The key to having a successful business is keeping your finances in order. Why is it important to have your finances in order? If your finances are a mess, there is no way to know how bad or good your business is doing. Some areas of your business may be doing amazing while other areas could be losing money. It is important to know these trends in your business so you can make the necessary changes to increase the bottom line. Thinking your business is doing good because there is money in the bank will lead you to some surprises, and I don't mean good surprises.
Besides knowing how much revenue a business is bringing in, business owners also need to keep an eye on their expenses. Are there expenses that need to be decreased or gotten rid of? Are there some expenses that need to be increased to increase revenue? Answering these questions is much easier when you have a current Income Statement to review.
Below are the bare basics of bookwork that should be completed:
*Reconcile bank statement(s) monthly
*Keep Accounts Receivables current
*Know how much you owe vendors
*Get your financial reports completed at least quarterly
*Meet with your Tax Preparer/Accountant at least twice a year
*Keep receipts and records
*Learn to understand what your financial reports are telling you about your business.
If you or someone you know needs help with getting their business finances in order, please contact me at 702-469-9426 or cstevens@numbercruncherllc.tax. I help business owners from all over the United States.
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