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Small Business Struggles - Complete Controller

There are mistakes that many people make when starting a small business. These mistakes can even occur when the business is up and running but can generally be avoided. Some of these mistakes can be unique to the business type or the individual owner, but many small businesses’ mistakes are quite common. When opening a small business and even in later stages of operations, there are missteps you want to avoid to have a lucrative business. Here are eight common mistakes small business owners make and how to avoid them. Check out America's Best Bookkeepers

No Business Plan

Business plans are essential to every business, whether large or small, or whether it is just beginning or has been around for many years. While writing a business plan can be a challenge, it will pay off if you have a well thought out business plan to utilize for investors, new staff, or even for you to refer to through the year to keep you on track. You must understand what your business plan needs for your specific business.

No Market Research

Researching the market you are in is of the utmost importance and should also be included in your business plan. It should also be something you constantly research as time goes on to remain competitive in your chosen market. It is also used to determine your target customer and should be done as often as you need to reassess your business to maximize profits and a competitive edge. You should also need to do research anytime there is a shift in your business.

Building the Wrong Team

A small business’s success will be dependent on not on your products or services, but it will also revolve around your staff. When employing staff, you must make selections that will work well in the business dynamic and with other staff members. It is also important that the team members have talents to serve your business the greatest and fill different positions needed for your company. Check out America's Best Bookkeepers

No Website

In today’s primarily digital world, not having a website for your business can be a serious mistake. Every business must be searchable by individuals who don’t know about your business but may launch a search that will bring them to you. Most small businesses don’t have a site because it is thought that the cost will be too expensive. However, having a website created is not as costly as you think, and there are even sites that you can develop your site for not a lot to free. However, you make it happen; creating a business website from the start is crucial.

No Financing

Many small business owners don’t get the right financing in place before starting. This lack of financing can trigger problems that become impossible swiftly and destroy the business. The way to prevent this mistake is to go back to the business plan. It should contain a detailed financial outline of your business, let you know how much capital you will need, and give investors an idea of your financial plan.

Mispricing Your Products or Services

Some small business owners have trouble coming up with the value of products and services. The fear is that people will not give you what you sell is priced too high. Your first step is to do research and set a price comparable to the market to face this issue. Another rule to follow is to figure out what the bare minimum is you need to make to pay bills and staff and do what needs to be done in the business and set your prices to match this need. Check out America's Best Bookkeepers

Failing to Invest in Marketing

In today’s digital world, marketing is not as expensive as it used to be. In many cases, marketing is free when using social media platforms to market. If you have the solid foundation of a business plan, marketing, and costs are built into the plan, there would be no surprises regarding planning and costs.

Ignoring Accounting and Bookkeeping

There are a lot of reasons accounting and bookkeeping needs focus. The main reason you need to focus on accounting and bookkeeping is to be aware of your business’s financial health. Whether you use a professional (recommended) or use a bookkeeping or accounting software and do it yourself, it is essential to control your business’s accounting and bookkeeping.

Conclusion

Starting and running a successful small business is not for the faint of heart. It requires dedication and intelligence. These are common mistakes, new or small business owners make. If you know what they are and have a plan, you can avoid these mistakes for your business’s lifespan.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Successful Small Business - Complete Controller

When starting a new small business, there are several areas of the startup process that an entrepreneur must execute to ensure the business launch’s success. Starting a new business can be a challenge. In light of this challenge, here are eight steps entrepreneurs can take that will help avoid making mistakes that will hurt a new small business.

Create a Business Plan

A well-written business plan with all the components needed for potential lenders, partners, and investors is essential for every small business to have. These components include an executive summary, company brief, organizational structure, market analysis, marketing plan, sales strategy, and financial plan. Your business plan will be upgraded and changed as your business develops and grows. However, the initial business plan should be focused purely on the needs of the startup. Check out America's Best Bookkeepers

Do Market Research

Though market research is included in the business plan, it cannot be stressed enough how important it is that a new business owner is aware of its market. Knowing your ideal demographic, the geographic advantages, competitor best practices and weaknesses, and other information that market research reveals will be essential at startup and beyond.

