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Closeup portrait of shocked middle-aged business man staring at camera through glasses. Shock concept. Isolated front view on white background.
Employee fraud and theft is certainly a big concern for small businesses. Most owners don’t realize the impact a fraud could bring to their business and don’t believe it until they face the curse themselves. Small businesses have every reason to worry about fraudulent activities in their company. It can hamper and disrupt their working capital and, most importantly, their cash flow. Undoubtedly, small businesses are more vulnerable to employee fraud, theft, stealing, larceny, robbery, embezzlement – whatever you name it – because of ill-defined practices and processes and lack of business control. This indicates that lack of accounting knowledge and wisdom coupled with a lack of business management skills may land you in a real trouble.

Employee Theft and Fraud Can Lead to Lethal Repercussions—Are you Protected?

There is certainly no denying the fact that employee fraud can devastate your business. No matter how successful your entrepreneurial venture may be, a slight miscalculation in finances or wrongful business projections can devastatingly hurt your business. According to studies, US-based businesses suffer a staggering $150 billion dollar loss in fraudulent employee activities every year, out of which, 83% theft happens to be in small businesses.

Another trend that has been identified by the ACFE (Association of Certified Fraud Examiners) is that small businesses with fewer than 100 employees are more vulnerable to employee fraud which can even kick the business out of the competitive race. Why? Because of two core reasons; a greater degree of misplaced trust and a lack of basic accounting controls. If small business owners expect to stay competitive, they need to come up with effective and implementable loss prevention strategies in order to get their business going in full swing. Often times, those who steal from you are typically suspected least in the company because of their well established trust and faith.

What Should You Watch For?

In today’s era, catching culprits does not have to be that hard. Now, we have superior technology and practices that can help us prevent organizational losses and discourage fraudulent activities such as employee fraud. Blind trust can lead you to a complete failure or utter disaster. You need to track and monitor daily business operations and activities, especially the influx or outflow of cash flow yourself in order to keep things going in the right direction. The fear of losing cash and assets can cause anxiety and mental stress, which can be troubling for your health and your business.

Any significant behavioral changes in employee attitude, working abilities, or spending habits can be warning signs of chances of some kind of employee fraud. Sometimes, financial stress and pressure at home can also lead an employee to commit theft or fraud. Moreover, your employees living beyond their financial means can also raise suspicion, which needs to be investigated. Pure blind trust is a story of the past. Now, no matter how much trust you may have in your employees, you need to ensure that they are not stealing from you or committing fraud.

Ways to Protect Your Organization from Employee Fraud

Creating a written fraud or theft policy can help prevent employee fraud. This way, employees will know what fraud means to the company and what the repercussions will be if someone from the company is involved in any fraudulent behavior or activity. To set a precedent, you need to establish a code of conduct with a zero-tolerance policy in order to discourage such illegal activities.

You must have bookkeeping and accounting control so that you can make better business assumptions and decisions. If you have hired internal and external tasks of the business, you need to conduct an audit on a regular basis to know the actual financial conditions of your business.


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.

businessman ready to run and 2018 new year concept
The first question often asked by someone venturing into a new business is…How are the margins in this particular industry? While sales growth is something everyone desires, if it’s not profitable, it is going to cost you a lot more than you think. Before proceeding with a new business plan, entrepreneurs must consider the market size, degree of competition, and average profit margins. Business owners can enhance their profitability above the industry average depending on the skills and optimum resource utilization. Similarly, there are always some benchmarks that can help you make informed decisions about your potential business venture.

 

Most Profitable Small Business Sectors Moving into 2018

Accounting and Tax Services

Accounting and tax services remain as a front-runner with the highest profit margins. These businesses are hired for bookkeeping by many entrepreneurial ventures as they are better off outsourcing the accounting services rather than handling it internally. In many cases, it saves them hefty costs and also results in efficient handling of all of their financial matters. The profit margin for accounting services stands well above 18%, which is highest among other small businesses because of their steady demand, even in harsh economic conditions.

