7 Great Accounting Tips For Your Small Business

green0piggy-bank-moneyStarting your own small business can be a dream come true. Among other things, it’s a way to follow your passion, control your destiny, choose who you work with, get an incredible sense of satisfaction and of course, make money. However, some of the responsibilities that come with it will be outside your area of expertise – for one, it's no secret that accounting can be tricky and tedious.

Luckily, there are ways to keep on top of what can be an arduous task. This article outlines tips that can help make your small business accounting process simpler and more efficient. After all, getting a better handle on your money will help you to ease your stress, set and achieve long-term goals, iron out inconsistencies in your cashflow, save time and even improve your revenue.

Use purchase orders

Purchase orders (or ‘POs’) can revolutionize small business cashflow. Being in control of your costs is extremely important – and purchase orders put the customer and supplier on the same page. Both parties agree on the details of a purchase when transacting goods or services, and knowing what bills are coming up puts you in better control of cashflow.

Purchase orders also help you control spending. If orders are placed via phone or even from a staff member’s email account, it can be tricky to get a smooth, reliable process in place. Purchase orders let you ‘raise’ orders in your accounting software and have them okayed by an approving manager before they’re sent to the supplier.

The process is more secure than carrying a credit card, check or cash, as purchase orders alone give your business the authority to buy goods. Rather than handing over money to receive the product or service, all you need is a robust approval system – which most accounting software provides.

Keep on top of invoicing

Keeping proper records of which invoices need to be sent, paid and chased up is an extremely important measure for small businesses to take. Failure to do so can mean late, unpaid or forgotten bills, so it’s important to have a process in place, as getting paid on time is vital if you want to maintain a healthy cashflow! Luckily, there are measures you can take to increase your chances of getting paid on time.

For example, make sure you invoice contains all the necessary information. It’s important the invoice is accurate the first time to prevent any delays down the track.

What’s more, it’s a fact that the earlier you send invoices out, the quicker you'll get paid. Get a system in place so invoices are sent out as soon as the work is done. If you don’t have software that generates invoices to be sent out instantly, assign a staff member to track your invoices and have a manual process in place to deal with unpaid bills. Chase up your debtors by issuing a second invoice, emailing or phoning them. If you charge late-payment fees, this can serve as a particularly helpful reminder.

Consult and collaborate with a trusted adviser

Although it costs to hire an accountant, it’s worth it for your peace of mind – just think how much an accounting error could cost. An accountant’s familiarity with finance and tax laws will save you money in the long run. They’re more likely to find deductions, process financial data quickly, stay on top of tax law changes, be able to answer your questions and help you avoid penalties.

The right accountant can also become a trusted advisor to your small business. You’ll be able to collaborate and consult with them on budgeting and forecasting, growth plans, cashflow management, risk assessment and business performance.

Of course, finding the right accountant is crucial. Small businesses have particular, complex accounting needs and fewer resources than medium and large businesses. When you’re looking for an accountant, make sure they understand these needs and have experience in 1. working with small businesses 2. dealing with businesses of a similar structure to yours, and 3. your industry. Find out exactly who in the practice you will be working with, and have a chat to make sure they will be a good fit as an advisor and ally.

Take advantage of technology

If, by some chance, you haven’t yet – get a computer. And get online.

If you’re reading this article, it’s likely that you’ve got this sorted – but if you’re passing this information along to someone else, make sure to stress this point!

Most of your customers, suppliers and business partners will be using computers, computer software, and the internet. Your accountant almost certainly will be. It’s imperative that you are able to share this medium with them to enhance collaboration, maximise your relationships and improve your services.

If you still print and snail-mail correspondence and invoices to your clients, you might be surprised at how much computers will save you (and the planet!) on paper, envelopes, postage and time. If you’re not sure where to start, check out the Paperless Coalition for tips and applications that can help you leave those piles of papers and boxes of files where they belong – in the past.

Using a computer means reducing the chances of human error when it comes to your financial data. For example, accounting software automates countless processes which were previously manual, ensuring accurate figures. Online accounting in particular lets you easily track income and expenses, view your businesses financial activities in real-time and backs up records for safekeeping.

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Track and manage your expenses

Get a system in place that will help you monitor and record your financial activity. Come audit time, you’ll be grateful to have a system that lets you trace all financial movements. Ideally, you should be able to track activity for at least the past year.

For example, make sure to keep track of your receipts. You can save space by taking a photo of or scanning your pesky scraps of paper so you can file them digitally. Even better, apps like Receipt Bank turn receipts and invoices into data you and your company can use.