Build the Right Team

While a successful small business needs to have a strong and knowledgeable owner, it is equally important to have the right staff. When hiring for your new small business, you must consider skills and experience, but you also need to consider how your staff will function as a team. As opposed to a larger corporation, a small business is dependent on the team getting along well, so aspects of potential employees beyond skills and experience will also need to be factored into the hiring process. Check out America's Best Bookkeepers

Create an Optimized Website

When the Internet first started, having a company website seemed like an expensive and complicated dream. In today’s digital world, it is an assumption that any business has a website. A small business must have an informative website and lets potential customers know what your business offers. It also has to be optimized with keywords and other data so your business will show up in search engines. Many sites offer free website templates, or you can hire a professional to build and host a website for you.

Obtain Solid Financing

Financing your new small business will be essential. It may be impossible to even launch without it. There are many types of financing to consider if you are unable to finance your startup yourself. Some of the financing types include investors, friends or family loans, bank loans, and grants. The most crucial aspect of the financing is that you have plenty of capital to operate while working to profit. Most businesses that fail do so due to poor finances.

Pricing Your Products and Services

Pricing your products and services may seem like a difficulty. If you price too high, people may not even give you a chance, but if you price too low, you may risk not covering costs and not making a profit. Pricing is another area where research is key, and knowing the market you are in and what others in similar businesses in your area are charging will be vital to setting your prices correctly from the start. Check out America's Best Bookkeepers

Invest in Marketing

Many small business owners believe they can’t afford marketing. The idea that you have to run ads or slap your product or service on a billboard may seem overwhelming or expensive. In the digital world, when it comes to marketing, you can spend little to no money and drive a lot of business your way if you know what to do. Using social media and some low-cost advertising strategies will make marketing not only inexpensive but easy to accomplish.

Focus on Accounting and Bookkeeping

Since the entire purpose of having a business is to make a profit, every company’s main focus is financial. From the beginning of your small business, you should have an accounting and bookkeeping plan in place. Whether it is employing an accountant or bookkeeper or using accounting software, do not start your business without this in place from day one.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Business Finances in Order - Complete Controller

Accounting and bookkeeping are essential tools for keeping business finances in order, but first, there are other issues you need to address as a business owner. The first step to the financial health of your business is to separate business finances from personal ones.

It is a common mistake of a business owner to mix both business and personal finances. It’s natural since, in most cases, the start-up capital, or at least some of it, was from the owner’s savings or salary from another source of income. This mix of business and personal finances should be addressed early, and the separation was done as soon as possible. Check out America's Best Bookkeepers

It is impossible to determine the company’s actual profit and losses if you supplement the business’s income with personal finances outside of start-up capital. It’s not to say that you can’t use your finances to fund the business, but you should be treated as any other investor and should pay yourself back from profits.

Separating the finances is not the only step you should take. It would be best if you also made your business a limited liability company. This simple move will protect your finances if your business goes bankrupt, is audited, or has a lawsuit filed against it. In addition to separating your business and personal finances, here are five tips to help you keep your business finances in order.

Get organized

The best way to get organized when it comes to business finances is to use a professional accountant or bookkeeper or use accounting and bookkeeping software. Using these professionals and tools will keep your finances in check. This organization will help you to remember the due dates of invoices for on-time payments and receipts. Lack of organization can result in lead to late fees, high-interest payments, or loss of business. Check out America's Best Bookkeepers

Know Your Fixed and Variable Expenses

Fixed expenses are those you must pay every month without fail; these are your utilities, such as water and electricity. It also includes other business finances, such as telephone, payroll, and taxes. Variable expenses are those costs that aren’t consistent and vary in cost and change or cease to exist. The knowledge of both your fixed and variable expenses will keep your finances in order and make bookkeeping easy and accurate.