Private Holding Companies

Exclude some of the biggest players among holding companies such as Berkshire Hathaway and still the industry has a profit margin of above 15%. Holding companies own investments like stocks and mutual funds. Some of their other holdings include art pieces, real estate or anything that holds an intrinsic value. It is quite a lucrative business, however, you need specialized knowledge about the functionality of stock markets and how to keep it profitable in order to succeed.

Real Estate Brokerage

The real estate industry has recovered dramatically from recessions and is now among the top businesses in terms of net profit margins. The advantage you have with running a brokerage firm is their low operating costs. This allows you to reallocate the budget to marketing and other functions, which will ultimately reflect in your business growth.

All you need is a brokerage license and you are set to go. However, the industry is quite competitive and you need to do your homework before stepping in. Moreover, it has a direct relation to the state of the economy. A favorable environment will boost the profitability of businesses and vice versa.  

Lawyers and Legal Services

Lawyers are some of the most prestigious members of our society and it is also not surprising that legal services offer a profit margin of 14.2%. High legal fees and low operating cost is a perfect remedy for profitable small businesses. Being a successful attorney requires great communication skills that lead to strong connections with community members. Most clients come from your connections, however, you must allocate marketing budgets as well because you can’t be everywhere.

Dental services

A dental clinic is a great business for doctors who may not want an extremely stressful job in the medical field but aspire to earn good money. However, high start-up costs are a bit of hindrance as the equipment is quite expensive. If you can somehow raise the money through a loan or any other means, the net profit margin is quite lucrative. There are a high number of returning patients in dental clinics, which really helps in maintaining the profitability.  Let’s be honest, we all have teeth that need to be cleaned.

Land and Real Estate Rentals

All types of commercial, industrial and real estate rentals are profitable businesses. High customer influx commercial properties generate outrageous profit margins and, even if the location is not so ideal, the profit margin is steady. The only issue can be the high cost of acquiring the land or construction costs. The average profit margin of the industry is 13.8 percent, which is quite reasonable for a fixed asset.

General Physicians and Healthcare Services

Just like other health consultants, attorneys, and dental services, physicians rely on repeat business. They incur significantly lower overhead costs, therefore, enhancing their profitability. Other profitable small businesses include healthcare services. There have been speculations about some malpractices by healthcare industries as they are linked to significant overcharging in order to offset insurance services, however, the demand for healthcare is still on the rise and businesses are booming.

Auto Renting and Leasing

The auto renting and leasing industry is still among the most rewarding businesses. While auto dealers seem to struggle, the renting and leasing business is booming as more people are preferring cheap means of mobility. The initial investment for a rental can be significantly high, however, the running costs are comparatively lower, provided you have the necessary experience. It is one of the most profitable small businesses and must be on your list, if you are considering to start an entrepreneurial venture.

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.

 

 

 

 

 

 

consensus of shareholders, expert advice concept in business, collective opinion
Anyone who is pretentious to the actions of a business is a stakeholder for the company. Stakeholders are elements that are necessary for the existence of any business and, without whom, it would not survive. In this age of challenging social context, managing stakeholder relationships holds a lot more value than before. The stakeholders have an influence on your business and debauched relations could lead to project delays and terminations, draining resources and political interference.

Efficacious recognition, collaboration and concern for your stakeholders will foster your business’ ability to reduce risk and deliver a fruitful project. Here are some tips to help you stay on good terms with your employees, customers, creditors, suppliers, investors, and the community.

Managing Stakeholder Relationships

Stakeholder Mapping

Before you start off with anything else, you need to identify your stakeholders, from your employees to the customers and everyone in between that is in some way connected to you. Some of them are more influential than others and your priority should be to identify them.

