Because of the high failure rate for entrepreneurs in Canada, Edmonton bookkeeping recommends that entrepreneurs get into the habit very early of keeping their finances organized. Being organized can help business owners get up-to-date financial statements that are more accurate. The reason for this is because when bookkeepers get organized financial information, they are able to work on interim financial statements more efficiently, easier, and therefore more accurate. The reason why it is extremely important for entrepreneurs to have up-to-date financial statements is so that they can make the best decisions they can using up-to-date financial statements.
One of the first things that new entrepreneurs should learn, is that they should have one bank account. In order for entrepreneurs to have efficient Edmonton bookkeeping services, they should have one business bank account where they disperse all of their operating expenses from. It is also common for entrepreneurs to need a credit card, therefore they should have one business credit card. By having multiple bank accounts are multiple credit cards, business owners are making things far more complicated for their bookkeeper, which results in their bookkeeper having to decipher a lot of information, and end up potentially getting things incorrect.
Another great tip is that entrepreneurs should not use their personal bank account for business purchases. Edmonton bookkeeping says this is extremely recommended to not do, because then a business owner is going to have to give the bank statements for their personal as well as business account, and then the bookkeeper has to figure out if every single personal purchase was for business or not. If they aided a restaurant, the bookkeeper needs to question if it was for business or for personal. Because of this, the recommendation is for entrepreneurs to never use their personal bank account for business.
When entrepreneurs are getting Edmonton bookkeeping to organize their finances, they should also understand that one of the best things that they can do is set aside time in their calendar to talk to their bookkeeper. The reason this is important is so that the entrepreneur can ask the bookkeeper questions about their statements, it gives an opportunity for a back-and-forth conversation about the statements so that the bookkeeper can fix errors, question anomalies and for the entrepreneur to ask advice and get clarification. It is much more efficient to have this conversation over the phone rather than through text or email. It will take much longer, and in the end be confusing and have to result in a phone call anyway.
By staying organized, business owners are able to get up-to-date financial information from their Edmonton bookkeeping and have those regular, up-to-date financial statements in order to be able to make better financial decisions in their business. If entrepreneurs are making financial decisions in their business without first consulting their interim financial statements such as balance sheets or income statements, they put their business at risk by not understanding the finances before making those decisions.
There are several things that entrepreneurs need to remember when they are first starting out in business, but one of the best recommendations they can follow through with is to get Edmonton bookkeeping to look after their finances. The reason this is so important is that a great bookkeeping service can help entrepreneurs stay organized financially, and get up-to-date interim financial statements that they can use to make decisions in their business. Since 50% of all entrepreneurs are out of business within the first five years, and 29% of those entrepreneurs say that the reason why their business failed was because they ran out of money, getting into the habit too early in their business ownership to look at their finances before making any financial decisions can help them avoid that problem.
One of the first things that entrepreneurs should learn about staying organized in order to hire Edmonton bookkeeping, is they should keep a note of all of their purchases, through organizing receipts, or making notes on bank statements. It is very important that their bookkeeper knows what each of the purchases was for, so they can attribute it to the right account. Not only do business owners need organized receipts and bank statements, but they also need to keep their credit card statements as well. By getting this up-to-date financial information to their bookkeeper on a regular basis, they will be able to get regular biweekly interim financial statements.
One of the reasons why it is so important to get biweekly financial statements is so that entrepreneurs can make financial decisions in their business with the most up-to-date information possible. This is especially true for entrepreneurs that pay their staff biweekly because they should be consulting their financial information in order to see if they have the funds to disburse payroll. If not, they will be able to be proactive in their business and generate more revenue, or ensure that there on their Accounts Receivable, so that they can generate that money in their business to pay their staff. If entrepreneurs do not review their finances before dispersing payroll, they could risk not having enough money to pay their staff.
When entrepreneurs are learning how to read their interim financial statements, they should understand that their income statement should be organized and numerically descending order. The reason why Edmonton bookkeeping does this is so that they can see easily what the highest expenses of the business are. If an entrepreneur looks at their income statement and balance sheets and decides that they need to cut expenses, they will be able to spend time minimizing expenses on the top half of their income statement in order to impact their bottom line the most.
By getting into the habit of keeping their finances organized early on in their business, entrepreneurs will be able to continue getting up-to-date interim financial statements, that they can learn how to read and utilize in their business in order to make informed financial decisions that will benefit their business.