Billing Strategy

Many small businesses struggle with finances due to billing issues. Accounts receivable is often a place within a small business where improvement is needed. There are several ways you can address billing issues. You can require the customer to pay in full upfront. In some businesses, demanding payment in full may not be suitable for getting and retaining customers. If that is the case, you can still get more invoices paid by offering customers a 2% discount on the total bill if they pay in full within ten days and make payment in full due within thirty days. These incentives are often used by clients of companies who implement the practice. Check out America's Best Bookkeepers

Track Your Books Closely

If you are working with a bookkeeper, review and monitor your books daily or monthly. This monitoring of the books will avoid negative surprises. Knowing your books will help you formulate strategies for increasing profit and lowering expenses, and it can also help identify fraud.  Even if you hire a professional accountant or bookkeeper, you, as the business owner, should always be aware of what is happening when it comes to your business finances.

Make Good Financial Habits

Being aware of your business finances and having a hand, at least to some degree, in your company’s bookkeeping is a great habit to get into, but you can do more. Set aside time every week or month, depending on your business’s volume, go over your books, and strategize as needed to keep your business finances in order.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Professional Bookkeeper - Complete Controller

Bookkeepers are the need of every single business, whether small or large. When starting a small business, having a bookkeeper can be invaluable and define its success or failure. When obtaining financing, it would be in your best interest to hire a professional bookkeeper rather than attempting to handle the business’s books on your own. On starting a small business, bookkeeping is something that defines the success or failure of a business.

It might be a challenge for an employer to hire the right professional bookkeeper who is skilled and affordable. These challenges can be overcome by understanding what your business needs when it comes to bookkeeping. Here are five qualities to look for in a professional bookkeeper. Check out America's Best Bookkeepers

Knowledge of the Latest Technology

At present, the world is making use of technology to increase its productivity and stay competitive. Today, bookkeepers must not only know standard bookkeeping, but they also need to be tech-savvy and understand how to use the most efficient accounting and bookkeeping technology. Furthermore, a professional bookkeeper needs the skill to point out any inaccuracies in the data going through the technology is a necessity. Staying in touch with innovation should be the core skill of a bookkeeper, for example, knowing software that helps run specific niches of the business.

Great Communication Skills

The work of a bookkeeper isn’t bound to a single thing. Instead, the person must have the ability to work alongside other teams. For this reason, the bookkeepers need to have great communication skills to convey their message properly.

The world has evolved so much that it has taken the shape of a global village, where one country can work for another country quite easily. A business owner looking to grow his business must get hired by people of other countries. A business will get not only international clients but also the benefits of foreign exchange currency. Communication can be a call, mail, or even a social media message. This is why a bookkeeper must have great verbal as well as written communications skills. Check out America's Best Bookkeepers

Education in Basic Accounting

A bookkeeper must be good at accounting basics and have experience in bookkeeping to become an expert in their skills. Employers are looking for skilled bookkeepers with the appropriate education and experience to entrust with their finances, which are of high importance to any business.

Every bookkeeper must have a basic knowledge of the principles of specialized bookkeeping. Professional certification is a must for any individual in the field. Gaining experience and knowledge by working under a supervisor is a plus for any bookkeeper desiring to expand their career. The experience gained makes a bookkeeper a professional and in demand by businesses both large and small.

Accuracy

Accuracy is critical to the bookkeeping professional. A single error of one digit can cause tremendous problems. Attention to detail is a skill that all bookkeepers should possess, as accounting mistakes can destroy even the most successful business in the products or services they offer. It is understandable that people, even professional bookkeepers, are human and can make mistakes. However, they should be skilled and detail-oriented enough to catch and correct any mistakes before any damage can be done. Check out America's Best Bookkeepers

Organization Skills

One of the most important skills to look for in a professional bookkeeper is their organizational skills. A bookkeeper who knows how to organize their data and keep records up to date will be successful, and therefore so will your business. Working with a lot of unorganized data is a part of the job, but a bookkeeper can save a lot of time through proper organization.

