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Yes, Quickbooks is meant to simplify accounting functions to enable anyone to use it. However it is amazing just how big of a mess you can end up with if you don’t understand basic accounting principals.
This is a true account and not a hypothetical situation of what can happen when your day to day transactions are not recorded correctly.
Lots of businesses have bookkeepers but if you really want to grow your business, you need to tell them to pack up their general ledgers and hit the bricks!
Okay, I might be incurring the wrath of bookkeepers everywhere, so let me explain myself before an angry mob of them come knocking on my door with torches, pitchforks, pencils, and calculators.
Bookkeepers ARE valuable to have a in a business. But the function of bookkeepers is largely administrative. They may manage your receivables and payables; they may manage your income statement and balance sheet; they may manage your payroll… and without those functions, your business would not run.
But here’s why I suggest that you fire them: Read More »
It takes a lot of work – as well as some risk – to get a business off the ground. The risks include things like getting enough money to run the business, extending credit to customers so they can buy now and pay later, and buying things you can use to help your business grow. These risks are necessary but they can also hurt your business. In a previous blog post we listed these three financial challenges and explained them briefly. Today, we’ll give some ideas to manage them and remove some of the risk.
Running a business can sometimes feel like running through a minefield. You try to get to the other side and do your best but you live with the fear that every step will bring a new disaster. Survival comes from knowledge and the best way to navigate the difficult world of business is to know exactly where the financial pitfalls will be.
Businesses that face financial problems typically face them from 3 specific areas. In this blog post we’ll outline what they are and in the next blog post we’ll give you some ideas to manage them.
Unless you get money from customers up-front before you give them the product or service they purchased from you, you will likely get shafted now and then from customers who will never pay.
In spite of your best efforts, these receivables end up getting older and older and you realize that you will never collect from them. Everyday people might call this “hopeless” but in accounting lingo, it’s called “bad debt“.
It’s tempting to just ignore your bad debt. (Hey, no business owner wants to be reminded of a customer who pulled a fast one on them). Unfortunately, doing that will artificially inflate the assets on your balance sheet while also misstating your profit.
But you do need to do something with these numbers! Here’s what to do:
