The lifeblood of any business is Cash flow

cash

A business may be profitable, but without cashflow, it won’t survive. Sales and profits don’t necessarily coincide with their associated cash inflows and outflows. Your clients may experience all the sales in the world, but if cash receipts lag, the business might experience a short-term cash shortfall. This is why it is essential to forecast cash flows as well as project likely profits.By offering your clients advice that will help them increase their bottom-line profitability and fiscal health, you’ll be in a better position to grow your Bookkeeping and Accounting business. Let’s take a few minutes and talk about what cashflow is, how to forcast it and control it.

Cash flow! Cash flow! Cash flow!

In his book, In the Black:Nine Priciples to Make Your Business Profitable, Allen Bostrom-President of Universal Accounting Center, says, “Cash flow is the lifeblood of business. For new businesses, immediate cash is needed to create future cash flow. The first time the payroll is missed, you will know exactly how bad it is to be short of cash. How do you know how much cash to have in the business? Keep a check register. Call the bank! They can tell you very quickley. By the way, your accounting system should be able to match what the bank says. This needs to be the first place for improvement.”

Having cash is not the only answer. Iit needs to be the right amount of cash. Enron had millions of dollars in the bank, but they still were still forced to shut down. Having enough cash to meet this months financial obligations isn’t enough. Mr. Bostrom goes on to say, “Cash anyalysis is more than a current, monthly calculation.”

How do I calculate cash flow?

Althogh most cash inflows to small businesses come from sales, loans and interest earned, the biggest cash inflow is coming from sales income.Cash outflows include payments to suppliers, payroll, and interest payments on loans or in other words, paying the bills.Net cash flow is the difference between the inflows and the outflows. A positive cash flow would indicate that the business was healthy enough to have more than enough cash to pay the bills. Just as a negative cash flow would indicate the need of additional cash to pay the bills and keep the business healthy.

Cash flow planning is crutial to the health of your client’s businesses as well as your own Bookkeeping and Accounting Practice.

Forecasting and totalling all significant, regular cash inflows relating to sales, bank loans, interest income and other income and then analyzing in detail the projected needs and timing of cost of goods, payroll and other payments is what cash flow planning entails. The more detailed the anaylisis, the better the information is for the business owner. When this net cash flow is added to or subtracted from the opening bank balances, any likely short-term shortfalls can be projected and planned for.As you can see, accurate accounting records are very important in this process and put the bookkeeper/accountant in a position to really impact the fiscal health of any small business. As the provider of this information to your clients, you become a more valuable to them.

How do I control cash flow?

Mr. Bostrom offers five suggestions to help you manage cash flow.

1) Even in small businesses, establish separate accounts for business and home. “It’s too easy to intermingle funds, and spend the cash for personal reasons, when it is needed to pay business debts. Profitability does not reflect cash-this could be called the ‘High Profit-No Cash’ syndrome.”2) Manage your cash appropriately. “You can have too much cash in your business. Cash is an asset that should be working at all times, gaining interest.”3) Businesses should work within budgets–leaving some cash in the bank at all times. “Work with your vendors so that your cash account does not fluctuate with highs and lows but is somewhat consistent through the year.4) Every new business owner should expect to invest at least 50% of necessary capitol into the company. “This lessons the amount of cash that will be needed from other costly sources.”5) Leverage money effectively. “When you start a new business, you will usually receive unfavorable terms from vendors… After establishing a good relationship with your vendors, ask them to extend your credit to 60 days, and eventually to 90 days.”

If you are interested in additional ways to control cash flow, click on the link below and download an MS Word document with a checklist for improving cash flow.

Cash flow is King.

My dad used to always say, “Cash flow is King.” Cash flow may be king, but with the right information and planning, you can control him. Managing cashflow is just part of the financial picture a qualified bookkeeper/accountant counsels the business owner about. There’s never been a greater need for trained and qualified bookkeepers and accountants than right now. Businesses are more than willing to pay for the advice and skill of a professional who can save their business money. As you provide this type of analysis to your clients, you become and asset to their business, not an expense. Best of all, there’s never been a better place to find that traing than Universal Accounting.The Professional Bookkeeper Program has everything you’ll need to know to help your clients strengthen the financial health of their businesses and will also provide the income and lifestyle that you might be looking for. But that’s not all, with access to some of the most innovative and effective marketing methods found anywhere, methods that have been proven successful time after time, you will be one of the extraordinarily happy. Simply follow the link below for more information on the Professional Bookkeeper Program.Click here to learn how to take the first step towards a successful career in Bookkeeping and Accounting.

