Business Sense — #entrepreneur

Why Word and Excel Aren’t Accounting Tools 0

As a business owner, you’re likely used to doing things the same way and have no intention of changing the way you operate. This is especially true when discussing the various accounting tools and techniques you’ve grown to love since starting your business.

Whether you’re dealing with payroll, taxes, bookkeeping, expenses, financial reports, invoices, or human resources, Word and Excel provide a lot of benefits when managing one or two employees. It’s a large reason why you continue to use it today.

For years, you’ve been working under the impression, “If it isn’t broke, then don’t fix it.” If this is true, why should you consider financial tax and accounting software when Word or Excel has been working just fine?

The truth is, Word and Excel aren’t built to sustain the growth of your business. These accounting tools don’t compare to the various business accounting software available. They put your business at risk and lead to widespread inefficiency throughout your business.

If your business is growing, you need business accounting software you can trust. For those that don’t believe us, we’re going to explain the major reasons why Word and Excel can’t be trusted when managing your accounting department.

1.   Too Many Costly Mistakes and Errors

When managing your business’ accounting and human resources without the help of financial tax and accounting software, you open the door to a wide range of mistakes, errors, and typos. It doesn’t matter how good you are at Word or Excel, there isn’t enough automation or integration to support your needs.

If you want to avoid these costly mistakes and make your job much easier every month, the right software can be designed and tailored to meet your needs. No more entering the wrong number, formatting errors, embarrassing mathematical mistakes, or missed deadlines.

2.   Late Payments From Clients

Word and Excel don’t make it easy for your clients to pay you in a timely manner and they don’t make it easy for you to collect that payment. It’s a lose-lose situation that could be solved with the right accounting software.

Easy online payments, different payment options, and vital ways to keep your cash flow in good standing are exactly what your business needs right now.

3.   Taxes Are Too Much of a Headache

If there’s a single time of the year that business owners fear most, it’s tax season. There’s so much you need to manage and maintain, making it difficult for things to go right -- which is essential when taxes roll around.

When you need extreme accuracy to avoid those nerve-wracking audits and IRS visits, investing in financial tax and accounting software taxes away those nasty headaches you can’t stand. Taxes will be easy and you’ll no longer fear them each year.

Accounting Tools Tailored to Your Business’ Needs

When properly managing your business and keeping it in good financial standing, the need for business accounting software has never been higher. Especially as your business grows, you need tools that can scale with it and contribute to the growth.

At Consultants In-A-Box, we have a strong passion for helping businesses like yours find practical and effective solutions for their accounting and human resources needs.

We help businesses generate speedy, quality, and professional invoices that are designed to make it easy for the customer/client to pay. There’s no spreadsheet involved, just a beautiful interface that you and your customers/clients will love.

Of course, that also means you’ll receive much quicker payments and won’t be dealing with constant cash flow concerns. This takes those headaches out of the question and cuts down the amount of time you have to spend handling overdue payments.

Finally, you’ll be able to avoid the costly payroll and tax errors your business is prone to each and every year. You won’t have to worry about not knowing what to do, not understanding the rates, or the different classifications. Your software will have all of it covered for you.

If you’re ready to start making this work for you, contact Consultants In-A-Box today. We’re dedicated to making this an extremely rewarding and easy experience for you and your team. We can’t wait to discuss more how we can help you take better control of your business’ operations.

Accurate Accounting Can Boost Your Business’ Value Here’s Why 0

Learning how to determine the value of a business requires taking several different factors into consideration. One of the most important factors to the value of a business is the accuracy of its accounting procedures.

Without accurate accounting, your business won’t hold any appeal to outside people -- whether it be potential employees, current employees, customers, clients, or even investors. It makes it difficult to feel confident with your business’ success when learning how to value a small business.

Since accounting affects every aspect of your business, you need to ensure you have the proper accounting tools, resources, and principles available to your business. It helps ensure accuracy and puts your business in a healthy position moving forward.

