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Coin in piggy bank with text budget on paper, sunlight effect, business and finance concept, copy space. retro filter effect.

Budgets are an essential part of running any business competently and effectively. They function as a strategy of action for supervisors as well as a point of assessment at the period’s end. So how do budgets work exactly in the corporate world? And how does operational budgeting help the business to prosper and flourish? When most individuals think of budgets, they think of a typical domestic budget – given a set amount of cash, how much should be distributed to several expenditures? This structure generally works well for individuals, but in the corporate domain there is a lot more involved. Formalizing how much to spend on different expenses is only half the conflict. The other half is for a corporation to be able to efficiently judge its spending performance. Regardless of the type of industry, the capability to increase performance using budgets is a matter of life and death in the business world.  A Business program or Budget is very much a necessity for the smooth operation of any corporation.  It gives the association a delineate way to achieve the ends and their aims.

Planning and Function:

To achieve its objectives, a business must express its stratagem in a quantifiable method. The corporation must decide whether a project is financially reasonable, then link the company goals with the accessible resources. Corporate budgeting allows higher administration to cultivate a scheme that makes sense to those in the lower levels of the organization.

Think of your budget as a scheduling tool. Use it to accomplish your objectives by defining how much money you can spend on different features of your procedure.  Your periodic budgets should be archived so that you can revisit previous periods (for example, month-over-month or quarter-over-quarter) and estimate whether your corporation’s results are improving.  A master budget provides a synopsis of financial actions involving assets, liabilities, equity, revenue, expenses, and costs over a specific period of time. Owners first create a master or static budget with statistics based on planned inputs (sales revenue) and outputs (expenses).

Preparation and Efficiency:

Corporate budgeting works finest when the business keeps it clear and understandable, according to CFO Magazine. With more aspects to contemplate, more things can go wrong with planning and procedures.

Budgets are a prized tool for evaluating the performance of your business and the efficacy of your budget. Owners can use it to examine definite expenses, for example, as compared to the estimated expenditures. If there’s a large deviation between the two, the owner and the financial planner can review the budget for faults. Preparing a budget can be a lot to get your head around. All those figures spread among so many tasks over so many months can leave you dazed. But, it’s an important part of sustaining your business, as important as any marketing plan or publicity campaign. After all, you cannot plan for either of those unless you know how much money you can spend. 

Tools:

A corporation typically uses software to manage its communal budgeting process. The software shares the business’s budget with all the different departments, divisions and stores. This systematizes the conventions that each budget holds and permits the high-level supervisors to view the establishment’s overall performance. The business may use a simple spreadsheet to improve and monitor its corporate budgeting. However, specified corporate budgeting platforms usually work faster and assimilate better therefore reducing the resources the business must spend on corporate budgeting.

Final Note:

Despite its extensive use, corporate budgeting has its problems. The Harvard Business School even goes as far as to call corporate budgeting “a joke.” A business’s director may manipulate the numbers to make their performances seem superior, to reduce the quantity of work they must do, or to increase the extras they receive. This performance goes against the company’s interests. These glitches may even affect the economy beyond individual companies.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services 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 and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

Conducting business in the capacity of small-medium enterprise (SME) can be both a boon and bane for the entrepreneur. Whereas, it is easy to set up a business as an SME, sustaining it is a different story altogether.

Diverse People with Grand Opening Sign First Day of Business

1. Funding Issues – A Primary Small Business Challenge

Businesses in their initial phase of operations run into funding issues. The case of SME is also no different. There has to be an efficient conduct of bookkeeping strategies by the Head of Finance to ensure that the business does not run into funding problems. In the initial phase, it is best to keep the business in low gearing to minimize small business challenges. Thus, reliance on equity financing must be considered instead of debt financing. This is key to ensure that the business does not run into insolvency concerns later on.

It’s extremely rewarding to have employees who know how to utilize the bookkeeping framework that the business has assembled for them. With such frameworks, they have more opportunities to concentrate on what truly matters – the products and services their business offers.

In all fairness, it is not the case of time factor that SMEs are late to identify situations of financial difficulties.  In fact, it is the inability to foresee such a situation that accumulates small business challenges. There can be a million reasons why an entrepreneur would prefer not to do books or post write-ups on a predictable premise. In any case, they deal with the opportunity and the influence it can have upon the business.