A Great Deal On the Most Complete Small-Business Accounting Training Available Anywhere!

Having a solid understanding of the Accounting and Bookkeeping methods and procedures is a great first step in learning the concepts behind Financial Business Analysis. You will learn to do books for small to mid-sized companies and how to analyze the books to prepare reports. You will learn to interpret reports so that you can advise your clients how to reduce costs and to better understand their financial standing and profitability. Your clients will look to you as an invaluable source of information about the financial health of their organization.

If you are considering adding Tax Preparation and Planning to your Financial Services business at some point, you get a great price by purchasing both programs as a bundle.

How to Avoid the Five Most Common Mistakes Entrepreneurs Make

Seize the Great American Dream of Owning Your Own Business

I know people who won’t work for anyone but themselves. They find owning their own business not only very profitable, but also very satisfying. Some of them describe it a lot like being a parent and watching a child grow. It might not always be easy, but they wouldn’t trade it for a million dollars.Starting a business provides challenges, but if you know upfront what makes it easier, you’ll find the satisfaction of watching “your baby” grow into a thriving business. A business that will provide the type of income you and your family are looking for.Entrepreneurs make 5 common mistakes that make it difficult for their businesses to succeed. Let’s talk about what they are and how to avoid them.

1.Examine the Three “Ts”- Time, Temperament and Talent. Be honest and assess yourself. If you work a 60-hour a week “day job” and coach little league while volunteering on the PTA Board, you might not have enough time to start your own business. Most business ventures begin part-time. You have to be realistic about how much time you can devote to your new business. You may need to let someone else take over the little league team and the PTA.Sometimes it’s hard to evaluate our own temperament. “I’m always logical and reasonable; surely I can start my own business.” Sometimes friends and family are in a good position to help evaluate us. Listen to their advice and comments, but realize that having weaknesses isn’t always a liability if you are aware of and compensate for them.Before you start any business you need to make sure that you have the expertise and tools that will be required. To start a bookkeeping and tax business, you’ll need to make sure you have the right education. The Professional Bookkeeper Course will teach you everything you need to know to do the books for small businesses. But we’ll talk more about that later.

2. Find Your Market Niche.The key to a successful business is to find a need and then fill it. The need for skilled and qualified bookkeepers has never been greater. Over 500,000 new businesses start-up in the United States every year. All of these businesses require a bookkeeper or accountant, someone who can be their profit expert. From the flower shop down the street to the bike shop around the corner, they all must do accounting. In fact, it’s the law.

3. Make Sure You Have Enough Capitol. Many wonderful businesses have eventually failed because they didn’t have enough capitol to operate. That doesn’t have to happen to you. Fortunately, a bookkeeping or tax practice doesn’t require a lot of capitol. You can operate your business out of your home, (which is what we would recommend, even for seasoned professionals). With a good computer and some office supplies, you’re ready to go.

4. Break That Corporate Mentality.Operating a small business isn’t the same is the same as working in mid-level corporate America. You won’t have the same resources that large corporations do. You will be your own secretary and you will probably answer your own phone. The corporate mentality is, “Do your job.” The entrepreneurial mentality is, “Do whatever needs to be done.” There may be a big difference, but the personal and professional rewards are great.

5. Don’t Underestimate the Amount of Work and Passion Required.If I told you it would be easy, you wouldn’t believe me anyway. It will take some effort. You’ll have to work hard, especially in the beginning. But the return is well worth it. I have met many people who have not only found success in their bookkeeping and tax practice by earning a better income, but they’ve been able to semi-retire after 12 months. They now work 20 hours a week and make $4000 to $5000 every month. They spend time with their family and do the things they want to do.

The US Bureau of Labor Statistics and Robert Half International, the largest accounting placement agency in the world, reports that the field of bookkeeping and accounting will continue to offer more and more opportunities to people like you and me. The accounting field has always offered a stable income. And now it’s offering you a wonderful business opportunity. If you have the passion to create the kind of lifestyle that you and your family deserve and are willing to work to get it, you will find a professional bookkeeping and tax practice to be incredibly satisfying.

