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10 Do's And Don'ts For Small Business Practices
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Written by: Janis Vargas
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Word Count: 478 |
Date: Wed, 26 May 2010 |
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If you're not prepared, managing your business can be very challenging indeed. That's especially true of small business accounting. As small business accountant professionals, we have put together a list of 10 things you should be doing, and 10 things you shouldn't be doing.
10 things you should be doing
1. Learn the basic concepts of accounting, like the difference between a balance sheet, a profit and loss statement, and a cash flow statement.
2. Hire a small business accountant who is going to be familiar with your industry to manage the financial assets of your business.
3. Figure out what accounting and billing software programs work best for your business, and then use them.
4. Update your spreadsheets for cash flow control at least monthly, but preferably weekly.
5. You should have internal controls in place whereby you know that your business has received all of the income you have coming. If you don't how to do this yourself, hire someone who is a small business accounting professional to help you
6. When you first start, your business is likely to be small; because of that, you can probably manage your own bookkeeping tasks. Do this if you can so that you can learn how bookkeeping works, and how to manage the finances of your business (even if you have to turn these tasks over to someone else later once your business grows).
7. Make sure you prepare financial statement at least once a month.
8. Reconcile your bank account immediately when your monthly bank statement is received.
9. Do keep personal and business financial records separate
10. If you do payroll and payroll accounting, outsource these jobs to a professional provider of these services
Top 10 "should not's for small Business"
1. Never overestimate your sales projections or underestimate your expense projections.
2. Don't wait until the last minute; establish credit resources BEFORE you need financing.
3. Don't put your personal and business assets together.
4. Don't hand over control; make sure you retain the authority to assign all of your checks, and DON'T delegate this job to someone else.
5. Don't use money withheld for payroll taxes or sales taxes for other purposes.
6. Don't pay an invoice until you've matched it to the purchase order in question
7. Don't delegate cash flow projections analysis.
8. If you hire a small business accountant or lawyer to help you handle the financial end of your business, don't ignore the advice they give you.
9. Verbal agreements are fine, but get everything in writing, too -- including purchases.
10. Never assign to others your relationship with your lending sources.
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