Conclusion

Besides the five skills stated above, a professional bookkeeper needs to be committed to what they do in the business. Through this commitment, a professional bookkeeper shows that they value their clients and their business. This value makes them important to the companies they work for and strengthens the business by keeping on top of finances.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Corporate Giants - Complete Controller

Why Innovation Should Be at the Heart of Your Services

If your business is established and has a substantial presence in the market, it makes sense that you can easily penetrate international markets. Your scope will be diverse, and you can achieve milestones more than any other local brand. Using innovation as an advantage will benefit your brand and allow you to compete with the big boys. But for that to be the case, you must take care to use the right techniques to garner the perks of said innovation.

For quite some time, it is believed that the bigger the business is, the better contender they become in the local marketplace. However, in almost every case, innovation upsets this very trend and has been doing so for quite some time. Check out America's Best Bookkeepers

Comparatively, a small business using innovation to their advantage is punching above their weight and competing with the industry giants quite earnestly.  When compared with cash and assets, information has become the last obstacle that needs to be carefully considered to avoid any discrepancies. As a small business competing against most of the world’s giants, it is crucial that they devise just the right strategy and conduct proper research to use to their advantage.

If that is not all, one can utilize innovation even in the most extreme case. The idea is that small businesses face quite a few barriers as opposed to local markets. Calling innovation one of the secret weapons of SME would not be an overstatement, and your brand should consider utilizing it to achieve milestones. The uniqueness of your brand’s tools and strategies gives it a competitive advantage over others. Innovation scales up the field by having SMEs become easily portable realistically. Also, it works to empower them to come out of their comfort zone, increasing their human and other resources to generate substantial profit and income. Check out America's Best Bookkeepers

Mobility of SMEs

With technology encouraging the development of small businesses, SME mobility has only improved over time. With innovation and entrepreneurs working outside their prompt region, they gain access to new markets and easily partake in most exercises that create value in their work for both themselves and their organization.

That said, accessibility to SMEs can be obtained without having any physical access. However, to quite an extent, most financial matters and innumerable organizations have taken full advantage of the opportunities that technological advancement provides.

Innovation plays quite a substantial part in enhancing an organization’s productivity.  

 

The Benefits of Marketing and Online Networking

First and foremost – using the right promotion strategies reaps several benefits. One of the biggest advantages for small businesses using innovation to their benefit is that it keeps them connected with several of the market’s giants. Precisely, as a solo business owner, you can find it difficult to operate among several other contenders. However, by using the right tools, you can speak with all your prospective clients for any purpose.

Simply put, web-based social networking has made client correspondences fast-tracked and quite straightforward. Communication patterns within the organization have become simple, and you get to connect with your clients, vendors, and customers without going the extra mile. Precisely, communication has only become more streamlined, and most of the private ventures prefer online networking for the many benefits it provides for online correspondence. Check out America's Best Bookkeepers

Accounting and Financial Reporting

 Online bookkeeping and relative software programs have increased and enhanced businesses’ accounting efficiency to quite an extent. Previously, SMEs could not outsource or use accounting software because of its unavailability.

However, companies are exploring new boundaries related to financial management, and financial statements are now catered towards using innovation to their benefit when utilizing innovation. These advancements in versatile software programs are opening doors for organizations to improve their bookkeeping methods and use them to their advantage.

Bottom Line

If you wish to achieve milestones amongst corporate giants, using innovative tools to your advantage, can a wise decision for your business. Ensure to use the right tools and advancements in technology to grow your brand into the giant, you know it can be!

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Corruption in Your Business - Complete Controller

If you own your own business, you probably know the ways in which a brand can be subject to corruption. However, with several people working under you, it may be hard to spot the root of the discrepancy and how deep it runs. Your most trusted bookkeeper could be cooking the books right under your nose, and you may never suspect it!

