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Know the Rules - Complete Controller

When it comes to financial health, every financially responsible person should follow dos and don’ts. Here are six excellent financial rules of thumb that, if followed, can save you BIG!

 

Say NO to Credit Cards Check out America's Best Bookkeepers

Saying no to credit cards is a rule of thumb that every person should follow. I know some would argue that they are good for emergencies, but a better idea would be to use the money you save on credit card high-interest payments to start an emergency savings account, one that gains your interest. Credit card debt is a billion-dollar industry and mainly from the interest people pay, not the principle. Even if you have a fantastic credit score, say no to a credit card and keep it that way.

 

Don’t Buy an Expensive Vehicle

While many vehicles are a status symbol, paying a lot for status is not a good rule of thumb. The good rule of thumb when it comes to purchasing transportation is the final price should not be more than half of your yearly income. If you can’t afford to pay for a vehicle in cash, only buy from a dealership where you can get a decent interest rate and affordable car payment amount not to exceed a quarter of your monthly income. When negotiating, make the salesperson give you the final total cost of the car with and without interest, don’t let them only give you the price in the monthly payment amount. This way of presenting the cost of the vehicle often hides high-interest rates or vehicle price. And of course, as always, buy used if you can. Check out America's Best Bookkeepers

 

Be Choosy About Insurance

The rule of thumb on insurance is only buy what you need. Because insurance is something you pay into “just in case,” you must be smart when purchasing it. Some insurance is required by law, such as automobile insurance; therefore, get the best coverage but shop around for the best prices, I could make hundreds of dollars of difference. Health insurance, homeowners or renters insurance, and life insurance are other types of coverages you should have, but shop around for the most excellent coverage and the least expense.

 

10/10/80

Savings should be the number one priority of every financially responsible person. There is a rule that says save 10%, give 10%, and spend 80% as a simple means of allocating your income. While this is an excellent rule of thumb, this should be a starting point towards savings and giving. The most important thing is that you save, give, and thoughtfully spend. You can adjust the allocation percentages to fit your goals and lifestyle. But one rule of thumb that comes from the 10/10/80 method is that savings are first, not last. Warren Buffet explained that you should save first before you spend, not the other way around.

 

50/30/20

50/30/20 is another money allocation rule of thumb. This rule of thumb also has savings built-in, but only after debt is paid off. This rule is 50% of your income for necessities and bills, 30% towards financial goals such as paying down debt and savings, and 20% to wants, which is anything you desire to purchase that isn’t in the other two categories. This rule of thumb can be adjusted according to your lifestyle, but it does not prioritize savings like the 10/10/80 rule of thumb. Check out America's Best Bookkeepers

 

20% Down Payment

The 20% down payment rule is the idea that anything you will buy on credit should have 20% of the total cost saved before the purchase. This rule is mostly applicable to purchasing a home or a vehicle. The idea is that paying 20% of the total cost upfront will lower interest and payments, adding up to considerable savings when the final payment is made. This rule can be applied to anything you buy on credit, even if the place of purchase doesn’t accept a down payment. If you can pay down 20% of the total cost in your first payment, this will bring you to your payoff date sooner and save you money on interest.

 

Conclusion

Financial health and freedom should be every financially responsible person’s goal. While there are many things you can do to contribute to your financial health and freedom, using one or more of these rules of thumb will ensure you reach this goal.

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
healthy savings - Complete Controller

Many adults, though they may try, are in poor financial health. This is due to high debt and lack of savings and financial planning. Most would likely cite money as a significant source of stress though the principals to reach financial health are simple, don’t live beyond your means, and have some savings for the future. While this does sound easy, it proves difficult for one simple reason; financial psychology.

People fail to realize that when they get to a place of complete financial breakdown and sleep-depriving stress, money problems have as much to do with the mind as it does money management skills. You can talk yourself into and out of financial health issues by merely having the wrong mentality. Here are five mentally focused steps to psych yourself up to better financial health. Check out America's Best Bookkeepers

Identify Three Financial Goals

Identifying a specific number of goals helps you figure out what is most important to you. Keeping it limited makes the goals more easily attained then having several financial goals that are waiting to be reached all at once.

Name Your Financial Goals

This step is going to seem silly, but in reality, it is a highly effective technique. Instead of calling a goal “retirement” call it something more exciting like “Golden Years Goals.” This simple mental trick will help keep your goals in focus.

Time-stamp Your Goals

Once you have named your financial goals, it’s time to give them a deadline. This time-stamp can be a specific date, or simply a month or a year. What’s important to remember is that by setting the time-stamp or deadline, you will not leave the goals lingering unreached because you have an achievement goal. Check out America's Best Bookkeepers

Picture Your Financial Goals

Visualizing has been a form of mental goal setting used successfully for years. There are many ways you can bring out visualization, and you should do the method that is right for you and proves the most successful. Here are some methods of visualization that work.

  • Picture yourself succeeding
    If you see yourself with the things you hope to accomplish by saving towards your future, you will more likely complete it in reality
  • Create a vision board when most people think of a vision board; they see something arts and craftsy. In some ways, it is, but this gets you creatively involved in your goals. It doesn’t have to be a board; it could be a vision wall or whiteboard. It just needs to be interactive.
  • Meditate or pray towards success

Meditating or praying towards your goals connects you spiritually to your vision, which adds to the visualization and success.

