Salt Lake City Bookkeeping Blog

Have you ever wondered how a small business bookkeeper handles the bookkeeping for their own business? Think about it, if you are using an outsourced bookkeeping service they have to handle their own business bookkeeping.

Ask them what they do for their own bookkeeping that you currently are not doing. Here are the key things I do with our own small business bookkeeping.

You have two choices when it comes to turning a bigger profit: increase your revenue, or cut your expenses. As a rule, we have far more control over how much we spend than we do over how much we earn. Which is why the most successful small business owners utilize dozens of practical methods for cutting costs and lowering their overhead. Here are three strategic money saving suggestions we think are well worth exploring.

From yoga studios to hospitality services, many small businesses rely on multiple income streams to support their revenue goals. If your business activity lends itself to recurring sales, the Rule of 78 could be just the tool you need to take your company to the next level.  

Every business owner needs a budget to help keep their spending on track. Forecasting revenue is the ideal way to get an educated estimate of how much money your company is likely to earn, versus how much you can reasonably expect to spend over the coming year.

Your company’s financial reports provide important clues about the monetary health of your business. Some of these clues manifest as financial warning signs. Becoming more familiar with your company’s financial statements not only helps you recognize many red flags, it lets you use them to make decisions that will divert trouble down the road. Here are 5 common financial warning signs to watch out for.

Business and finance are two interdependent fields yet two separate disciplines. Running a business often means focusing on day to day operations and developing a product line or menu of services within your core area of expertise. Larger financial issues like budgeting and forecasting get pushed aside for many reasons.

Chief financial officers (CFOs) tend to have a lot of different roles within a company. For small businesses, the role is even broader. However, most of the time, a company can't afford a CFO or doesn't need one for a good portion of its start-up cycle. That doesn't mean that the company can't benefit from the different roles that a CFO plays. They implement budgets, create forecasts, and are generally the forward thinkers steering the ship, financially. According to HBR, they are the "financial stewardship of the enterprise."

A good budget generally uses the past like a building block and integrates business goals into the numbers. But by spending too much time looking into the past, an owner will project what has already happened rather than prepare for what is going to be needed for the future. Although a budget should be completely realistic, it's OK to be a little off. Cash flow within the business can increase or decrease by certain accounts due to unforeseen circumstances throughout the year. These circumstances can be scary, but the budget can help you to be prepared for these unforeseen expenses. Entering the budget into QuickBooks month by month will also help you compare the budget to the financial forecast.

For some, it may be difficult to determine where you fit in with budgeting and forecasting for your small business.  Maybe you don't quite understand where exactly you fit in, or maybe the business doesn't even put together projections or a budget for the next fiscal year. 

Have you ever made a big mistake? If not congratulations! You are the first person ever. Big mistakes often equal expensive mistakes. A small business cannot afford to make expensive mistakes. Here are some common small business mistakes and what you can do to avoid making them.