Entrepreneurs are often extremely busy learning how to run their business, that they may have the best of intentions to do Edmonton bookkeeping themselves but are often too busy trying to increase their sales, develop their product, and market their business that the bookkeeping is something that ends up not getting done on a regular basis. The reason why this is so important to get done is that any financial decision that an entrepreneur needs to make should be made after consulting the interim financial statements such as their balance sheets and their income statements. If entrepreneurs are not consulting these documents before they make any business decisions, they could put their business at risk of running out of money. Industry Canada says that out of the 50% of entrepreneurs that fail in Canada, 29% of them say that the reason why they fail is that they ran out of money.
Regardless of who ends up doing Edmonton bookkeeping in the business, entrepreneurs need to send things into their calendar. They need to have in their calendar to have organized finances whether they end up doing them themselves, or sending them off to a bookkeeper, but putting it into their calendar will ensure that it gets done. This organizational step means that a business owner needs to take all of the receipts in their business, that they have purchased, and made notes on them about what the receipts were for, what was purchased and what category should fall under. For example, an entrepreneur might have a receipt for Staples. They need to write on the receipts were they buying office furniture, if they were buying photocopying services or office supplies. In addition to that, business owners need to keep that month’s bank statements and credit card statement together with those receipts.
In order to make that organizational act easy, business owners should follow this rule of thumb from Edmonton bookkeeping to stay as simple as possible in their business finances: they should only have one business bank account that they use for operating expenses. That is it. Entrepreneurs often think that they should have multiple bank accounts for multiple purposes, for example one for GST payments, one for federal tax, one for provincial tax, and one for operating expenses. However as clear is that makes it in each entrepreneurs mind, that actually does not end up being more organized, because as Edmonton bookkeeping recommends, the more bank accounts there are, the more things they have two take into consideration.
The last tip that business owners need to take into consideration in order to keep their finances simplified, is to not use their personal bank account for business. Every once in a while this might be unavoidable, and Edmonton bookkeeping will always be able to attribute that purchase to the business is shareholder loan in their corporation, but in order to keep their finances organized and accurate on a regular basis, entrepreneurs need to ensure that they never get into the habit of using their personal bank account for business expenses.
Many entrepreneurs do not understand how important it is to have up-to-date interim financial statements from Edmonton bookkeeping. However, by having up-to-date income statements and balance sheets on a regular basis, can help entrepreneurs make informed business decisions that can help them not only avoid running out of money in their business, but also help them make great financial decisions that can help them significantly grow their business.
In order for entrepreneurs to have the best information in order to end up with up-to-date and accurate interim financial statements, business owners need to ensure that they are sending the information off to their bookkeeper on a regular basis, and in order to do that, entrepreneurs need to create a schedule and their calendar that has them doing that at a regular time on a regular basis. Most entrepreneurs understand that the tasks that are scheduled in their calendar are the ones that get done, and they should consider bookkeeping as one of the most important tasks of their business.
Something else that entrepreneurs should ensure is scheduled on a regular basis, is the time to talk to Edmonton bookkeeping about their finances. Not only is it important that they have communication, but it needs to be a real over the phone conversation, rather than an email or text communication. This will allow a great conversation between the entrepreneur and their bookkeeper in order to ask questions about the statements, to get clarification fix errors and ensure that the business owner has everything that they need in order to use those statements to help guide their business decisions.
Entrepreneurs may question how often they need to get these interim financial statements from Edmonton bookkeeping. A great recommendation is if entrepreneurs are paying their staff members on a biweekly basis, but that is often they get interim financial statements as well. It is a great habit for business owners to get into, reviewing their financial statements before dispersing payroll. If they have a long enough period of time between payroll cut off and payday, they will be able to use those financial statements to ensure they have enough money to meet their payroll commitment. If not, the have enough time to generate more revenue, or to call clients that owe the money in order to ensure that they do have enough money to meet that payment.
By getting into the habit of consulting their financial statements before making any payment, entrepreneurs can ensure that they always have the money in their business to make the purchases that they need to. Not only can entrepreneurs use these interim financial statements any time they want to make purchases, but they should also use those financial statements to guide financial decisions such as do they need to generate more revenue, they need to minimize expenses, and help them set goals in their business. For example, if they want to make an asset purchase, they will be able to use those financial statements to plan out what they need to do in order to have enough cash in their business to make that purchase. This way, entrepreneurs can be proactive in their financial business decisions, they can help them grow their business.