If you’re wondering how accurate accounting can affect your business value, we have nine reasons to give you. We’ll discuss them each in more detail below.

1.  Improved Marketing Forecasts

Owning a business comes with a wide range of expenses, but none can get out of hand quite like marketing costs. Before launching a campaign, you have to know your business is prepared for everything that comes after.

You’ll need cash flow, employee time (which costs money), and a campaign idea that’s built to work. That’s a lot to ask, but accurate accounting allows you to take any guesswork when launching a campaign.

With improved revenue forecasts, accurate cash flow statements, and expected expense reports, you can perfect the art of planning and budgeting when it comes to your marketing strategy. You’ll feel confident when launching your campaign and will have more time to focus on things that matter.

2.  Sustained Financial Success

Imagine setting out on a journey to a destination without a map or GPS to guide you there. You might run into small successes here and there when you come across a sign that helps you out, but it won’t be a sustained and effective way of getting to that destination.

Accurate accounting is your GPS when determining how to value a small business. You have goals and expectations for your business -- everyone does -- and accurate accounting is what helps guide you there.

It breaks down your current financial status, creates forecasts for the future, keeps a tab on your budget, income, revenue, expenses, and everything else you can think of. It helps you plan, prepare, and overcome anything your business encounters.

3.  Quality & Efficiency At Its Finest

There are going to be times when your business is presented an investment opportunity -- either outside the company or within the company. Some of these investment opportunities are going to be hard to say No to and others might even be a no-brainer.

Unfortunately, making smart, quality, and efficient decisions when it comes to investments requires accurate accounting. Even the ones that seem like a no-brainer aren’t always the best decision when looking at your business’ current standing.

With accurate accounting, you’ll know when the best time to invest in new equipment is or whether you have the funds to afford to hire more employees to improve efficiency.

4.  Employee Satisfaction

Speaking of hiring employees, accurate accounting can help you take better control of your human resources. Looking for employees when you’re in a tough spot leads to rushed hires and quick turnover. Looking for employees when things are working in your favor, however, can give you the time to find the right candidate. 

Accurate accounting also helps you know when to hire when to lay people off, and when it’s time to grow your business. Just like business growth makes an owner happy, it makes the employees happy. It means better benefits, better wages, and a better work environment.

The different departments in your business work together like the different organs in the human body. When one department is underperforming, it directly affects the rest of the departments. This is no different when it comes to the accounting and human resources departments.

5.  Preventing the Risk of Fraudulent Acts

Accurate accounting and seamless reporting when it comes to your current financial status help keep you better in-tune with the money coming in and out of your business every single day. You’ll know your expected expenses beforehand and will be able to better compare those expenses to what’s really being charged. 

This level of non-stop management becomes extremely easy with the right accounting software and helps prevent fraud throughout your company. You’ll be able to spot fraudulent acts as they occur and detect unwanted changes in real-time.

Catching these acts before they truly start to damage your business inside-and-out is essential to limiting the amount of damage they can do. You’ll save the rest of your employees, clients, and customers from a sticky situation, as well.

6.  Managing Business Costs

Any business is going to experience a wide amount of costs, whether it be daily, weekly, monthly, or yearly. There are fixed costs and variable costs, all of which need to be accounted for in real-time to effectively control your business’ costs.

Let’s say you need to cut costs in your business. Without accurate accounting, you might start cutting costs in places that shouldn’t or don’t need to be cut -- whether that be letting go employees or saying goodbye to certain products.

At the same time, you’ll be avoiding the key areas where you’re spending too much and can afford to cut costs. It’s a vicious cycle that could be prevented with the right accounting tools, resources, techniques, and assistance.

7.  Improved Security Where It Counts

Accurate accounting today requires an efficient software platform that gives businesses everything they need when managing their bookkeeping. Of course, this software also presents a level of security that spreadsheets, handwritten documents, and Microsoft Word simply can’t provide.