Resorting to loans is common in a start-up business. There needs to be a carefully formulated and laid out approach on how the loans will be repaid. They tend to spiral out of control and can seriously damage business performance.

A legitimate bookkeeping framework set up in the very beginning will enable you to scale your business. You’ll have the capacity to distinguish patterns (both pros and cons) and ensure you’re meeting or surpassing your objectives.

It’s more simple to set up a correct accounting framework from the earliest starting point and then make changes moving forward. As you scale your business, your accounting needs will change and you’ll need to modify your framework to address small business challenges.

2. Establishing Clientele – A Key Small Business Challenge

As is the case with every new business, capturing market share can only come with attracting enough clients for the business. This is all the more important for any SME as it has to survive in the midst of large corporate giants who already hold large chunks of market share. Efficient marketing is key to addressing small business challenges in both the short term and the long run. The non-financial element of  a balanced scorecard needs to be given due bookkeeping consideration.

Every business in its start-up phase has key economic drivers that can generate maximum revenues. Rather than deploying every driver into earning revenues, it is smarter to focus on economic drivers that can greatly boost business performance. Once these have been capitalized, the focus can be shifted to other drivers as well.

3. Existence of Large Corporate Giants – Strategic Positioning

Strategic Positioning is one of the deepest strategic small business challenges. Survival in an industry dominated by the presence of large multinational corporations who have a vast market share and large resources at their disposal might seem unlikely for an SME. It is usually tactical bookkeeping measures that can keep an SME afloat in such competitive waters. Maintaining a sound liquidity and prudent gearing ratios can prove as a major source of advantage to the SME business. It may go on to prove itself as a niche for customers or even as a tactical or strategic partner of large businesses in the market. Digitalized bookkeeping frameworks can prove to be a source of positioning competitive advantage for an SME business

A digitalized accounting framework can take away a significant part of the anxiety you look to get rid of as an entrepreneur. For instance, on the off chance that you are stressed over productivity, obligation, and deals, the responses to these inquiries ought to be readily available. SMEs and privately-owned companies have heaps of opportunities to respond rapidly and offer individualized services. Extensive organizations tend to be moderate and bulky, winding up exceptionally systematized and set in their ways. That is one reason why you see expansive corporate giants purchasing up littler organizations to develop and remain in front of the market.

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About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services 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 and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.


Hacker using laptop. Hacking the Internet.

Finding out that your accountant is misappropriating business funds is difficult. They have complete knowledge and intellect to rig your records and books. If you doubt that your accountant is up to no good and are looking to prevent the fraud, here are some tips to detect those symptoms:

Warning Signs in Behavior of Employees

If all of a sudden, an employee starts working in a disorganized manner or remains dissatisfied and largely withdrawn, these are signs that something is not going well. There are some cases when employees suddenly start receiving a lot of personal calls. It is also important to remember that these types of behavior can occur for all sorts of reasons and not due to fraudulent activities alone.

However, if your accountant is someone who has private access to your company books, products and properties and he develops new habits such as coming to the office on holidays or working for longer hours, these are things which you should take note of if you want to know if someone is misappropriating business funds. Any of these signs are reason enough to keep a closer watch on the records and its handler to prevent the fraud.

Accountant in financial difficulties

Usually, accountants resort to the misappropriating of business funds when they are under certain emotional pressure or stress which forces them into committing this heinous activity. Addiction to drugs, gambling, divorce and so on, are some key symptoms that can lead to financial difficulties and debt. Then, it does not matter whether the accountant is a senior, junior, young, old, a man or a woman; they would pose a potential threat to the business.

It is the right of every individual to live in big houses, drive expensive vehicles and savor lavish vacations, provided that they can justify their means with known sources of income. There are times when people can be seen as living beyond their means. Some of the most common signs are overspending, running up credit cards, borrowing more than what can be managed, and so on. All of these will cause financial strain and can lead people to resort to illegal activities, including misappropriating the business fund.

All Eggs in One Basket

If your accountant advocates entire control of all the financial and management functions, there is good reason for you to work up contingencies for prevention of the fraud. A person in charge of entering the bill should not be responsible for applying payments. To ensure misappropriating business funds and prevent the fraud, it is important to segregate duties and establish a system of internal controls. There are occasions when owners make it too easy for accountants to commit fraud.