  • Daily affirmations

These affirmations are a way of verbally claiming these goals until they are obtained in reality.

  • Mental rehearsal

Mental rehearsal is something athletes have used towards winning. Mental rehearsal is going into your mind and seeing yourself making the plays or taking the steps and seeing the winning outcome. Check out America's Best Bookkeepers

Automate to Success

Now that you have set the goals, it’s time to automate them to success. One of the best ways to trick ourselves mentally when it comes to financial health is the theory that if money is allocated to savings automatically, we get used to the lower amount of spendable income, and we “don’t miss it.” We already take part in the automation when taxes are withheld, and what we receive in our paycheck is the net income after the IRS and social security take their allotment out. Using automation for savings lowers the net income more and puts the money withheld into one or various accounts set up for savings.

Conclusion

Financial psychology is directly related to financial health, so your mind is as essential as learning money management skills. If you use these simple steps, you will say goodbye to the stress money issues have been causing you for years.

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

3D Illustration, Financial accounting stock market graphs analysis, growing world economy.
The financial health of a business corporation refers to the financial state of a business which illustrates the well-being of its operations. Financial health itself is known to be an indicator of substantial importance in an establishment which determines the profits margins of a company. Profit margins of a company depict the phenomenon where profits exceed the cost in a revenue generated by a business. However, financial health of a business is necessary for running a smooth and successful business which ensures its welfare both in terms of market status as well as higher returns at minimum costs. A recent study conducted in order to explore the key factors which tend to promote prosperous businesses stated that the business enterprises with a high rate of profit margins possess three common attributes.  They are:

  • They are insured for future concerns such as immediate emergencies.
  • They tend to appoint accounting experts for advice on financial leasing of all tools and machinery used in the office. 
  • They manage their transaction activities through a separate bank account and are efficient in budgeting.

The following tips are for entrepreneurs and management teams which can be implemented in order to achieve sound financial health of their businesses.

  • Efficient Budgeting

Budgeting refers to the art of allocating all funds and resources available in an office in order to generate higher profits. Budgeting is a key factor to financial health as it aids in the appropriate use of resources in order to conduct the operations of an office. This tends to provide a business certain limitations and requirements which are necessary in order to proceed with the working processes in an office. Several bookkeeping softwares are available to support the budgeting activities in a financial world. Bookkeeping is the concept of keeping all transactions records in order to avoid any misunderstandings and corruption. This maintains a healthy financial balance in a company. Several bookkeeping softwares such as QuickBooks are available in order to accurately measure and record the transactions taken place in a business which, in return, provides key suggestions for budgeting in future endeavors.

  • Quick Ratio

In order to determine an enterprise’s capacity to fulfill its short-term liabilities, quick ratio is used to determine the economic well-being of a company. A simple formula calculates the ratio of assets to a company’s liabilities. The formula states:

Quick Ratio = Current Asset and Inventories/Current Liabilities

The formula above illustrates the way to discover the quick ratio of a company to determine the cash flow which can be beneficial for repaying debts on time. This also ensures the economic and financial well-being of a company through depicting the marginal profits generated by it.

  • Current Ratio

Current ratio refers to the value in monetary terms which depicts the company’s financial stability in respect to its abilities to pay short-term and long-term debt or liabilities. The formula of current ratio is written as:

Current Ratio = Current Assets /Current Liabilities

This gives a quick view regarding the comparison of assets with that of liabilities. If the assets are more than the liabilities,  a company is  financially stable enough to repay short-term and long-term debts.

Conclusion

The financial health of a company is the indicator for its marginal profits. Marginal profits ensure the economic and financial well-being of a company where it can easily go for future investments as well as repaying debt.

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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.

 

 

Accounting Strategies - Complete Controller

Bookkeeping is an essential business procedure that should be executed appropriately by entrepreneurs. Keeping track of your assets gives you a synopsis of the whole process and profitability of the company. It aids you to regulate where your cash goes and gives you specifics for potential development and analysis for an increase in your investment return. You should have an appropriate method to gather, document, and evaluate financial information to help you estimate how your company is functioning. Successful corporations know what essential accounting strategies are. The financial health of your business affects your pronouncements. This makes it critical to have suitable bookkeeping and financial management for your company. Check out America's Best Bookkeepers

Unluckily, most small companies do not put enough prominence on their bookkeeping until something has gone wrong. The apprehension that your accounting has not been kept up-to-date happens a few days before taxes are due or, even worse, when you notice charges on your bank account for a check bouncing. You can save yourself all of the stress and last-minute apprising by producing an efficacious accounting strategy beforehand.