Anything handwritten can easily be lost, anything on a USB is prone to be damaged or unreadable, and anything on the internet can be hacked. That’s why you need secure software tailored to meet your business’ needs to help you stay safe when managing your company’s accounting.

8.  Financial Management

Poor financial management can quickly deteriorate your business value and it’s something that won’t go unnoticed by your customers, clients, and employees. They’ll see the warning signs and it’ll start to affect the success your business is supposed to see on a daily basis.

On the other hand, good financial management and accurate accounting have the opposite effect on your business value. Customers will feel comfortable investing in your business and employees will want to work there.

9.  Building & Maintaining Relationships

As a business, you have several people you need to satisfy on a daily basis. You have employees that want to know their job is safe. You have vendors that want to know their invoices will be paid. You have customers that want to know you aren’t going to close randomly.

Building these relationships is difficult, which makes it even more tragic when those relationships are destroyed. With accurate accounting, you can effectively maintain these relationships and keep your business in good standing with the community you’re surrounded by.

If you’re learning how to determine the value of a business and are starting to realize how important accurate accounting is to the process, we can help. We have the necessary tools, resources, and expertise to help you take control of your accounting procedures and center it all under one roof.

Contact Consultants In-A-Box today to discuss more how we can meet your accounting needs.

Check On These Important KPI's To Boost Your Business Strategy 0

As a small business owner, you understand the day-to-day operations your company values and are oftentimes the main person ensuring those operations are running smoothly. That’s only half the equation when it comes to being an owner and putting together a business strategy.

The other half of the equation involves utilizing the top KPIs for business success. This allows you to observe the ‘big picture’ of running a business and ensures you understand where your company currently stands.

If you want to not only implement your business strategy but set your strategy up for long-term success and sustainability, you need the following:

• Not just goals, but specific goals. Don’t sugar coat anything and don’t beat around the bush. Say what you want and want what you say.
• A way to measure your goals and success. If you want to be the best business in your industry, how long do you expect it to take?
• A strategy designed to help you achieve the goals and milestones you wish to accomplish. Successful strategies are precise and detailed.
• An ever-growing list of things to improve on, learn, and continue building. Businesses never stop, strategies never stop, and your customers never stop.

Without having the four things listed above, it’ll be difficult to grow your business. Not only that, but it won’t allow you to measure the growth and won’t give you a way of knowing where your company stands.

Why Are KPIs Important to Small Business?

KPIs, also known as key performance indicators, are a small business owner’s best friend when it comes to tracking their business’ current status. The beauty with tracking KPIs is that they’re used for everything, including measuring both long-term and short-term goals.

Let’s take a look at some of the major reasons why are KPIs important:

• They let you know if you’re on track to meet, surpass, or fall short of your expectations.
• They show you how successful you are in specific areas, making it easy to find a solution.
• Spotting signs of improvement helps ensure your business is always evolving.
• Identify opportunities and roadblocks well before you approach them.
• Understand how your customers feel about the products or services you offer.

Another reason why are KPIs important is because they’re always updated. You don’t have to wonder whether you’re looking at old numbers or new numbers. In fact, they make it extremely easy to look at old numbers, if that’s what you’re interested in.

They also make it extremely easy to form projections about the future.

Top KPIs for Business Owners to Track

Any productive business owner is going to have a list of key performance indicators that matter most to their specific industry, but there is also a wide range of KPIs that are important for every business owner to understand -- no matter your industry.

Let’s take a look at some of the top KPIs for business owners to keep track of on a daily, weekly, monthly, and yearly basis.

1.   Revenue Growth

One of the most basic, yet important KPIs to understand when running a business is revenue growth. It tells you whether you and your team are finding sustainable ways of earning revenue over time.

In order to calculate revenue growth, use your favorite accounting software to track and compile sales reports over a given period of time. For starters, use a one-month sample size. Once you have a second sample size, subtract the first sample size from the second one. Finally, divide the number you come up with by the total of last period’s revenue.