One of the most common sources of fraud is theft. This may come in the form of stealing cash, embezzlement, and misappropriation of cash, inventory, or other physical assets. All

these transgressions are severe and can threaten the life of your business, as well as have legal ramifications. Check out America's Best Bookkeepers

However, frauds are most witnessed in small to medium-sized businesses due to the lack of proper security checkups and fraud-proofed operation systems. Also supporting this claim is the fact that in a small business, usually, only one person is responsible for the bookkeeping and accounting functions. They are single-handedly entrusted with receiving cash, payments, payroll tracking expenses, paying bills, bank deposits, and more! Being able to work privately and on their own, a bookkeeper may be tempted to involve themselves in fraud or embezzlement.

 

If you are constantly on edge and confused as to why your business is not bringing in more profits, despite all your efforts, chances are your brand is being corrupted by your own employees. Read our signs to watch out for, as well as ways to protect your business from fraud.

Detect the Signs for Corruptions 

With every business, there is always a chance of corruption. However, detecting corruption in a small business can be relatively simple. Possible signs that may indicate fraud, theft, or embezzlement in the business are most often apparent. It is important to pay close attention to signs of potential corruption and dig deeper to find the root. One such way you can achieve this is by keeping a closer eye on your trusted employees to avoid any fraud. Money makes people do some crazy things. Check out America's Best Bookkeepers

Study Your Accounting Statements

Studying your accounting statements is crucial to saving your company from corruption. However, to do an accurate assessment, you must have a basic understanding of what you are looking at. It may be a good idea to do some research about your financial statements. Understanding how the statements work and what they are saying is necessary for finding potential corruption.

Maintain a System of Checks and Balances Among Your Employees

Be sure to keep a system of checks and balances within your staff. Sure, you trust them. Still, it is of the utmost importance to audit their work regularly to ensure compliance. By doing this, you will stay current with your financial affairs, as well as reduce corruption.

Look for any Excessive transactions Taking Place

Excessive spending by employees is not conducive to financial stability. Scrutinizing the spending habits of your employees is an excellent way to avoid corruption.

Keep all the Cameras on

Today, most offices have cameras in almost every nook and cranny to protect the business from theft, inappropriate behavior, time-wasting, etc. Keep these cameras on during and after the shift to ensure safety and prevent fraud. Check out America's Best Bookkeepers

Avoid Late Working

In most companies, an employee who stays late to finish the job is appreciated and praised. However, having the office all to themselves may contribute to corruption. For this reason, it is recommended to advise against being alone in the office.

Advance into Technology – Use Accounting Software

Whether you use electronic systems for your accounting or do the bookkeeping manually on a register, take great care to ensure there are no discrepancies. Your financial statements should match every cash flow statement and balance sheet of the accounts.

However, due to human error, consider investing in software to manage your books. This may help in preventing fraud and increasing efficiency.

Make Auditing a Routine Practice

As stated above, delegating the accounting to only one person may open doors to corruption and fraud. However, if this is the way it must be for your business, make it a practice to audit your own accounts regularly. This will promote a culture of honesty and integrity.

Conclusion

There you have it! You have just read some of the most practical ways of detecting corruption in your business. Use them to your advantage and remember, there is nothing wrong with being vigilant. It is your business and, therefore, your neck on the line!  

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Costs in Accounting - Complete Controller

The evaluation of costs determines the identification and amount of the respective cost types. These amounts are included in further calculations of cost and performance accounting. Payments from financial accounting are used to evaluate some cost types, such as personnel costs or external services used by the business. Since these costs can vary, average values or normal costs are usually used.

In the cost and performance calculation, the costs can also be assessed according to the following factors:

  • Transfer pricing
  • Average prices
  • Replacement prices
  • Opportunities (for example, capital costs) Check out America's Best Bookkeepers

Structure and categorization of costs

In order to get a systematic cost breakdown in your company, one should observe the following principles:

  • Principle of uniformity
    • Cost types should be structured in such a way that different people can assign the same facts at different times.
  • Completeness principle
    • All cost types incurred by one’s company must be included in the outline. It is important to include all expenditures to ensure an accurate evaluation and understanding.
  • Principle of uniqueness or freedom of overlap
    • Costs may not be recorded and offset multiple times. They must be assigned to a category without overlap to ensure accuracy.