Another tip is to keep in mind which expenses are deductible. Small business accounting programs supply a ‘chart of accounts’, which lists of all the accounts used by a business to code their transactions to – including the most common tax-deductible business expense categories. For example, business travel and meals, insurance, using your personal car for business, office supplies, payroll and subcontractors may all be tax-deductible, providing the primary purpose is serving your business. As the IRS puts it, “a business expense must be both ordinary and necessary”.

Plan for upcoming expenses

As well as tracking your existing expenses, it’s important to plan for the future. Think about the expenses you have coming up over the next six months, five years, decade. Will you need a new premises? New office equipment? More staff? Extra insurance?

Chat to your accountant or financial advisor, as they are more likely to think of anything you might have missed, provided they have a good understanding of where your business is headed.

It’s also important to set aside money for taxes. Again, your accountant will be able to help you plan to put away a dedicated amount of money each month – or each time you receive a large payment – so the funds are there when you need them.

Use an accounting system you have tried and trust

Using a spreadsheet to keep track of small business finances no longer cuts it. Accounting software – particularly online accounting software – can revolutionize the way a business runs. There are plenty of affordable options designed to simplify small business accounting and maximise financial performance – most of which offer free trials.

The benefits of using an accounting system are numerous. For starters, the good ones are user friendly – because small business accounting software is designed especially for its intended users. If you find the right package for your business, it should be intuitive, easy to use and get jobs done in a few clicks. Another huge user benefit is how accessible it is. Because your information is stored online, you can view real-time financial data at any time, anywhere, from any device with an internet connection.

Online accounting software can also integrate with hundreds of business applications. This means your CRM, payroll, reporting, inventory, invoicing, debtor tracking and more, can sync up and work as one package, tailored to your needs. This way, you can manage all aspects of your business without having to transfer data manually. Having an overview of all you business data and financial position means you have all the information you need to run your business at your fingertips.

Online data is also extremely secure. Because your data isn’t stored on your computer, if your hardware is lost, stolen or damaged, all your data is completely safe and accessible, waiting for you in the cloud. What’s more, security is one of the highest priorities for online business software companies. They spend millions making sure the data in your accounting software is encrypted to the same level as your internet banking.

 

Applying these tips to your small business accounting will help you comply with tax laws and put you in a better position to monitor the health of your cashflow and the day-to-day running of your finances. And the more organized your finances are, the more time and clarity you’ll have to focus on making your business a success.

 

lucy-godwinLucy Godwin lives in Wellington, New Zealand, and works for Xero accounting software. In her role she engages with the small business and accounting communities and blogs for them about finance, marketing and cloud computing. Get in touch on Twitter @LucyJaneGodwin.

Small Business Toolbox – February Twenty Second

Each week I like to post useful tools and resources that you may be able to use for your business.  The resources I post here are either free or available at a low cost.I don’t go into much detail here, so feel free to check them out yourself and let me know what you think.  If you know of any great tools and services that will help small business owners, please share them in the comments below.

Present.Me – Upload your slideshow presentations and then record a side by side video of you giving a presentation of the slide show.  Free and paid plans available.

Audacity – Free Windows based audio recorder.  Record, edit and mix your own audio.  Great for presentations and podcasting.

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Have questions about the best tools to use for your business?  Contact me with your questions and you can rest assured you will receive a response!  Contact me here

What To Do When Your Business Gets Stuck

Rut in the roadIs your business stuck in a rut and you can't seem to get out of it, no matter how hard you try?

It seems like the harder you push, the more money you spend…..you just can't seem to push the business forward.

It's not the business that's stuck, it's you.

For small business owners, you and your business are tightly intertwined.  Your attitude, energy and perseverance has a direct impact on the success of your business.

If you feel optimistic and full of energy, your business and employees will feel it.  If you're stressed out and depressed, they will feel that as well.  You're the captain of this ship and you decide where it goes, for better or for worse.

 When You Are Stuck

All business owners get stuck.  Sometimes it's easy to pull yourself out of it, other times it's like trying to get out of quick sand, the harder you try, the deeper you sink.

That's usually when that lingering feeling of panic and hopelessness starts to sink in.

The most important thing is to recognize that you are stuck and to know that it's something that happens to all of us.  Before you go and try and roll that boulder up the hill, take a minute and breathe.

Firefighting Days

Gary-Shouldis-FDNYWhen I was in the NYC fire department (seems like a lifetime ago) we did a lot of training.  Probably about 50 hours of training for every hour of actual firefighting.  When the stakes are high, you can never have enough training.