The goal is to see positive growth over time. When you start to see the numbers go in the opposite direction, it means there’s something wrong with one of your products or services that used to do well. Find the underselling item, work on a solution, and watch the numbers start going the right way.

2.   Revenue Concentration

Revenue concentration refers to tracking the percentage of revenue each of your clients is responsible for over a given period of time. The main goal is to have your revenue come from a wide range of sources, instead of having a majority of your revenue come from one or two clients.

The reason for this is because you don’t want to be left in a difficult position when your top client stops using your service and you lose a majority of your revenue.

A diverse client and customer portfolio is the key to success in this area. You should always be looking for new clients and opening the door to new opportunities because you never know when you’ll be scrambling around desperate for revenue.

In order to calculate your own revenue concentration to ensure you have a diverse portfolio, all you need to do is take the amount of revenue you receive from each client individually and divide it by the total amount of revenue your business receives over the period of time.

For example, let’s say you earn $20,000 in revenue over a month and you had 4 clients over that time. Let’s say those four clients contributed $2,000, $1,000, $15,000, and $2,000. Those clients will be contributing 10%, 5%, 75%, and 10% to your overall revenue, respectively.

You can see how losing Client 3 can leave you in a difficult position and could threaten the future of your business without a backup plan.

3.   Income Sources

Your sources of income are extremely important to understand and make this another one of the top KPIs for business owners to follow religiously. There are multiple different ways to track income sources -- by product, by service, by client -- and they are all just as important as the last.

Having an easy way to glance at your income sources and filter through them however you need to is essential to tracking these KPIs. It allows you to see which clients, products, or services are more profitable or popular compared to the rest.

This also opens the door to finding ways to boost the performance of some of the less popular products, services, or clients.

4.   Profitability

Revenue is good because it shows you have money coming in, but it doesn’t amount for the money you see leaving every month. That’s where profitability plays a large role, allowing you to take your expenses into consideration when evaluating your company.

By being able to view your expenses and how they compare to your revenue or income, you allow yourself the opportunity to:

• Evaluate whether or not you need to cut costs to save money -- which would increase profit.
• Determine which costs need to be cut, if that’s the route you’re going. You’ll have a clear breakdown of where you’re putting too much money each month.
• Evaluate whether or not raising your prices would help offset a rise in expenses.
• Determine whether it’s time to expand your client portfolio or start looking for more high-quality clients to replace some of your weaker ones.

Being able to make money is important, but being able to turn that money into a profit is where business owners start to scratch their heads. With an accounting software that keeps all your reports under one roof, this becomes a breeze for any owner.

5.   Working Capital

As a small business owner, your main goal is to grow your business into the powerhouse you know it has the potential to be. While that means being careful with your finances, increasing revenue, minimizing expenses, and much more, it also means taking advantage of opportunities when they strike.

That’s where working capital becomes a necessity for any business. Working capital is the amount of money you have to work with should you be in a position where you seek a loan or help from friends and family.

Having working capital means you can take advantage of those opportunities that seem too good to be true -- especially if you don’t necessarily have the cash flow to comfortably take the opportunity on.

In order to calculate working capital, you’ll need to understand your current liabilities and current assets. If your assets outweigh your liabilities, then you’ll be left with positive working capital. If your liabilities outweigh your assets, you’ll have negative working capital.

Positive working capital means you’ll be able to take a chance if you feel it’s necessary for the company’s growth and future success.

Using the five KPIs listed above to tailor your strategy to your needs is one of the most beneficial things you can do as a business owner. At a certain point, you have to learn how to act more like a CEO and less like a manager.

While managing is still important to the day-to-day operation, acting like a CEO is about setting your business up for the future by looking at what’s happened in the past.

If you need accounting software that makes it easy for you to track these five KPIs so you can take better control of your business, contact Consultants In-A-Box today!