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One of the biggest mistakes that entrepreneurs can make in their business, is spending so much time trying to build their business that they do not look after their Edmonton bookkeeping. The reason why this is a mistake, is because keeping their finances organized and in order can help entrepreneurs use up-to-date financial statements in order to make better financial decisions. Industry Canada says that 50% of all Canadian entrepreneurs fail in business by their fifth year, and 29% of those entrepreneurs say that the reason why they failed is because they ran out of money. By having and utilizing up-to-date financial statements, entrepreneurs can be proactive not only in avoiding running out of money, but also be proactive in using the information in the statements to generate more revenue and grow their business.

The first thing that entrepreneurs need to understand is by being organized, they can make their bookkeeping not only easier but more accurate. The reason for this is because the organization can allow their Edmonton bookkeeping to have the most accurate information so that the financial statements can also be accurate. Entrepreneurs need to have their receipts not only but organized with notes about what expenses were. This can help their bookkeeper attribute each expense to the right account so that their income statement and balance sheet can be accurate. Business owners also need to ensure that they are keeping their bank statements as well as their credit card statements and handing the information over on a regular basis to their bookkeeper.

They ensuring their bookkeeper has all of the accurate and up-to-date financial information, business owners should ensure that they are getting interim financial statements every two weeks in their business. The more current the financial statements are that they get, the more accurate information business owners have in order to make decisions. An example of this is ensuring that they have up-to-date interim financial statements before they disperse payroll. This way, business owners can verify accurately, if there is money in their bank account in order to pay their staff. If not, business owners will have the opportunity to do some Accounts Receivable to bring more money in or increase the revenue so that they have the money to pay their staff.

If entrepreneurs are relying on looking at their bank statement in order to make those financial determinations, they may discover that they do not have the best information. If an entrepreneur has written several checks but they have not yet cleared their bank account, looking at their bank statement is not going to help them understand if they have the money in order to make a purchase. By utilizing Edmonton bookkeeping, entrepreneurs can review their financial statements including their balance sheet so that they can verify what money they have to utilize in their business.

It is extremely important that entrepreneurs get into the habit early on of reviewing their balance sheet in order to make financial decisions, so that they never end up in a situation of making a purchase they cannot afford and their business runs out of money.

by being organized financially as soon as entrepreneurs open their first business, they can ensure that they have accurate Edmonton bookkeeping, which helps them stay organized financially. Business owners who do this right from the beginning can grow their business in such a way that there proactively avoiding running out of money in their business and also being able to utilize up-to-date financial statements to see when it is necessary to increase revenue and minimize expenses in their business.

One of the first things that entrepreneurs should learn when they are brand-new in business, is that it is not okay to use their personal bank account for business. If it is unavoidable, Edmonton bookkeeping will be able to attribute that expense to the business owners’ shareholder loan, but it is much easier and simpler in order to keep them separate right from the very beginning. Entrepreneurs who get into this habit early can ensure that they keep their finances organized in order to have the most accurate financial statements. If an entrepreneur has their corporate and personal expenses lumped together in a variety of personal and business bank accounts, it is going to take the bookkeeper a longer time in order to sort through all of the expenses that month. For example, looking at a personal bank account, a bookkeeper will have no idea if the money spent at a restaurant was a personal meal or a business meal. It will require the bookkeeper to also talking to the entrepreneur more often, and wasting everybody’s time.

When entrepreneurs are new in business and their learning how to read their interim financial statements, it is extremely important that they learn that their income statement should be organized in numerically descending order. The revenue should be at the top and they should also see on their income statement the cost of goods sold and their expenses. When Edmonton bookkeeping puts the expenses in numerically descending order, an entrepreneur will be able to see very easily what is costing the most in their business, and if they need to minimize expenses that they should do so they look at the items that appear at the top of the list first.

Another great tip for entrepreneurs is to a time in their schedule in order to speak to Edmonton bookkeeping. By scheduling it and, entrepreneurs can ensure that there making it happen because typically whatever is scheduled gets done. This is extremely important to have regular conversations with their bookkeeper so that entrepreneurs not only can ask questions and ask what certain reports mean but also for the bookkeeper to be able to verify if things are accurate and fix errors, to ensure that all the information on those financial statements are accurate. The more accurate the financial statements are, the more value they have to an entrepreneur in helping them make financial decisions.