Establishing Internal Controls

One of the most common methods of reducing the risk of fraud is to set up a system of internal controls. This basically means separation of job duties. Whereas it is not possible to ensure complete prevention of the fraud and misappropriating business funds, but spreading the risk can cause its occurrence to decline. It can make it difficult for frauds to embezzle and increase chances of getting nabbed even if they commit.

Segregation of Duties

The rule of segregation of duties is the foundation of a strong internal control framework. To prevent the fraud, separation of duties includes partitioning the basic obligations into the three essential bookkeeping and accounting capacities between at least two representatives or offices.

It needs to be ensured that you distribute money related obligations and duties among different employees. The responsibilities must be spread out and not confined to one person; a worker who makes the bank reconciliation should not gather checks and money from the customers and the other way around. For instance, one individual can be placed accountable for accepting stock while another worker is allocated the errand of request taking. Furthermore, the individual accommodating the bank transactions ought to never be the one keeping its records and the checks.

Leveraging Outsource

Among all approaches, the best way to prevent the fraud of misappropriation of business funds is to outsource your accounting, bookkeeping and control capacities to an accomplished firm. This takes out the dangers related with an absence of internal controls and guarantees that each transaction is checked for accuracy.

The truth of the matter is that the more individuals you have supervising your books, the less chances are that your organization moves towards becoming a target for frauds. So notwithstanding giving a lot of assurance, outsourcing likewise gives you significant peace of mind.



Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services 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 and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Getting paid is one of the most thrilling parts of running a business. However, what is not as thrilling is monitoring your financials. Here are eight common accounting issues that harm your business.

Small business owners encountering accounting issues


  1. Make Time to Complete your Transactions

Whenever a receipt is issued, the receivable is booked, implying that a client owes you cash. Checking your receivable posting, you will see that the client’s adjustment is outstanding. When you get an installment from that client, it needs to be entered against the receipt so that is checked for being paid. In practical terms, this is easier said than done.  Customer’s deposits are frequently left to reconcile later since there is never enough time in a day. This is one of the most common accounting issues to affect your business funding.

  1. Regular Updates

With taxing time, you are left with a cluster of client deposits sitting in your income account and a receivables report that does not reveal the truth of the matter. This common accounting issue results in hours squandered updating the receivables posting, tax over payment, and high insolvent debts. Making it a point to catch up on your receivables and applying installments to invoices on a month-to-month premise can spare you huge amounts of business funding in the long haul.


  1. Not Having Genuine Records

One of the most common accounting issues that numerous entrepreneurs neglect is to spare duplicates of operational expense receipts, which can bring about a series of tax, bookkeeping, and income issues. How frequently have you taken an assessment of your ledger articulation and not understand what that $100 charge is?  Is it supplies, a business dinner, hardware or is it an individual cost you inadvertently paid by utilizing your business card?  Not having a genuine receipt that can give you insight about the charge can bring about inaccurately revealed costs and a high expense charge on your business funding.


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  1. Not Having Handy Deposits of Record

How might you amend your receipt issues? Spare a receipt of each business buy. That procedure may appear to be exceptionally unwieldy, so here are a couple of tips to make it less demanding and less tedious. Utilize your business bank or charge your card to pay for costs of doing business, have an envelope in your car or have a place to store every one of your receipts as opposed to placing them in your pocket, satchel, or more regrettable, trash can. Lack of organization is one of the most common accounting issues.


  1. Doing Your Own Taxation

Entrepreneurs frequently attempt to spare cash by doing their own taxation assessment. Truly, not employing an expert can cost truckloads of money. You may not assert every one of the conclusions you meet all requirements for or you may come up short on your assessment charge prompting penalties and different expenses on your business funding.


  1. Lack of Acquaintance with Technical Terms

It is the most despicable aspect of numerous entrepreneurs, less about the part where they have to meet with experts who adore gushing language and trendy expressions. The issue is that most entrepreneurs are excessively timid, making it impossible to tell their bookkeepers that they should speak in a layman terms.   


  1. Lack of Delegation

You are an entrepreneur. You are not a finance professional. And in no place does it say you must be avant-garde on all of the most recent bookkeeping blather. Furthermore, trendy expressions, language, and jargon are the reason you pay your bookkeeper. Deciphering all that techno-talk into dialect you comprehend can turn out to be a common accounting issue.


