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One might be resulted in believe that profit may be the main objective in a small business but in reality it’s the income flowing in and out of a small business which keeps the doors open. The idea of profit is somewhat narrow and only talks about expenses and income at a certain point in time. Cashflow, however, is more powerful in the sense that it is concerned with the movement of profit and out of a small business. It is concerned with enough time at which the movement of the money takes place. Profits do not necessarily coincide with their associated funds inflows and outflows. The web result is that dollars receipts often lag cash repayments even though profits may be reported, the business may experience a short-term money shortage. For this reason, it is essential to forecast cash flows in addition to project likely revenue. In these terms, you should know how to convert your accrual income to your money flow profit. You should be able to maintain enough cash readily available to run the business, but not so much as to forfeit possible earnings from different uses.

Why accounting is needed

Help you to operate better as a business owner

Make timely decisions
Know when to employ a team of employees
Understand how to price your products
Know how to label your expense items
Allows you to determine whether to broaden or not
Supports operations projected costs
Stop Fraud and Theft
Control the largest problem is internal theft
Reconcile your books and inventory control of equipment
Raising Capital (allow you to explain financials to stakeholders)
Loans
Investors
What are the GUIDELINES in Accounting for SMALLER BUSINESSES to address your common ‘pain points’?
Hire or check with CPA or accountant
What is the simplest way and how often to get hold of
What experience do you have in my industry?
Identify what’s my break-even point?
Can the accountant measure the overall value of my business
Can you help me grow my organization with profit planning techniques
How will you help me to prepare for tax season
What are some special factors for my particular industry?

To succeed, your company must be profitable. All of your business objectives boil down to this one simple fact. But turning a profit is easier said than done. In order to boost your bottom line, you should know what’s going on financially at all times. You also have to be committed to tracking and understanding your KPIs.
Do you know the common Profitability Metrics to Monitor running a business — key performance indicators (KPI)

Whether you decide to hire an expert or do it yourself, there are some metrics that you should absolutely need to keep tabs on at all times:

Outstanding Accounts Payable: Exceptional accounts payable (A/P) shows the balance of cash you currently owe to your suppliers.
Average Cash Burn: Average dollars burn is the rate at which your business’ cash balance is certainly going down on average each month over a specified time frame. A negative burn is an effective sign because it indicates your organization is generating money and growing its cash reserves.
Cash Runaway: If your business is operating baffled, cash runway helps you estimate how many months you can continue before your business exhausts its cash reserves. Similar to your cash burn, a negative runway is a good sign that your business keeps growing its cash reserves.
Gross Margin: Gross margin is a percentage that demonstrates the full total revenue of your business after subtracting the costs associated with creating and selling your company’ products. This is a helpful metric to recognize how your revenue compares to your costs, enabling you to make changes accordingly.
Customer Acquisition Cost: By knowing how much you spend typically to acquire a new customer, you can tell exactly how many customers it is advisable to generate a profit.
Customer Lifetime Value: You should know your LTV to be able to predict your own future revenues and estimate the total number of customers you should grow your profits.
Break-Even Point:Just how much do I have to generate in product sales for my company to make a profit?Knowing this number will highlight what you should do to turn a revenue (e.g., acquire more consumers, increase costs, or lower operating expenses).
Net Profit: It is the single most important number you have to know for your business to become a financial success. In the event that you aren’t making a profit, your organization isn’t going to survive for long.
Total revenues comparison with last year/last month. By monitoring and comparing your total revenues over time, you’ll be able to make sound business decisions and set better financial goals.
Average revenue per employee. It is critical to know this number to enable you to set realistic productivity goals and recognize ways to streamline your business operations.
The following checklist lays out a suggested timeline to take care of the accounting functions that may retain you attuned to the procedures of your business and streamline your tax preparation. The precision and timeliness of the figures entered will affect the main element performance indicators that drive enterprise decisions that need to be made, on a daily, monthly and annual schedule towards profits.
Daily Accounting Tasks

Review your daily Cash flow position and that means you don’t ‘grow broke’.
Since cash may be the fuel for your business, you never want to be running near empty. Start your day by checking how much cash you have on hand.
Weekly Accounting Tasks

2. Record Transactions

Record each transaction (billing buyers, receiving cash from consumers, paying vendors, etc.) in the correct account daily or weekly, based on volume. Although recording transactions manually or in Excel bed sheets is acceptable, it is probably easier to use accounting application like QuickBooks. The benefits and control far outweigh the cost.

3. Pricing for CFO Consulting Services and File Receipts

Keep copies of all invoices sent, all money receipts (cash, check and charge card deposits) and all cash repayments (cash, check, charge card statements, etc.).

Start a vendors data file, sorted alphabetically, (Sears under “S”, CVS under “C,”and many others.) for easy access. Develop a payroll record sorted by payroll time and a bank statement data file sorted by month. A standard habit is to toss all paper receipts into a box and try to decipher them at tax moment, but unless you have a small volume of transactions, it’s better to have separate data files for assorted receipts kept organized as they come in. Many accounting software systems enable you to scan paper receipts and avoid physical files altogether

4. Review Unpaid Bills from Vendors

Every business should have an “unpaid vendors” folder. Keep an archive of each of your vendors which includes billing dates, amounts credited and payment deadline. If vendors offer discounts for early payment, you really should take advantage of that if you have the cash available.

5. Pay Vendors, Sign Checks

Track your accounts payable and have funds earmarked to pay your suppliers on time in order to avoid any late fees and keep maintaining favorable relationships with them. When you are able to extend due dates to net 60 or net 90, the better. Whether you make payments on the net or drop a sign in the mail, keep copies of invoices directed and received using accounting software program.