The Education and Skills You Need to Start a Successful Bookkeeping and Tax Practice

At Universal Accounting, we’ve taught small business bookkeeping and tax accounting for over 25 years. Since 1979, the Professional Bookkeeper Program has provided the most comprehensive small business bookkeeping and accounting course you can purchase anywhere. And that includes any franchise you can purchase. (A franchise, by the way, could cost as much as $80,000 to start. That’s 53 times as much as the Professional Bookkeeper Program.)You don’t need a college education to run a very successful bookkeeping and tax practice. You do need some specialized training and skills, skills that you will learn in the Professional Bookkeeper Program.

It Doesn’t Stop With Your Purchase of the Professional Bookkeeper Program

Once your course arrives, you’ll not only have the finest distance learning educational materials available, you’ll have a personal coach who keeps you on track each and every step of the way. Your coach will help answer questions and offer encouragement to help you achieve the most out of the Professional Bookkeeper Program. At Universal Accounting, we don’t succeed unless you do. Our commitment to you extends through the first 6 months following your completion of the course. To make sure you get your new professional bookkeeping service on its feet and thriving, you’ll continue to have access to your personal coach to answer questions regarding your clients and their books and help finding and keeping new clients.Universal Accounting has some of the most talented marketing professionals in the accounting industry to help you succeed. And they are waiting and available to help you for the first 6 months after you’ve completed your course. (This additional level of support is provided at no additional cost.) I don’t know of any other course anywhere that provides the level of support after you’ll receive after enrolling in the Universal Accounting Professional Bookkeeper Program.

5 Small Business Do’s and Don’ts

A Marketing Tool you can pass on to current and potential customers

Note: We’re all about driving business into your doors. The following article is a marketing piece that you could use when you are out “beating the streets” for new clientele. This is also good to have available for networking opportunities that you can attend. It is designed to be able to give something of value to those you are talking business with, to give you a natural in with the potential customer and to make that cold lead warm up to you as quickly as possible. One through four should provide you with some helpful tips, but ultimately we hope it works as an effective marketing tool. Not only will it provide potential clients with practical information, but it’s a good way to introduce the value of your services (see number 5). Copy and paste this piece onto your computer, delete this “note,” and make sure you add your contact information at the bottom. Could possibly put this on your letterhead for a touch of flair and professionalism (especially if you have a color printer). Then hand out copies to small business owners and use it as a follow up call to getting in the door.1. Charge what you’re worth.First you need to do your research to see what your competition charges. And based on that knowledge, charge what your products and/or services are worth. Sometimes small business owners feel a little self-conscious about their fees; never compromise your value in order to get business.

Do: Communicate the value of your services.Don’t: Be apologetic and tentative when talking about fees.

2. Be visible.Often small business owners are not as good at PR as they are with their business specialty. But that’s no reason to become a hermit. As awkward as it may feel, you need to get out there and be both seen and heard. Attend community functions, meet your costumers, and spend time socializing; the more you interact with others, the greater your networking opportunities. Remember, everyone is a potential costumer.

Do: Make appearances and talk about what you do.Don’t: Be pushy and overbearing.

3. Be Helpful.Small business owners can live or die on one account or customer. By keeping the business “Golden Rule” you will be able to capture the big sales with the little sales. There’s just something about knowing you have had a positive effect on those you do business with everyday.

Do: Make each interaction with customers the best one they have had.Don’t: Be arrogant and unresponsive.

4. Have a marketing plan.Remember Field of Dreams? If you build it, they will come. When it comes to your business you have more in common with Costner’s character than you might think: If you publicize, they will purchase. You need to get the word out in order to get costumers through your front door, because without costumers, you won’t make any money. Assign yourself a marketing budget and

Do: Research marketing methods that work for your particular business niche.Don’t: Spend lots of money on an unproven marketing technique.

5. Hire an accountant or bookkeeper to help with your finances.More than 50% of small businesses fail, and the majority of those failures can be attributed to poor financial management. Why draw yourself away from what you do best: producing your product. You may think that you’ll be saving money by doing your own accounting, but the truth is that a good accountant will save you money, and possibly your business, in the end.

Do: Find someone who will do more than just keep your books; find someone who knows how to make your business more profitable.Don’t: Be cheap.

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Know the Accounting and Bookkeeping business from the ground up! In Universal Accounting’s Professional Bookkeeper’s training you will be able to hit every facet of success in the business. Knowledge, Production and Marketing! You’ve waited long enough to make the move to getting for your future the difference between success and mediocrity. The easiest decision you can make is enrolling in The Professional Bookkeeper’s Course. Make the difference in success, the PB designation, work for you. Don’t delay!