If one observes these principles, they can characterize cost types differently. The details of each feature one uses to differentiate between categories depends on the questions and purposes of the cost element calculation. In reference to production quantity, the following characterizations and classifications of costs are mostly used for planning and calculation: Check out America's Best Bookkeepers

  • Variable costs
  • Fixed costs
  • Fixed costs after offsetting on products and services (also referred to as Cost Unit Accounting)
  • Relevant indirect costs
  • Overhead according to the location in the value chain where the costs are incurred
  • Relevant in primary costs
  • Secondary costs after division into functional areas
  • Relevant in production costs
  • Also referred to as Administrative Expenses and Procurement Costs

The meaning of these cost terms and the respective characteristics are explained with great detail online if you would like to further understand each one.

Create a cost element plan

Once the information about cost types is gathered, one can then begin to create a cost type plan. This is a list of the cost types that includes respective characteristics, possible input variables, measurement methods, and evaluations. Actual costs can then be entered and assigned to the period in which they were incurred. The normal costs and the planned costs can then be derived from the actual costs. With some practice, this will become less confusing and very simple to do.  Check out America's Best Bookkeepers

Practice

One can then compile data for their own purposes. For example, the financial or budget planning of a business case. The following questions should be considered for this type of analysis:

  • What types of costs can arise?
  • How are the consumption of materials and hours measured on which the costs are based?
  • Which procedures and calculation methods are used to determine the amount/amounts of the respective costs? For example, surcharges, average values, acquisition costs, payments, etc.?
  • Which time periods are considered and differentiated? Year, quarter, month, week, day?

Enter this information in a cost element plan. Pay close attention to the following principles:

  • Uniformity
  • Completeness
  • Uniqueness

Example personnel costs

In the first step, the personnel costs can be derived from accounting data, payments for wages and salaries, as well as social insurance (ancillary wage costs). For further calculations, these personnel costs must be considered differently. For this purpose, personnel costs are determined based on time tickets or daily work reports. The non-wage costs are then added to the wage costs using previously calculated surcharge rates.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Hiring Professional Bookkeeper - Complete Controller

A bookkeeper is responsible for recording the transactions of a business. A business undergoes different financial activities that need to be recorded to know its expenses, revenues, and spending patterns. Different activities occur in a company every day, such as buying raw materials for production, sending finished goods to suppliers, maintaining the warehouse, and more. All this work requires money and must become part of the financial data. If left unrecorded, the company will not have accurate financial data. The expenses, profits, and other information cannot be obtained with accuracy, which hinders efficient decision-making and problem-solving. Here are four reasons you should hire a professional bookkeeper to take care of your bookkeeping needs. Check out America's Best Bookkeepers

When Experiencing Difficulty in Recording

Although bookkeeping is a basic recording of financial data, it still requires accounting, such as categorizing expenses. If the data is not categorized properly, the business cannot know how many expenses were incurred or how many profits were made. This means that the business will not be able to project future sales and profits efficiently. Also, inaccurate categorization may lead to higher tax payments, which lay undue pressure on the company. Since the data is utilized in making financial statements, the need for its accuracy is high. Therefore, if the entrepreneur realizes that he struggles with data recording, he should consider giving the bookkeeper the responsibility. Check out America's Best Bookkeepers

When Unable to Manage the Responsibility

When someone starts a new business or a company, he keeps a short team to avoid paying salaries and wages. Therefore, every member has to look after different jobs at one time. For example, one person may be responsible for marketing, bookkeeping, and customer relationship, which means that he has a lot on his plate every time. With a lot of responsibilities, it is common for one of them to get neglected. However, bookkeeping must be taken seriously as it depicts the potential and profitability of the business. If it is realized that the team is unable to record the financial transactions regularly, then a bookkeeper should be hired.

