If you run a small business, you want to be spending your time thinking about how to make your business grow – not being buried by paperwork. Using the four small business accounting hacks below, you’ll be well on your way to streamlining your accounting operations and driving tremendous results for your company.
HACK #1: Understand your company’s margins
Too many small business owners focus only on sales and revenue. If a business is selling a lot of product, it must be good news, right? Well, maybe. A lot depends on the margins of your products. In other words, if you’re spending $99 to sell a $100 item, that’s not the best use of your company’s cash flow. You’re not going to be a successful business with razor-thin 1% margins.
Your net profit margin is a simple calculation: (Revenue – Expenses) / (Revenue). In layman’s terms, your net profit margins tell you how much of each sale you’re actually making as pure profit. Knowing your margins can help you focus your energies on business activities that are going to drive tremendous results.
HACK #2: Get into the cloud
Just as all of your music and photos are stored in the cloud, it’s also possible to store all of your company’s accounting information in the cloud. Rather than using accounting software that you manually install on a computer – try using the latest generation of cloud-based accounting software.
There’s a good reason why this is so helpful – it means you can access your company’s information from any device, no matter where you are. In other words, you can check on your company’s operations at any time using your tablet or smartphone and get a real-time sense of where you stand at any point in time.
HACK #3: Lower the cost of each financial transaction
Chances are, you’ve set up a separate small business banking account. But are you aware of how much you’re being charged for each transaction? If you want to squeeze the greatest value out of your business, one easy accounting hack is to lower the cost of each financial transaction. It’s the reason some small businesses are exploring alternative financial providers like PayPal – it’s a way to make each transaction less costly.
Now’s the time to reassess your financial relationships. Just like you’d reassess how much you’re paying to a credit card company, you can also reassess how much you are paying for any financial transaction as a small business.
HACK #4: Make taxes a year-round issue
Ok, sooner or later we had to mention taxes, right? Most small businesses make the mistake of trying to cram all their tax work into a very concentrated period of the year. Instead of hunting around for documents during the busiest time of the year and missing out on some important deductions, why not make taxes a year-round issue? By getting used to the habit of good recordkeeping, you’ll be well ahead of the curve come tax time.
These 4 accounting hacks should help to streamline your company’s accounting workflow. By getting as much information into the cloud, it makes it much easier to collaborate with other team members. By getting into the habit of good recordkeeping year-round, you can make tax season as painless as possible. And by constantly looking for ways to make each transaction – no matter how tiny – as efficient as possible, you can literally create additional cash flow overnight!
** Born in Little Rock, Arkansas, with corporate headquarters in Grand Prairie, Texas, Lorra Brown is a multi-faceted business strategist that works with a plethora of clients around the country. As the CEO of LBE Consulting, PLLC, Author of Entrepreneurs New Business Kit and recently CFO for Dr. Tony Evans; she provides accounting services and business consulting to a diverse bed of self-employed professionals.
Having early on recognized the specific accounting and tax needs of female business owners, she was inspired to develop her consulting company as the ultimate solution. She has since garnered a wealth of f emale entrepreneur clients, and become widely known as both a thought leader and leading authority in small business accounting and tax. She’s also shared much of her insight through a number of guest speaking opportunities and editorial contributions to various media platforms.
Whether hearing her speak or reading her words, people are immediately engaged by Lorra’s experiences in and perspectives about finances, women entrepreneurship, small business accounting, and tax resolution.
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