When you're inside a burning building, it's a surreal event.  It's pitch black, you wouldn't be able to see your finger even if you poked yourself in the eye with it.  You're wearing an oxygen tank, so the only sound you hear is your own breathing, just like Darth Vader in Star Wars.  You can feel heat coming through your bunker gear (firefighter clothing), knowing that if you didn't have this gear on, you're body would fry like an egg.

As a firefighter, you're trained for this.  You know what your job is and what you need to do.

Everything is cool until you get lost.

Getting lost inside a burning building is scary.  You've lost your sense of direction, you can't see a thing and the only thing you can hear is your own breathing…..which is getting faster.

You also know that with every breathe you take, you're oxygen tank is getting lower.

At this point it's easy to start to panic.  Especially when conditions are rapidly deteriorating.

When this happens, that mask on your face feels like someone is trying to smother you with a pillow.  The natural instinct is to pull of your mask so you can breathe air and get that suffocating feeling off of you.

But a firefighter knows if they do this they will die.

The super heated gases in the air will fry your lungs on the first breathe.  If that doesn't kill you instantly, the carbon monoxide will.

When a firefighter gets lost and panic sets in, the first thing they are trained to do is not to try and escape, or yell for help.

When a firefighter realizes they are lost, they stop what they are doing and breathe.

They're trained to stop, get their shit together……and then figure out how they're going to get out of their predicament.

 

Stop and Breathe

When you're lost, the worst thing you can do is keep moving.

When you recognize you've lost your way, the best thing you can do is to stop what you're doing and breathe.

Most of us business owners, when we feel lost, we try and push harder and harder, hoping to break out of the rut we're in.  We put in more hours, we start stressing out over everything and we start throwing money at marketing initiatives hoping that'll be the cure.

It's panic mode, and if you don't stop and pull yourself out of the situation, you'll be running in that mouse wheel until you tire out and collapse.

Instead of more work and more hours, it's time to step back, regroup and think logically about how you and your business are  going to get out of this.

 

So What Do You Do?

After you've stepped back, recognized that your business is stuck and you're the only person that can get it unstuck, it's time to put together a plan of action.

 

Backtrack

When a firefighter gets lost, they will stop and backtrack in their mind to see at what point things went south for them.  Look back and reflect on what got you into this rut in the first place.  Have you been distracted?  Have you cut back too much on marketing because cash flow is tight? Are you feeling stressed out and depressed?  Is the customer service starting to falter because you're not training and mentoring your employees like you used to?

Spend the time necessary to identify the cause of the this stagnation before you try and get yourself out of it.  You want to be like traditional medicine where you treat the cause of the problem, not like modern medicine where you only treat the symptoms.

 

Regroup

Once you've identified what's been keeping you from moving your business forward, you can start putting together a plan to get you back on the right track.  Figure out what resources you will need to get you back on track.  This could be better training, a better attitude, smarter marketing or maybe you're just overwhelmed and you need a break so you can come back refreshed and ready to take on the world again.

Whatever it is, put together very specific action steps on how you will get out of this stagnant state.  Start with small steps and gradually work onto bigger ones.  A first step might be to send a newsletter out to your customers because you haven't done so in a long time,  or to take your employees out for lunch because you don't remember the last time you did.

 

Take Action

You can do all of the reflecting and planning you want, but if you don't take action and change the course of the ship, it's all a waste of time.

Most non-business owners think that the value is in the idea, where most business owners know that execution is where the rubber meets the road.  Taking action is what's going to pull you out of that rut, not talking about it.

Stop saying and start doing, or as Ben Franklin said, “Well done is better than well said”.

 

Breathe, Then Do

You've stopped and stepped back from the situation. You've identified the cause of your stagnation.  You've developed a plan to get you out of it.  And you've taken your first action steps free yourself from it.

Congratulations, you're no longer stuck.

It'll happen again, it always does.  But when it does, let your training kick in and breathe.

Small Business Toolbox – February Fifteenth

Each week I like to post useful tools and resources that you may be able to use for your business.  The resources I post here are either free or available at a low cost.I don’t go into much detail here, so feel free to check them out yourself and let me know what you think.  If you know of any great tools and services that will help small business owners, please share them in the comments below.

MOS Solo – Free authoring tool that lets you create graphically rich content for e-courses, presentations, etc.

Ubersuggest – Free keyword planning tool.  Enter a keyword and it will suggest additional keywords and phrases based on that keyword.

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Have questions about the best tools to use for your business?  Contact me with your questions and you can rest assured you will receive a response!  Contact me here

5 Mistakes That Kill Website Conversions

web-sales-funnelYour website sucks.

Ok, maybe it doesn't totally suck, but from a conversion standpoint it does.