  1. Inefficient Bookkeeping

Would you rather hear this, ‘We utilized fast capital cost return to bear your assessment obligation to nil?’ Or, ‘There’s a transitory assessment program that lets us totally discount the greater part of the new PC gear you purchase. So, on the off chance that you require another IT unit, get it now because we’ll utilize that cost to get your expense charge down.’

The primary concern is whether you and your bookkeeper talk a similar dialect at the point that he/she is a piece of your group. They are watching your back and giving you exhortation that you can bet on. These are one of the most common accounting issues that can have an impact on business funding.


Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services 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 and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Effective business performance is key to survival in the start-up phase of any company. Implementing simple tactics can ensure success in a short span of time. Here are certain areas that entrepreneurs need to be mindful of in the initial stages of the business:

Small Business Owner working on making her start-up business successful

1.  The Right Focus on Your Target Audience

It is important not to try to please every person, as it leads the entrepreneur nowhere. In the words of Sally Hogshead: “If you’re not generating a negative reaction from someone, you’re not fascinating anyone.” Icebergs do not freeze up overnight. Hence, it is essential to start with something smaller, focus on a particular element and broaden it up later. Facebook is one such instance, as it was only for students at particular universities. The rest, as they say, is history. Apart from students, there are now Facebook accounts of juveniles, parents and even grandparents. This is the perfect instance of proper focus on the right audience.

2.  Social Media Utility

Direct interaction with your potential customers through social media is one of the most useful techniques for accessing the mass market. It is one of the most efficient methods for initiating a movement for a product or business. Apart from a wide coverage of target market, it is also a rather personalized method of marketing, which is quite cheap, if not free.

3.  Sticking to the very basics

In the start-up phase of a business, it is advised not to chase big ideas but rather focus on unique selling points. Business performance will work best if you turn your focus on the product’s unique characteristics relative to your competitors. In the beginning, it is recommended to focus on small, specific groups for which you have the most accurate idea of tastes, preferences and demands. They need to be observed for their behavior, interests and desires. It will not be too complicated, then, to find out which approach will be best for your target market.

4.  Keeping a Stringent Budget Line

It is perhaps the most obvious course of action which is often the most overlooked. Entrepreneurs need to remember that, in the start-up phase of the business, cash would run out if you do not keep track of the money spent. How the customers are going to be approached and retained matters less than how the cost will be managed. It is a good idea to keep a flowchart and spreadsheets for keeping track of costs and revenues. They also need to be updated and edited on a regular basis. To ensure your small company’s overall financial health, you must know the various tactics available for systematically and effectively getting rid of meager as well as serious cash outflows. From cutting down excess expenses to restructuring loans through a third party, adopting a proactive approach and formulating a payback plan enables small business owners to manage what they owe before it becomes unmanageable.

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5.  Planning Loan Contingencies

Resorting to loans is common in a start-up business. There needs to be a clearly formulated and laid down approach on how the loans will be repaid. They have a tendency to spiral out of control and can seriously damage business performance.

6.  Maintaining Liquidity

This is perhaps one element that most businesses do not put much emphasis on. The rule of thumb for entrepreneurs is that liquid assets must be twice the number of short-term dues. Then, and only then, a business can be considered covered. This should be a priority for doubling liquid assets.

7.  Going the Extra Mile for Customers

Satisfied customers are key for improving business performance in the start-up phase of a company. Entrepreneurs have to constantly look for ways in which customers can be satisfied. This can be determined by either after-sales services or efficient customer service.

8.  Polishing Economic Drivers of the Business

Every business in its start-up phase has key economic drivers that can generate maximum revenues. Rather than deploying every driver into earning revenues, it is smarter to focus on economic drivers that can greatly boost business performance. Once these have been capitalized, the focus can be shifted to other drivers as well.

9.  Customized Logos

This is also one area on which entrepreneurs do not place much emphasis. Logos are an efficient instrument to attract potential customers in the start-up phase of the business. Along with customers, it also develops a feeling of affiliation among employees, if logos are considered to represent them. Hence, this aspect is significant for effective business performance.

10.  Keeping a shorter chain of command

For a start-up business, it is recommended to keep a short chain of command for effective communication. A large chain of command can lead to a breakdown in the channel of communication and, subsequently, business performance

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services 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 and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.