02.08.2013: Cashflow Tips
#5 Not keeping a cushion of cash on hand
No matter how many safeguards you have in place to protect your company's cash, hiccups in cash flow are a business reality. This may be no big deal if you have a cushion of savings on hand. But if your company is working from a zero account balance, one slow sales month could mean instant disaster.
To safeguard your business from cash-flow issues, maintain an account balance equivalent to at least two months of operating expenses. That way, even if you experience unexpected stalls to cash flow, you have reserves in place to protect yourself.
Cash-flow issues are one of the greatest challenges of business ownership. But if you stay objective about your business, rein in unnecessary spending and stay alert to potential pitfalls, you'll be head and shoulders above your business peers in your potential for long-term business success.
08.06.2013: Process Tips
#1 Don't procrastinate
One of the biggest mistakes that new entrepreneurs make is that they put off their bookkeeping needs. If you aren't financially-minded, programs such as Quickbooks can make small-business accounting seem completely unmanageable, especially if all you need to do is send out a few invoices and track a few expenses.
The problem is, of course, that if you put off your accounting work, it doesn't go away. It just gets bigger, and eventually you're going to be faced with an overwhelming mess that you'll need to sort out. The bigger the mess, the more you're likely to procrastinate.
Fortunately though, small business bookkeeping is actually very simple. If you break everything down into small categories — categorising expenses, paying employees, sending invoices — the whole thing becomes much more manageable and the compulsion to put it off lessens.