Most business owners dream of a website that drives sales, either on their website or in their stores.  Unfortunately the majority of business owners are left with a website that acts as more of an online brochure than a sales machine.

Why is that?

The first tragic mistake business owners make is thinking of their website as an afterthought.  They'll spend 150k building out their new storefront and then try and cheap out by either building a website themselves or finding the cheapest web developer they can find to do the job.

Pat yourself on the back, you saved a thousand bucks on your website and lost the 100+K in sales your website could have given you if you did it right the first time.

You have to spend some time and money in order to get a properly working website.  You also need to either hire a copywriter or find someone who's a great writer to help you craft your message.  Bad copy is unconvincing, uninspiring and sometimes just plain silly.  And it won't convert.

When it comes to turning visitors into leads, you have to give people a clear path to conversion.  You also have to reassure them along the way that they're making the right decision.  That decision may be filling out a contact form, leaving their email address or calling you.

If you want to turn your brochure website into one that converts, you first have to understand the elements needed to get people to take action on your website.  Below are 5 common conversion killers that I see all the time on business websites I work on.

When you're done, take a look at your own site and where you can start to make conversion improvements.

Missing Value Proposition

When people land on your website, the first thing they should see is your value proposition.  What is that exactly?  It's your reason that the person on your website should choose you over a competitor.  The mortgage website below has some good calls to action, a “Get This Rate” button and a contact form right at the top of the site.  What's missing is the value proposition that reassures a visitor that it's ok to take the next step.  You need to deliver that perceived value the minute they land on your website, or you'll most likely lose them, probably to a competitor.

mortgage-value-prop

Learn more about value propositions here

Lacks Clarity

All I can say is, WTF?  What would you say is the one action this gate and fence website wants its visitors to take?  This is a pointless homepage.  It looks terrible, reads terrible and has no point except to make people cross-eyed trying to figure out what to do next.  Before you spend a dime on your website, be very clear what action you want people to take when they are there.  Once you've determined that, you can know design every aspect of your website with that in mind.  Start with the end goal first and then work backwards when it comes to building your website.  Remember, you need to give you visitors a clear path to conversion.

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Learn more about message clarity here.

Copy Is Terrible

In case you can't read it. “Mississauga real estate agents Darlene & Wayne Foster apply one of the most advanced home selling systems in the Mississauga area real estate market. Selling residential, condominium, multi family and investment property. Searching for Mississauga MLS® listings, relocation services and a referral service for relocation are also a value added for the buyer or seller moving in or out of the Mississauga area real estate market.”

This real estate website copy started out as some sort of value proposition and then took a left turn into some seriously bad SEO keyword stuffing.  Makes no sense, inspires no one to take action and just looks foolish.  This is what happens when you let a “marketing company” take control of your brand.  The most important thing on a page are the words on it.  It's the words that sell.  Invest in good words.

Bad real-estate-copy

Learn more about effective website copywriting here

Use Of Image Sliders

Image sliders, they're all the rave in website design and everyone loves them.  Only problem?  Terrible when it comes to conversion.  Study after study shows people don't click on them, they can't remember the rotating messages sliding in front of them, and they take up the valuable, “above the fold” part of your website where you should be putting your best value propositions.  This pool website looks great, but has 5 rotating images, all with different offers.  Sounds like a great idea to cram as much as you can into a single space by using a slider, but you're better off using static images and great copy to deliver your most important messages.

Slideshow

Learn more about why image sliders are bad for conversions

Lacks Credibility

Great, somebody has made it to your website and is interested.  They want to know more, so they look for signs of credibility and trust.  They go to your About Us page, because that's where people go when they want to learn more about you and your business.  And this is what they get…

“……are a carefully selected group of people who have a distinct passion for craftsmanship and integrity. These experienced builders will use a variety of textures, colours and styles to create the aquatic environment of your dreams….”

A carefully selected group of people?  If you read the rest, it basically doesn't say anything about the company, just a lot of superficial fluff.  Good pool website that lacks credibility and trust signals.  Your About Us page, Contact Us page, Testimonial page are all prime opportunities to build on the credibility of your value proposition.  These are all supporting pages that will help you seal the deal when it comes to a visitor contemplating whether or not to reach out to you.  Unfortunately, most business owners (and web designers) think of them as filler pages and create filler content that does nothing to help with conversions.  Look for opportunities to increase you “Web Cred” by examining and refining the supporting pages on your website.

about-us-page

Learn more about building your credibility here

In Summary….

If you want your website to become a sales workhorse for you, you'll have to spend some time and money.  Don't cheap out and expect miracles.  Clarity in your messaging and design trumps any kind of fancy stuff.  The words on the page are the #1 factor in getting people to take action.  People should know right away the value you can give them.  If you want people to take action, you have to ask them and make it easy for them.  Know what you want your website to do for you and design it that way.