Accounting Stratagems for Small Businesses

Design your monthly budget prudently. As elementary and most crucial advice, planning your finances can help you save a lot of cash. Tracing your periodic budget is ideal for allotting your financial plan efficiently. Write down all chief specifics for your financial happenings. Once you have documented all of your expenditures, you can compare it with your income. Examine your budget and eradicate unnecessary financial costs that won’t gain you anything for the company. Check out America's Best Bookkeepers

  1. Organize your financial records: Ensure that you have separate bank accounts for your private money and business investments. Your salary should be deposited punctually to your business bank account. Never make personal transactions using your business account. Your assets should be detached to avoid misunderstandings and mishandling of finances.
  2. Consider employing a competent and specialized accountant: One of the best things a company can do is hire an experienced accountant to look over their financial happenings. Bookkeeping is a critical duty for companies. Calculating your money, tracking expenditures, and coming up with a financial plan can be done skillfully through accounting facilities. The triumph of your enterprise relies on operational accounting and precise financial managing tactics.
  3. Document all business cash flow: Track your records, manage cash flow, and have a detailed description of your business transactions. Documents are compulsory to help you recall all expenditures credited for the business. You should preserve all receipts and file forms appropriately. Make sure it is easy to find once you need an updated and financial analysis.
  4. Generate backup archives for your account records: Always backup your bookkeeping files. An unpredictable system crash, file mishandling, and other possible indemnities to your archives can occur. To elude losing all vital evidence of your accounting accounts, create backup records of your accounts. Always have at least 2-3 duplicates or more of your accounts and books. You can have those records stored in different hard drives. Likewise, it is idyllic to have a printed copy of your accounting records to help you trail and check all of your transactions effortlessly. Check out America's Best Bookkeepers
  5. Use the correct accounting tools: There are many accounting tools you can use for your financial accounts. It would be best if you had the accurate tools to manage your bookkeeping efficiently. Select billing and backup tools that are user-friendly.

All of these steps will add to your business success, but you must also factor in your specific industry’s requirements to keep your business afloat.

Final Note

Accounting for small companies does not have to be complicated. If you take the correct steps initially, such as conserving your records and reviewing your financial reports, it will be much easier for you to stay on the right path. It makes it simple for you to foresee future finances for your company.

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
Financial Health - Complete Controller

Bookkeeping, forecasting, and planning are not just for start-ups. If you do this in an ongoing business, you’re going to grow 30% faster, you’re going to be more prosperous, and your statistics will mean more. Being an entrepreneur requires a sense of self-confidence and firm faith in your idea so that you can have the nerve to capitalize on a dream of your own, as opposed to living someone else’s vision in a regular job. Check out America's Best Bookkeepers

The financial aspect of starting your own company, though, tops the list of elements that need to be considered very cautiously and require proper planning, bookkeeping, and monitoring. There are steps to guide you in better organization of your finances so that you can see your dream to its end without surrendering due to financial issues. Financial ratios are a useful and convenient tool for measuring a company’s performance and its financial position. There are many benefits to entrepreneurship. You get to be your boss, work in an industry you’re passionate about and acquire significant rewards if that business turns into a victory. Unfortunately, entrepreneurship often involves substantial financial risk, and without accurate planning, a failed business can also tank your finances.

Here are seven signs that your company is in good financial health and a few guidelines on how to set yourself up to survive the worst-case scenario of your business failing.

 

  1.    Your Income Is Growing

When viewing your profit-and-loss statement, you must be able to see a reasonably stable increase in your profits month after month, year after year. It doesn’t have to be an enormous spike in profitability, but even just an increase of a couple of percent shows an upward movement and a strong financial viewpoint. Check out America's Best Bookkeepers

  1.    Your Expenditures Are Remaining Flat

In concurrence with your income growing, you want your costs to stay uniform. If your business experiences a substantial growth spurt, then your costs may rise, but, in general, this upsurge should be in-line with your increase in revenue.

  1.    Your Cash Balance Exhibits Progressive Long-Term Growth

While you may be growing your revenue, if you’re taking that cash and simply financing it back into the business, you might find yourself asset rich and cash poor. A low or stagnant cash balance means your business is not maintainable. You want to keep a good quantity of money in the bank so that if anything emergent comes up, you don’t have to incur more debt to meet an unanticipated expense.

  1.    Your Debt Ratios Must Be Low

There are two debt ratios to pay particular attention to a business’s debt-to-asset ratio and debt-to-equity ratio. For debt-to-asset rates, maintaining a 2:1 ratio or lower is desirable. Check out America's Best Bookkeepers

  1.    Your Profitability Ratio Is on the Healthy Side

One of the best ratios to calculate is your profit margin. This calculation includes taking your annual net profits and dividing it by your yearly sales. So, while you may be making sales, your profit margin could still be low depending on your pricing structure, start-up costs, or other elements. Your profitability ratio is measured healthy when it’s on the high side.

  1.    You’re Functioning with New Clients and Repeat Customers

The charge to acquire new clients is higher than the cost to work with the same customers repeatedly. A stable stream of new clients and repeat customers exhibits that your business has multiple options for producing revenue. By having contact with new customers, you can help isolate your business from changing attitudes and buying patterns.

Final Note

Evaluating the health of your business’ finances can be as simple as reviewing a profit-and-loss statement or as complicated as analyzing all of the different elements of your business bookkeeping. There is very little doubt that fully understanding your business finances is a sure way to remain successful and profitable.

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