As much as external stakeholders are critical, internal stakeholders such as employees, suppliers, and shareholders will help you in determining if you have adequate resources to keep up with the desires and demand for your business. Mapping out the key stakeholders, whether internal or external, determines the amount of leverage you can execute while dealing with them.

Prioritizing Relationships

In an ideal scenario, a business is able to cultivate positive relations with all stakeholders, however, in reality, there is never enough time and resources to commit to everybody, making it critical for you to prioritize. Those who have the same interests as yours and have similar goals and objectives can be prioritized and be a part of your success. Two of the most reliable factors to measure a stakeholder’s value for your business is their ‘ability to influence’ and ‘willingness to engage’ in your success.

There are different models and frameworks that have been developed by researchers to guide you in prioritizing your key stakeholders. Referring to them solves most of your concerns related to managing stakeholder relationships.

Document what you Learn

When you indulge in business with the stakeholders, there are many things that you learn. Their preferences, aims, and interests in relation to your organization are evident from the way they deal with you. Document their views, needs, and insights so that you can refer to them later. You can do it in the form of a personal diary or a computer file, depending on your preference. The key is to understand them so that you can initiate ways to strengthen the bond by aligning goals.

You can also share your insights with them as they are likely to perceive them in a positive way. It shows them the concern you have for their business and that you took time out for them. Managing stakeholder relationships requires a wholehearted effort for the cause.

Monitor and Refine

All of your earlier activities have been to identify your key stakeholders, what is important to them and how can you work collaboratively to fulfill individual goals. Initially, your strategy is more focused on your internal strengths as you are assured of them but eventually, you will get useful insights about the capabilities of your partners that can help you both prosper. However, the results of this collaboration depend on the amount of research and preparation you have put in to execute a specific strategy.

Learning about what works for you and what doesn’t, who can be leveraged to inspire other stakeholders is critical before you draw upon a strategy. Researchers believe that inordinate insights come from connections, curiosity, and coincidence. Managing stakeholder relationships needs you to stay connected with your important stakeholders and be curious enough to notice the coincidences. If you are not interested, something right in front of you would go unnoticed, resulting in unsatisfactory consequences.

With time, your relationship with the stakeholders gets so strong that you do not have to strategize from scratch and all you need to do is just refine your existing strategy. But, unless you get to that point, you have to monitor every move of your stakeholders.

Proactive Mitigation – Managing stakeholder relationships

After a firm grasp of your stakeholders and how they can influence you as a business, the next step should be to create a mitigation plan. All the risks that concern the involved parties are accepted, shared and avoided together. You must identify your limitations early and set a clear picture of things that are negotiable and those that are not. Working in such circumstances builds trust between the stakeholders as they can rely on each other through thick and thin.

Conclusion

Your aim for managing stakeholder relationships should be to create a win-win situation for all parties and will build a solid credibility to base future relations upon.

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.

 

 

 

 

 

 

 

 

Businessman being depressed by accounting in his office
Accounting and bookkeeping are the key functions in any business. Accounting is the systemic and comprehensive recording of financial operations in a business. Business bookkeeping is the recording of financial transactions as a part of the accounting process.

Entrepreneurs/owners often do not realize that common small business accounting problems are a major threat to the growth of their business in the long run.

5 Common Small Business Accounting Problems Killing Small Businesses

 

YOU DO NOT USE AN ACCOUNTING SOFTWARE

Manual work is always the hardest and is at major risk of errors. A small accounting error can lead to big losses in the business. An accounting software according to your business size is as important as funding your business. Small business owners can also get a specific software to meet their needs depending on company specifics.

Working on a spreadsheet is not as productive as working on an accounting software.

An important and challenging step in business is to choose the proper software per your business needs. Consider its cost, usability and extra features for choosing a suitable software for your small business.

Features of an accounting software must include

  • Inventory management
  • Sales tracking
  • Contacts management and contact history tracking
  • Account to accept credit card payments
  • Generating Invoices
  • Financial statements, cash flow statements and balance sheet
  • Budget planning
  • Payrolls
  • Taxation matters

FINANCIALS ARE NOT PRODUCED MONTHLY

In a small business, it is often thought appropriate to produce financials on a quarterly or bi-annually basis. However, monthly financials show investors you are closely monitoring your business.

It can lead to a negative balance if expenses are incurred but the income statement is not updated. Invoices that need to be paid may go unnoticed and it can lead to a bad reputation for the company. It can end terms with the suppliers. Business growth could even be halted or significantly reduced.

Not producing financial statements on a  monthly basis is a common problem that small businesses encounter.

FINANCIALS ARE INCORRECT

Incorrect financials is a threatening small business accounting problem in your business. If your financials are incorrect, it may sink your funding round in your business.

Any error in financial statements leads to big losses. Business bookkeeping and other business operations will be a disaster if you do not keep your financial data up to date. Your accounting statements must be clear and transparent. Income and expense statements must be clear and related to cash flow and balance sheets. Also, delayed data entry can be a big risk for frauds.

BUSINESS OWNERS MIX THIER PERSONAL FINANCES WITH BUSINESS ACCOUNTS

Business owners often mix their personal finances with business expenses. Keeping these two finances separate is of utmost importance. If these two finances (personal and business) are not segregated then what was intended for business vs personal matters will be intertwined, leading to problems. The profit that was generated out of invested capital cannot be estimated correctly.

Often, a business credit card is utilized for personal expenses. Later on, this amount will be paid from the company’s income.

During purchase orders for inventory of the company, purchases are also made for personal or private use.

Covering small business expense out of pocket without recording it happens often as it can be easier.  However, if it is not on the bookkeeping record, the income of your company could appear larger than it actually is. 

 

PAYROLL ISSUES

Small business owners must organize their payroll section or their company could go into debt with increasing interest.  You can enlist the help of payroll companies to avoid errors. 

Conclusion

Small business accounting problems start with infrequent bookkeeping and accounting functions. This will not give a true picture of the business and leads to the inability to make wise decisions for the company. Failure to use an accounting software may lead to manual errors that are unintentional. When running into accounting problems, small business owners may have to get loans to pay for timely expenses such as paying for the salaries of their employees. If small business owners focus on these small business accounting problems, their businesses can be stable and experience exponential growth.

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.

 

 

 

 

Portrait of happy young barista standing near table while having job in confectionary shop. Job concept
Small businesses are the backbone of every country. They produce jobs, come up with new ways of doing old things, and help keep money in the local community. Without small businesses, we’d be in a bigger economic mess. There’s misperception between the terms Small-Business Owner and Entrepreneur. Both can have small businesses, but they have different styles of leadership and thoughts on running their industry. One is not better than the other, they’re just different. Entrepreneurs take much bigger risks than business owners. Entrepreneurs and business owners have a different relationship with their companies.  Entrepreneurs view their companies as assets…something to be established shaped and readied for market.

Small Scale Business Owner

The proprietor of a small-scale business organizes corporate processes and incurs the risks of running an operation based on the prospect to make a company profitable, similar to what the SBA states an entrepreneur does. The SBA offers the same services to small-scale business owners who qualify for financing. In fact, by virtue of the agency’s name, its job is to assist small business owners in accomplishing their goals. Though, small business owners could be viewed as owner-operators, meaning they focus on sales rather than business development, they’re apprehensive more about functional steps instead of strategic growth.

1.  About 50% of small businesses fail in the first four years.

2.  76% of small business proprietors report facing marketing challenges. The growth of online marketing has increased the intricacy small business owners have to face when advertising their companies.

3.  Private companies continue to be the life blood of every economy.

4.  For a business with less than 5,000 employees, the average employee base is 13 people.

5. Small business owners are getting older. 51% of small business owners are over 50 years old, while only 16% are under 35.

6.  For employees, there are often very tangible benefits of moving to a larger industry. Employees at businesses with over 100 employees make 31% more than employees at sub 100 businesses, on average.

7.  The convolution of financial accounts has changed the way we operate. More than 50% of small businesses now have a CFO or controller managing their accounts.

8.  In 2014, the IRS evaluated $2.1 billion in civil penalties against business income tax filers.

9.  Of the 1.09 million penalties assessed by the IRS, 47% were for delinquent payments while less than 0.5% was for impreciseness.

10.  Only four out of every ten new entrepreneurs are women. This is a gap that has widened slightly since 1996.


How Small Business Owners differ from others

1. Small-business owners have a great idea: They resolve a problem in their community. They know their business and target spectators. They know what will make their clients happy. They serve their customers.

2. Small-business owners hold steady: They like to know what’s coming next and where it’s coming from. They make calculated verdicts based on bookkeeping where the outcome is clear. The result may not be huge, but it will usually keep them moving forward.

3. Small-business owners think about the things they need to finish this week: They have daily and weekly to-do lists. They manage work forces, work with customers, network with new customers, and keep everything rocking and rolling.

4. Small-businesses owners are emotional with their businesses: They never plan on selling or handing their business off to someone else, unless it’s family. They like making the decisions and running the day-to-day decisions and tasks. 

Final Note

To the entrepreneurial novice, being an entrepreneur or a small business owner is interchangeable.  But, they are not the same.  Sure, they are both self-employed, and need to make money (regardless of how they spend it). Almost each and every country needs small-business owners to hold the economy and entrepreneurs to propel it forward.

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.

 

Red help button isolated on white background
Guided help in an accounting software assists users through a real job by:

  • Highlighting of controls
  • Step by step instructions
  • Additional help boxes can be opened
  • Error grasping

There are tour guides and help boxes built into accounting software. When an accounting software is specifically designed for small business owners, it is built with an aim of simplicity. New users can also operate accounting software with an ease. The software is made more accessibly simple by built-in help boxes. Small business owners can use the small business accounting and bookkeeping software themselves.

Small business accounting requires some standard procedures in accounting and bookkeeping. A small business accounting software must have the following controls built into the software:

  • Income and Expense
  • Financial statements
  • Cash flow statements
  • Balance sheets
  • Fixed assets
  • Budgeting
  • Payroll
  • Taxation matters
  • Inventory management
  • Sales management
  • Customer management

Special guided help boxes in small business accounting software

Guided help boxes in small business accounting make the work easier and less time-consuming.

Guided help box to avoid error in entries

There are special features to eradicate typographic errors when accounting and bookkeeping in small business.

Now, the basic accounting software also comes with some special built-in features. If there is any difference in financial statements, the software will highlight the error. Small dialogue boxes are opened to guide where the error can exist. If one is not able to understand then they can access help boxes built into the software. You can get instructions using that ‘help’ feature. If the balance sheet does not match with cash flow statements or financial statements, a guide box opens to recheck entries. Such features reduce the chance of typographic errors.

Inventory management

If the business product is going out of stock, a special help box will keep giving you reminders until you get a fresh stock and enter the data into the software.

In some software, the near ending stock will be highlighted to inform users to plan for their next purchase.

Expiry management

When you are doing a business of finished products or raw materials, everything has an expiration date. A standard rule is to follow the principle of ‘first in, first out’.

But accounting software also collects expiration dates and give intimation of soon to be expired batches.

Help in budget making

When making a budget using small business accounting software, the built-in features will help throughout the budgeting process. If expected expenses are exceeding the percentage reserved for special operations, it will be highlighted. A help box can guide you to manage expenses and income, according to the budget percentage. If the income is low and expenses are high, the guided help will lead you to make expenses accordingly. 

Taxation matters

Guided help boxes in small business accounting and bookkeeping also aid in tax matters. Income tax statements can be prepared. Value added tax can be deducted. A final picture of your taxation matter is made transparent using helpful features of accounting software.

Last date intimations

Using a software aids you in remembering last dates to pay taxes and make other payments. Small window boxes act as reminders or highlighted controls will be present in an accounting software to aid in the process of making payments and paying other liabilities.

Expense management

If the current expenses are going higher than expected in any kind of business operation, the guided help boxes will lead you to the point where you can actually check the exceeding expense record.

Web-based accounting

The above features are provided in software for small business accounting and bookkeeping. The same features and guided help boxes are also available in cloud-based accounting systems. Accounting can be done online and the same help and guided boxes are provided by the cloud-based accounting systems. You can access your accounting data from anywhere in the world.

CONCLUSION

Guided help boxes act as a useful guide for performing basic accounting functions by the users. In small business accounting software, these help boxes assist new users to perform accounting and bookkeeping tasks themselves. Accounting and bookkeeping are made easy and less time-consuming. 

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.

 

 

 

 

 

Modern smart mobile phone with on line shopping store graphic and open sign on wooden table over blur light and shadow of mall
The term “uberization” is derived from the company Uber – the taxi company which introduced this business model. Uber is a transport service which you avail by booking a ride from your smartphone whenever and wherever you need it. Uberization is a business model where supplier and customer communicate directly via mobile technology, website or software and agree upon the services offered by a supplier, customer requirements, and payment terms and conditions.

Technology has changed the labor world a lot. Now you don’t need to go to the market in search of a service or a product. Many services and products are easily accessible on your laptops and mobile phones. While sitting cozy on your couch, you can now hire a freelancer for your new project. A third of Americans provide freelance services and, incidentally, there is a huge supply of freelancing service. The idea of Uber is favorable for both the client and workers. The small business economy can especially drive growth by uberizing.

Uberization is based on the following characteristics:

  • Use of digital platforms for peer to peer transactions.
  • Decrease the distance between customer and service provider.
  • Assessment of the quality of the product or service by using a rating system.

Examples:

eBay, TaskRabbit, Uber, Airbnb are a few examples of growing uberizing. 

Here are a few examples of how uberizing can be beneficial for small businesses.

Targeting potential customers:

Online navigation tracking is utilized to find out the potential customers searching for a specific product. The online retailers monitor these customers and provide them complementary products or services along with cost comparisons. The websites have a detailed description of the product, it’s availability, customer satisfaction, expected delivery date, and tracking details of the order. A survey shows that during Christmas, 50% of the customers buy a different product than the one they intended to purchase. The reason behind this was online searching for that product by those 50% customers. Online retailers attracted and diverted those customers to buy their products by providing them details within minutes.

The customer can use the best choice:

Buying a product online has a number of advantages. Customers have more choices and the freedom to compare various brands at a time, with no pressure from a retailer to buy their product. Customers compare products and hold off on ordering until satisfied. Online purchasing or uberization is now one of the preferred services availed by customers. The ease of purchase and time saved are the critical benefits of uberization which are driving small businesses toward growth.

Flexible, fast, and smooth service:

Uberization is growing business because it listens to the heart of the customer. The customer expects that all information regarding products or services should be available. All questions should be answered such as the expected delivery time, location, and refunding charges. Satisfied reviews are the most forceful attention driving services provided to the customers.

Control of purchases:

Customers can control the time, date, and location that the product is to be delivered so they find it more convenient to utilize online services.

Saves time:

For small business growth, uberization is time-saving. Building a concrete office, hiring a workforce, and marketing the product is quite a long process. If you develop a virtual online store or service room, all three are done in one go. Time is also saved and ultimate growth is ensured.

Growing technologies:

With time, technology has replaced many things in our daily routines. PC desktops, watches ,cameras, calculators, and  stop watches are all things of the past. Due to the evolution of technology during the last few years, all of this information is available on your smartphone. Excessive use of smartphones has forced small business owners to uberize their products and services. According to a survey, an individual checks their smartphone forty-six times a day. Providing ways to purchase products on a smartphone is a significant step towards the rapid growth of businesses.

Conclusion:

In the recent advancement of smartphone technology, uberizing a small business economy is the most–wanted step towards the rapid growth of all kinds of businesses.

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.

Finance and economy concept. Credit card,money with business city background.
Personal banking refers to the banking services available to individual customers. Personal banking is through local branches of banks. Banking services for personal banking vary widely. Opening different types of bank accounts, credit card facilities for individual customers, mortgages, personal loans, lines of credit, purchasing cars on interest and insurances are offered.

There are many other services that are provided along with personal banking services. For example, ATM services, online banking services, money/credit transfer to other bank accounts by the way of funds transfer, utility bill payments, phone banking, 24-hour services of ATM machines to withdraw cash, retirement planning services, insurance services, financial advising and many other services are provided by banks. In today’s world, a few personal banking services are also provided by other financial institutes like insurance companies also give loans, mortgages and retirement plans.

Small businesses indicate private companies, business partners, and single proprietorships. There are fewer employees in small businesses. Annual revenue is also less than a medium sized/regular sized businesses.

How Small-Business and Personal Banking are mingled

When an entrepreneur/financier mixes his personal account with a business account, many adverse things may happen. Business bookkeeping will also become mingled with personal banking.

Entrepreneurs have to face so many challenges and decisions on how to set up a small business, how to run business operations and how to manage finances. They have to decide the best suitable location to start their small business to generate enough income and annual revenue. If a person wants to open a bakery, they will choose a place where customers can access it easily and many other things are focused on choosing a location. While making these decisions, the entrepreneur often uses his own personal account for investing money into the business as investment capital. Using their own personal account creates a sticky business situation. This is because the entrepreneur’s personal account will also be mingled with other bookkeeping and accounting components of the business. This is how personal banking mingles with small-business bookkeeping and accounting. From the  entrepreneur’s point of view, it seems easy to use their personal bank account to fund finances for their business. Small business owners are usually inexperienced to start and do not know the adverse effects this mingling of personal banking and small business can do to them and to their business. 

Entrepreneurs do not realize the long-term consequences of mingling personal banking and small business bookkeeping. They think it is better to save time for paperwork and going to banks for opening new accounts. They think they have to invest a small capital to start a small business and it can be easily done with their personal account. That’s why many use their personal checking bank account for their business. This mistake is mostly made by the beginners in business who want to invest their hard earned money into a business to generate profits.

Adverse effects of mingling Small-Business and Personal Banking

  • Small business owners who mix personal banking with business operations often do not properly keep a check and balance on accounting statements. They do not interpret cash flow statements and financial statements with the balance sheets in a productive way.
  • Business bank accounts are very useful for the business owners. In a time of need, they can get immediate loans and financial services. Credit card and debit card payments are made easily along with cash and check services. Customers use these facilities and come back to the same business when they are made convenient.
  • If the income generated is separately given to individual salary accounts of the small business owner then there is less percent of tax charged. Tax deductions can be made accurate. But if the personal banking account is mingled with the business account, then tax will be charged at a higher percentage.
  • Tax is paid on time through business accounts. Cash flow statements must only refer to business operations, not personal banking. Thus bookkeeping functions are made easier.
  • An audit is for business accounting but, when both accounts (personal and business accounts) are intertwined, the income and expenses are misreported. This affects the audit process as well.
  • If a personal credit card is used for any of the business operations then a log of all records of business operations must be kept. This is a difficult and time-consuming task to do. It should be error free as well. Mingling personal banking and business bookkeeping makes it difficult to track the records.
  • As the business grows, financial needs will increase and it will eventually need a separate business account. A separate business account gives a clear picture of business functions and the credit history of the business will be clear.

Conclusion

A separate business account prevents mishaps in the interpretation of accounting statements. It increases the credibility of the business. When the business grows from a small investment, eventually a separate account will be a requirement.

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Not only am I a successful start-up entrepreneur, my expertise lies in the area of helping small businesses across the nation to succeed in their business endeavors by keeping an eye on their financial performance from the top line to the bottom line.

Young entrepreneurs may be tempted to use their own credit to cover expenses when starting a business. You need to be very careful and understand the risk involved in that decision! Most businesses are not successful, and especially your first few ventures will have a low possibility of long term success. But the impact on your credit will stay with you for a very long time. Keep your credit for the business you start that outlasts the initial ‘proof of concept’ stage and is at least producing revenue. Until then, bootstrap it or find like-minded people to invest in you.

Don’t buy a bunch of inventory. Inventory intensive businesses carry a lot of risk. You have to spend to purchase the inventory, the less you order the more it costs per unit, and you have to consider the cost of lost opportunities because your precious capital is sitting around in the form of inventory gathering dust. Even though your margins may be lower, it is recommended that you produce as ordered or limit your inventory purchases to current orders on hand plus 100%. That way, at a 100% markup, if you never get another order, you won’t be out-of-pocket once you sell that inventory – unless it never sells and you have to discount it or give it to charity.

Reinvest in your business. A start-up business is like a baby; you have to feed it, nurture it, stay up all night, give it your all and you hope it grows up and takes very good care of you. If you take all of your profits and spend them on fancy things, you run the risk of starving the baby! Protect your capital and spend it in ways that will generate more capital. Use your entrepreneurial negotiating skills to convince your producers to lower their prices to you in anticipation of your future growth. Don’t hire staff members that cannot help you generate more revenue or save on costs. Don’t rent an office unless you absolutely must – keep it virtual. Rely on associate relationships and interns to do your evangelizing. Use free or low cost platforms for website, CRM, social media, and other tech and marketing needs. The rule of thumb is – don’t spend money unless it will make you money.

Keep an eye on the numbers. When you first start a business it is difficult to predict what your revenue and costs will be, but it is still important to make a forecast and cross reference your budgeted numbers with actual performance. Don’t fib to yourself about the potential, create forecasting that is reasonable and achievable so you can use it for goal setting. As soon as you have reached a revenue phase, you should begin measuring critical KPIs (key performance indicators) so you can learn the percentages and flow that represent your businesses cycle. A few important things to know about your business are: margins, cost of client acquisition, attrition rate, debt to income ratio, revenue growth rate month over month, and monthly overhead total.

The entrepreneurial spirit is one of persistence and confidence. Stay true to the vision and carry it out. If the vision is getting blurry, stop and recalibrate. Decisions made out of desperation lack good judgement. If you can’t get to proof of concept, scratch it. Your experience will serve you in a later endeavor. Be smart, listen to your instincts, and know when to fold.

Success is right around the corner!

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We work with businesses at all stages of development and I believe that small and new businesses make the mistake of not understanding the importance of establishing a brand early on. A brand is the symbol that represents all of the hard work and goodwill that a business invests time and money in creating every day. Small business owners should be careful to obtain a trademark for their brand name and logo so no one can trade on their goodwill and, if they do, they can be stopped.

Part of branding is ensuring that the website, brochures, business cards, leave behinds, web advertisements, promotional materials, etc. all represent the same name, logo, color scheme, and messaging. Consistent messaging and branding makes potential clients see you as reliable and dependable. You will look like you have been around for a while and you aren’t going anywhere – and that’s the type of enterprise people feel comfortable doing business with. Our brand has been a consistent part of our marketing from the start and here we are,  nearly a decade into our company’s journey and most of our industry colleagues can easily recognize us by our checkbox alone!

When considering your brand messaging, think also about the tone you use when communicating with your customer base. Are you witty and dry? Do you make the experience humorous or light spirited? Or do you prefer to represent your brand as serious and professional? Do you use a mascot or logo to reflect that tone?