Regardless of who does the Edmonton bookkeeping in the business, whether it is the business owner or they hire someone, staying organized is the key to entrepreneurs being able to get up-to-date and accurate interim financial statements. The reason why is no matter who does the bookkeeping, the better the financial information is presented, the easier it is to create the interim financial statements for a business. When entrepreneurs are making business decisions in their company, utilizing the most accurate financial statements as possible is the key to ensuring that decision is a good one. And industry Canada statistic that entrepreneurs need to be familiar with, is that 50% of all entrepreneurs in Canada fail in business. When industry Canada asked those failed entrepreneurs the reason for their business failure, 29% of all of them said that the reason why their business failed was because it ran out of money. Business owners can avoid that reason for failure by reviewing their financial’s statements before they make any decisions.
An important way for entrepreneurs to start their business as organized as possible, is to ensure that there only creating one business bank account for their company and that bank accounts purpose is to be used for operating expenses. Typical entrepreneurs also need a credit card, and despite being tempted to get several, business owners should stick with one credit card statement. Also, Edmonton bookkeeping recommends that entrepreneurs never get into the habit of using their personal bank account for business. This is extremely bad business, and can results in very incorrect financial statements. It is much easier for bookkeepers to create the interim financial statements simply by looking at a business bank account. Trying to look at the personal expenses mixed in with the business expenses results in a long time to create those financial statements and the higher chance that they are incorrect.
Business owners also need to provide the receipts to their bookkeeper, or at least they need to provide the bank statements. Business owners do not necessarily need to send the bookkeeper every single receipt, however business owners do need to keep every single receipt for seven years, in case an entrepreneur gets audited by Canada revenue agency.
Now that I an entrepreneur knows what Edmonton bookkeeping needs to be organized and get proper financial statements, an entrepreneur also needs to ensure that they are setting aside time in their calendar to schedule sending the information to their Edmonton bookkeeping, as well as setting time in their calendar to talk to their bookkeeper. Entrepreneurs often are acutely aware that whatever they schedule gets accomplished, so ensuring that they are setting aside the time to send that financial information off is the key to ensuring that actually gets done.
If entrepreneurs set aside time to regularly talk to their bookkeeper, Bill be able to ask questions about their statements, get advice, get clarification and the bookkeeper will be able to fix errors, and explain how to use the information in the interim statements to make great business decisions, that can help business owners avoid running out of money in their business.
If entrepreneurs are not sure what the difference between Edmonton bookkeeping and accounting is, the short answer is they need both. An accountant looks after the long term finances of the business, doing the corporate year-end, as well as the yearly business planning and tax planning of the corporation. However, they bookkeeper looks after the day-to-day finances of the business, organizing it and sending entrepreneurs updated financial statements that can help entrepreneurs understand what is going on financially in their business so that they can be guided to great business decisions. Decisions such as did they need to cut expenses, generate more revenue, they have money in their business to purchase assets where do they need to come up with a plan on how they are going to do that without running into financial problems.
Business owners need to ensure that they are sending off their financial information often to their Edmonton bookkeeping. The reason is important to sent it off often, is so they can get regular interim financial statements. Many entrepreneurs wonder how often they should be hearing from their bookkeeper, and the recommendation for most entrepreneurs is to get those financial statements biweekly. The reason for that is because many entrepreneurs that pay their staff every two weeks, which is most of them need to understand how much money they have in their business before they disperse those payments. Entrepreneurs should form a habit of reviewing those interim financial statements including income statements and balance sheets before any money comes out of their bank account so that they can verify how much money they have in their business to do so.
If entrepreneurs based their financial decisions on the money that is currently in their bank account, they actually may run into financial problems. They might think they are being prudent, but is in their bank account might not be indicative of all of the money that they actually have at their disposal. If they have written several large checks, or are waiting for cash disbursements, the money that they see in their bank account is not an accurate reflection of how much money they have to use. If they see that there is ten thousand dollars in their bank account, and they want to buy a piece of a profit for ten thousand dollars, they may cause several thousand dollars of checks to bounce if they make that purchase. Instead, business owners can review the balance sheet, deceit exactly how much money they have to use after all the checks and disbursements have been accounted for. Edmonton bookkeeping says that this is an extremely important learning curve for entrepreneurs to understand when they are operating their business for the first time. By learning how to read their financial statements, business owners can learn how to make great financial decisions and avoid running out of money in their business.