When Regular Problems in Bookkeeping are Noticed

It is not necessary to hire a bookkeeper if someone in the team can handle the work. However, a bookkeeper must be hired if the job is not being done properly. Regular problems in bookkeeping is a major problem as it means that the data is not recorded accurately. If more expenses are entered, then the profitability calculated in the financial will be lower. Therefore, the company may fail to attract investors. Check out America's Best Bookkeepers

Similarly, if all the receipts are not recorded, the chances of reporting fewer revenues and expenses are high. If the business realizes that accuracy is missing in bookkeeping, then it must hire a bookkeeper. The problems are evident during bank reconciliation at the end of a period.

When the Business is Growing

As the business grows, it becomes difficult for people to handle more than one responsibility. With many responsibilities on one person, the quality of work delivered by the individual is negatively affected. Therefore, it becomes important to delegate tasks to different competent and well-versed people in doing the assigned job. Growing businesses also demand efficiency to continue delivering high-quality products and services. Thus, the business must do all it can to manage its operations. A growing business must hire a bookkeeper as recording transactions will increase and become difficult for the company to manage otherwise.

A bookkeeper will efficiently record financial transactions, providing accurate data for financial statements and decision-making. Realizing the importance of accurate bookkeeping, it is concluded that entrepreneurs and small businesses should not be reluctant to hire a bookkeeper if required. The problems arising because of inaccurate recording can cause a lot of damage to the company’s strategies and reputation; therefore, help should be taken from professional bookkeepers.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Profit and Loss Statement - Complete Controller

A profit and loss statement is revenue and expenses report that is taken over a specific timeframe. This timeframe could be a quarter or fiscal year or another predetermined timeframe that needs the profit and loss statement, also known as an income statement. The profit and loss or income statement’s main purpose is to report whether your company may profit gains for profit losses during the reporting period.

The profit and loss statement can help with your business taxes when building your business credit and give your shareholders an overview of the gains and losses over a period. This statement is included in some accounting and bookkeeping software, and there are easy to use templates available online and within document creation software.

Types of Profit and Loss Statements Check out America's Best Bookkeepers

Pro Forma

Though your business will not have any profit or expenses to report, you should still have a profit and loss statement at the beginning of your business included in your business plan. This would be a projection of the expected gains and losses of your company. When someone is looking to invest or lend capital to your company, having a profit and loss statement can help put your company’s financial aspect into perspective.

Periodic

Because a profit and loss statement can be of great value when determining your company’s gains and losses, they should be prepared at regular intervals. They can be done monthly, quarterly, or yearly. However, the more frequent you create a profit and loss statement, the better so that you will always know your business’s financial health. It is also helpful to determine where expenses can be cut, and marketing focus needs to increase profit.

Periodic profit and loss statements can also be done upon demand as needed for tax purposes or to inform investors, lenders, or shareholders as needed. Profit and loss statements are useful for a multitude of reasons.

What Information Goes on a Profit and Loss Statement? Check out America's Best Bookkeepers

Income

  • Sales Revenue
  • Affiliate Commissions
  • Rent and Lease Payments
  • Royalties
  • Non-Operating Income
  • Gains

Expenses

  • Operating Costs
  • Costs of Goods Sold
  • Depreciation and Amortization
  • Taxes
  • Interest Paid on Debt
  • Cash Receipts

Why You Need a Profit and Loss Statement?

The main purpose of a profit and loss statement is to give an overview of your business gains and losses. There are many reasons why you may need a profit and loss statement. Here are some of the reasons:

  • Tax preparation
  • To improve your bottom line
  • To prepare a budget
  • To obtain financing
  • To improve business credit ratings
  • To assess business growth Check out America's Best Bookkeepers

The profit and loss statement is a tool that will help give your company, investors, lenders, and shareholders an overview of what the company is making and what the company is losing. This can help the company decide whether they need additional funding, cutbacks on spending, or increased marketing.

