One might be led to believe that profit is the main objective in a small business but in reality it’s the cash flowing in and out of a business which keeps the doors open. The concept of profit is considerably narrow and only talks about expenses and income at a certain point in time. Cash flow, on the other hand, is more dynamic in the sense that it is worried about the movement of profit and out of a small business. It is concerned with enough time of which the movement of the money takes place. Profits usually do not necessarily coincide making use of their associated funds inflows and outflows. The net result is that funds receipts often lag cash obligations even though profits may be reported, the business enterprise may experience a short-term funds shortage. For this reason, it is essential to forecast cash flows and project likely income. In these terms, it is important to discover how to convert your accrual revenue to your cash flow profit. You have to be in a position to maintain enough cash readily available to run the business, however, not so much concerning forfeit possible earnings from some other uses.

Why accounting is needed

Help you to function better as a business owner

Make timely decisions
Know when to hire a team of employees
Know how to price your products
Discover how to label your expense items
Helps you to determine whether to expand or not
Helps with operations projected costs
Stop Fraud and Theft
Control the biggest problem is internal theft
Reconcile your books and inventory control of equipment
Raising Capital (enable you to explain financials to stakeholders)
Loans
Investors
What are the GUIDELINES in Accounting for Small Businesses to address your common ‘pain points’?
Hire or check with CPA or accountant
What is the best way and how often to get hold of
What experience are you experiencing in my industry?
Identify what’s my break-even point?
Can the accountant assess the overall value of my business
Can you help me grow my business with profit planning techniques
How will you help me to get ready for tax season
What are some special factors for my particular industry?

To succeed, your company must be profitable. All your business objectives boil right down to this one simple fact. But turning a profit is simpler said than done. As a way to boost your bottom line, you need to know what’s going on financially constantly. You also need to be committed to tracking and understanding your KPIs.
Do you know the common Profitability Metrics to Track running a business — key performance indicators (KPI)

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

Outstanding Accounts Payable: Remarkable accounts payable (A/P) shows the balance of cash you now owe to your suppliers.
Average Cash Burn: Average income burn is the rate of which your business’ cash balance is certainly going down on average each month over a specified time frame. A negative burn is a great sign because it indicates your business is generating dollars and growing its money reserves.
Cash Runaway: If your business is operating at a loss, cash runway can help you estimate how many months you can continue before your business exhausts its cash reserves. Similar to your cash burn, a poor runway is a great sign that your business is growing its cash reserves.
Gross Margin: Gross margin is really a percentage that demonstrates the total revenue of one’s business after subtracting the expenses associated with creating and selling your enterprise’ products. It is just a helpful metric to recognize how your revenue compares to your costs, letting you make changes accordingly.
Customer Acquisition Cost: By knowing how much you spend normally to acquire a new customer, you can tell exactly how many customers you have to generate a profit.
Customer Lifetime Value: You need to know your LTV to be able to predict your future revenues and estimate the full total number of customers you need to grow your profits.
Break-Even Point:Just how much do I need to generate in sales for my company to produce a profit?Knowing this number will highlight what you need to do to turn a income (e.g., acquire more buyers, increase prices, or lower operating expenses).
Net Profit: This is actually the single most important number you must know for your business to be a financial success. If you aren’t making a profit, your organization isn’t going to survive for long.
Total revenues comparison with final year/last month. By tracking and comparing your total revenues over time, you can make sound business decisions and set better financial ambitions.
Average revenue per employee. It is critical to know this number to be able to set realistic productivity objectives and recognize methods to streamline your business operations.
The following checklist lays out a advised timeline to deal with the accounting functions that will preserve you attuned to the procedures of one’s business and streamline your tax preparation. The reliability and timeliness of the numbers entered will affect the key performance indicators that drive organization decisions that require to be made, on a daily, monthly and annual foundation towards profits.
Daily Accounting Tasks

Review your daily Cash flow position so you don’t ‘grow broke’.
Since cash may be the fuel for your business, you never wish to be running near empty. Start your entire day by checking the amount of money you have on hand.
Weekly Accounting Tasks

2. Record Transactions

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

3. Document and File Receipts

Keep copies of most invoices sent, all cash receipts (cash, check and credit card deposits) and all cash payments (cash, check, charge card statements, etc.).

Start a vendors file, sorted alphabetically, (Sears under “S”, CVS under “C,”etc.) for easy access. Create a payroll file sorted by payroll date and a bank statement data file sorted by month. A common habit would be to toss all paper receipts right into a box and make an effort to decipher them at tax period, but unless you have a small level of transactions, it’s easier to have separate data for assorted receipts kept organized as they come in. Many accounting software systems let you scan paper receipts and avoid physical files altogether

4. Review Unpaid Charges from Vendors

Every business should have an “unpaid vendors” folder. Keep an archive of each of your vendors that includes billing dates, amounts owing 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 cover your suppliers on time in order to avoid any late fees and maintain favorable relationships with them. When you are able to extend payment dates to net 60 or net 90, the better. iva 個人自願安排 Whether you make payments on-line or drop a check in the mail, keep copies of invoices sent and received using accounting program.