Expense statements for any given period (monthly, bi-monthly, quarterly, or annually).
Karmen A. Booker is an Attorney, Business Consultant and Chief Consultant for Compu-Perfect Professional Services, a business consulting firm specializing in business incorporation, establishing limited liability companies, contract drafting & reviewing, and more. CALL ATTORNEY BOOKER at (301) 408-1082. View her website at www.compuperfect.net
She is also the author of “Biblical Entrepreneurship”. This book includes seven (7) vital steps to starting your business and detailed information on the legal requirements involved based on her experience as an attorney. This book is available for online purchase by clicking on the “Biblical Entrepreneurship” book cover on the right side bar of this Blog Site.