Conclusion

For your business’s long-term success, you must regularly produce a profit and loss statement. The Profit and Loss will help you and your business track the financial health of the company. This knowledge of your financial health will let you and your stakeholders know if you need to keep the same areas and the other areas you need to change.

Because of the importance of the profit and loss statement, if you are not confident about creating one, you can hire a professional accountant to help you create one. If you cannot afford to hire an accountant, software or templates are available online. It is fairly simple to create a profit and loss statement.

The most important takeaway is that profit and loss statements are essential to running a business. You need to be sure they are produced and used regularly to be on top of your business’ financial health. If you need to improve or other areas, you need to increase your focus. These regular statements will ensure you know exactly what is going on financially in your business.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Electronic Invoices - Complete Controller

There are several kinds of accounting software available to small businesses. Whether it is overall accounting and bookkeeping software, inventory software, payroll software, or other business-related software that helps with the financial aspects of operations, most small businesses employ the use of one or more of these. Now there is software specifically related to electronic invoicing.

Some accounting software includes an electronic invoicing in the overall business accounting software package, but many do not. This would be the reason you may want to consider getting electronic invoicing software. Here are eight reasons you should be electronically invoicing now! Check out America's Best Bookkeepers

Save time

Because of the automation, electronic invoicing saves a large amount of time previously spent manually invoicing. Many of the steps are eliminated once the process is automated because they are unnecessary in the electronic invoicing process.

Reducing Costs

When using the manual, paper invoicing, there are several costs involved. Printer ink, paper, envelopes, and postage are all costs involved in manual and paper invoicing. Besides the initial cost of the software, there is no cost involved in electronically invoicing your customers. It also saves money if you have to follow-up with reminders and late notices. Some companies give the customer the option to go paperless, but you will save money by electronically invoicing.

Reducing Errors

Because manual invoicing requires so many steps done manually, it increases the chances of errors in the process. There are many opportunities for errors, whether typos or incorrect data in the invoice or incorrectly addressing the envelope. Electronic invoicing still requires input. However, it will generally prompt error checks, and the rest of the process is automated and via email, so the chance of errors is minimized. Check out America's Best Bookkeepers

Customer Service

Because of the reduction in time, cost, and errors, there is a direct benefit to your customer. Also, because they will receive their invoices immediately, they can add the cost to their budget. Electronic invoicing is also more professional and can increase the overall positive impression of your business. The ease, accuracy, and speed will also increase customer confidence in your business’s abilities creating long-term customers.

Get Paid Quickly

Because the customer is invoiced immediately instead of the time it takes to mail an invoice, it is far more likely the invoice will be paid quickly. Most customers who fail to pay forget about the payment. With electronic invoicing, they will receive the initial invoice, but reminders are more easily sent because of the simplification of the process.

Reducing Paper Use

With awareness of the environment and recycling being the focus of many, reducing paper use will benefit the environment. The reduction of paper for the invoice and the envelope will positively impact and give your customers who are concerned with the environment another reason to choose your company. Check out America's Best Bookkeepers

Accurate Record-Keeping

Because the process is generated and recorded through the software, this will ensure accurate records. This accuracy is especially important for taxes and operations. It also allows an overview of outstanding invoices that may require more intense measures to recover. Overall you will have easy to understand records that will help keep accounting and bookkeeping accurate and efficient.

More Control

Manual invoicing also means manual record-keeping and other processes. Having the electronic invoicing process from beginning to recording in the software gives you more control over your invoices and the invoicing process. Most of the invoicing issues are that the manual process can allow the invoices to get away from you. This control and accuracy, ease of access to what has been received, and what is out will give you strong invoicing control.

Conclusion

There are no downsides to electronic invoicing, and no reason it should not be utilized in your business immediately. Electronic invoicing saves time, money, and errors and will give you and your accountant accuracy and more control.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers