Wednesday, November 18, 2009

What can good accounting do for your small business?

What is accounting really? Techniques or a language that allows you to keep track of the money coming in and going out of a business. Many people are uncomfortable with accounting because they are unfamiliar with the terminology. I can’t tell you how many times I tried to explain to friends struggling with an accounting class in college how assets could be debits, liabilities-credits while income was a credit and expenses were debits. They always thought assets and income should act the same way. I tried to get into the theory behind double entry accounting and how the balance sheet and income statement flow through each other, but some people just got bogged down with the terms.

The nice thing about the invention of accounting software programs is that the terminology has really become a non-issue. With QuickBooks or other programs, the user is filling out forms or writing checks and the program “writes” the entries for you so you don’t need to know whether you are debiting cash or crediting sales. Once you let your discomfort over the terminology go, you can focus on learning how to use the program. Modern software has nice features built in that require you to enter data such as customer names and addresses only once and then each time you invoice that customer, all that information is automatically entered into the form. Even better, once you’ve learned how to use your accounting software, you can really reap the benefits of good accounting by learning how to use the many reports the programs can generate.

The whole point to establishing a good accounting system is to provide you, the owner, with the information you need to run your business. The less time you spend on the bookkeeping portion of the accounting process, the more time you will have for the analysis portion. It is the analysis that will point out the questions your business is asking you. While modern accounting programs can’t answer the questions, but they can point you in the right direction and give you the information you need to find the answers.

A successful small business owner learns how to make the most from her accounting process by selecting the right program, learning how to use the software, learning how to read the financial statements and using all the great information to make the decisions needed to keep her business moving forward.

Monday, November 9, 2009

Stay Sane While Running Your Small Business

What do you need to keep sane while running your small business? Organization, routines, structures, priorities, and most important, a guiding mission. The key to getting all the work done in an efficient and effective manner is to set up the structure, steps and routines to keep you and your employees on track.

The key to making the process work is to become aware of your own personality and style. Organization techniques that work for your neighbor may not work for you because you each approach work and life in a different way. Some people are visual and need lists and reminders visible to keep them on track.

Once you figure out the ideal organizational structure for you and your employees consider all the tasks you need to accomplish in your business. Write them all down, no matter how small or insignificant they may seem. A little intimidating, isn’t it? Now you need to prioritize the tasks and figure out a timeline for each one. Some things will need to be done daily, others once a month and so on. You need to have prioritized first so if you run out of time at the end of a day, you’ll sleep at night knowing the most important jobs were completed.

How can you get all these tasks done and still have time for a personal life? Delegate where you can. Entrepreneurs are often unable to let others take charge. You can’t do it all so train your people well and let them work. Job descriptions and procedure manuals can help you insure that the works is done the way you need it to be. Try to be open to other ideas and other ways to get a job done. Your employee may have a great idea so hear him out. Make sure everyone understands why they are performing a task in a certain way. People are much more likely to remember how to do a job and to do it well if they understand why it is important and what the ultimate goal.

Don’t underestimate the importance of having a mission statement for your business and using it as you establish a structure, routine and processes for yourself and your employees. Creating a solid organization structure with good procedures, effective routines, clear priorities and a well defined mission will keep your business running smoothly and make the work environment more fun for everybody.