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Small Business Toolbox – February Eighth

Each week I like to post useful tools and resources that you may be able to use for your business.  The resources I post here are either free or available at a low cost.I don’t go into much detail here, so feel free to check them out yourself and let me know what you think.  If you know of any great tools and services that will help small business owners, please share them in the comments below.

WhatFontIs.com – Ever see a font your like and don't know what it is?  Save an image of it and upload to WhatFontIs and they will scan to and let you know what font is being used.

Join.me – Free (paid Available) online screen sharing tool from LogMeIn.  Share your screen instantly with other without having to register for an account.  You can also create a custom url you can share with people.

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Have questions about the best tools to use for your business?  Contact me with your questions and you can rest assured you will receive a response!  Contact me here

5 Steps To Turn Customers Into Advocates For Your Business

Peter Druker-Customer Service QuoteCustomers are the lifeblood of any business, without them you actually don't have a business.

Every business dreams of having enthusiastic customers, ones who look for any opportunity to spread the good word about their business and it's excellent service.  The question is, how do you turn your satisfied customers into enthusiastic advocates for your business?

The 5 tips below will get you on your way to turning your customers into raving fans for your business.  The first three can be replicated by your competitors with some work, but the last two are much harder to copy and will elevate you above most of your competition.

1- Be  Friendly.  Everyone wants to do business with people they like, and are naturally attracted to friendly, positive people.  Create a warm, friendly atmosphere for your customers when they walk through your door.  People will relax and open up once they feel comfortable doing business with you.  If you've never read “How to Win Friends and Influence People“, by Dale Carnegie….it's probably the best book on communications and relating to people ever written.

Do what you do so well that they will want to see it again and bring their friends. – WALT DISNEY

2- Be Consistent.  Your customers expect you to deliver on what you say you'll deliver.  If you aren't consistent in delivering on the little things, like answering your phone consistently or returning calls in a timely manner, any mind blowing feats of customer service you dream up and implement won't matter.  Like they say in basketball, “Slam dunks woo the crowd, but layups win the game”.  Make sure you can deliver on your customer promises each and every time before you start moving onto anything spectacular.

Being on par in terms of price and quality only gets you into the game. Service wins the game. – TONY ALESSANDRA

3- Be Available.  Your customers expect you to be there when they need you, whether it's responding to phone calls, emails or having someone available on location to answer any questions they may have.  Being available to your customers is vital to building a lasting relationship with them.  Nothing frustrates people more than a business that doesn't make itself available to their customers.  You see the frustrations everywhere from automated answering services (think of your cell phone provider) that create a never ending maze for callers to navigate, to the website that thinks a FAQ page replaces any need to leave a phone number or email on the website for their customers.

Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong. – DONALD PORTER

4- Become a partner with your customer.  Don't just sell to your customers, help to solve their problems and achieve their goals.  Listen to them, be responsive to them and make them feel like you're on the same side of the fence as them.  Once a person feels like you're looking out for their best interest, the walls come down and they truly start to value what you have to say.

Here is a simple but powerful rule – always give people more than what they expect to get. – NELSON BOSWELL

5-  Become a resource for your customer.  Become the go to authority in your industry.  Do you help educate your customers?  Do they feel like they can learn something by doing business with you?  Do you connect them to other businesses when you can't provide what they want?  When a customer asks you for your advice and then acts on that advice, you've earned the ultimate relationship with them, one of trust.

The goal as a company is to have customer service that is not just the best, but legendary. – SAM WALTON

Stop being a salesman

As you can see, the above steps are meant for you to stop being seen as a salesman, but a trusted partner and resource that's looking out for their customer's best interest.  Being likable, doing what you say you will do, and becoming a person and business people trust will help you earn that legion of customer advocates you deserve.

 

Small Business Toolbox – February First

Each week I like to post useful tools and resources that you may be able to use for your business.  The resources I post here are either free or available at a low cost.I don’t go into much detail here, so feel free to check them out yourself and let me know what you think.  If you know of any great tools and services that will help small business owners, please share them in the comments below.

Colour Lovers – Incredibly useful site to get color ideas and design inspiration for your next design projects.  Choose from color pallets and get the html codes so your next design project is awesome.

Flaming Text – I'm not an advocate of trying to design your own logos and websites if you don't have the skills, but this site lets you create free logos if you need to.

Quote T.S. Eliot - Risk

Have questions about the best tools to use for your business?  Contact me with your questions and you can rest assured you will receive a response!  Contact me here