Tips for setting up your Accounting System
July 1, 2009 by Justin
One of the most daunting tasks you can face when setting up a new business involves the process of establishing an accounting system. The dictionary defines accounting as “a precise list or enumeration of financial transactions”, which is a mouthful and can be translated into “a way to track money coming into and out of your business”.
Accounting does not only tell you whether or not you’re making a profit, but also helps you to track your different sources of income and categories of expenditure and make important decisions based on this information. Within your system you will compose records, including a profit and loss account, a cash flow projection and a balance sheet, which will combine with numerous other reports to give you a good overall picture of your enterprise.
When it comes to setting up an accounting system you must first pick your accounting method. This gives you two choices – either the cash method or the accrual method. The cash method is the more popular and is usually adopted by small business. This method requires you to account for your income when you actually receive it, and your expenditure when you actually pay out. If you normally take immediate payment for a product or service through a check, credit card or cash, this is the method you should likely adopt. The accrual method requires you to account for a sale when it is consummated, not necessarily when you receive the money for it. Likewise, expenses are accounted for when you actually receive the product or service. Companies that use an invoicing system use the accrual method.
Most small businesses choose the cash method as it is much easier to maintain. For example, you do not have to establish records for “accounts receivable” or “accounts payable”, but if your company exceeds $5 million in annual sales you will likely be forced to use the accrual method by the taxation authorities.
Once you have settled upon your accounting method, decide how you are going to record all your transactions. While some people choose to do this by hand, as was common at one time in our history, the majority of people choose to use software. Many different software programs exist, the most prominent being QuickBooks.
Once you have determined your method and your recording platform, set up your chart of accounts. This is simply a listing of the various categories and subcategories. Most accounting platforms use the “double entry” standard, which means that when you make one record of a transaction, you must make a corresponding and opposite record to balance out. This is a highly accurate way of compiling financial records.
It is very important to use your new accounting system religiously. It is strongly recommended that you maintain the system every week, if not on a daily basis. Obviously, the more complex your operation, the more attention you should pay to accurate record-keeping. Always make sure that you record every transaction, be it a check, a charge, petty cash, or a bill.
As the old saying goes, “garbage in, garbage out”. Be careful when entering transactions and do remember to reconcile your accounts. Reconciliation is vitally important, and again should be done on a regular basis, or you will spend many nervous hours looking for your error. At the very least, you should reconcile your accounting system against your bank statements. Always reconcile to the penny, and you will have very accurate records and will be ready to provide the greedy taxman with his share at year-end.
Have you got any other tips on managing your accounts?
Matthew Toren
Save Your Marketing Pennies - Five FREE Online Promotional Resources
June 18, 2009 by Justin
The following five FREE online promotional resources fall under the category of public relations. Companies automatically assume they need to dole out thousands of dollars to promote products and services, but that’s not the case anymore when it comes to online marketing. In these tough economic times, you can save marketing pennies by tapping into these user-friendly, online promotional resources.
Press Release Distribution Services
Utilize FREE online public relations distribution services to blast out company press releases. Because you submit your company’s press release to these services, you aren’t necessarily guaranteed publicity. However, you have a good shot if you write newsworthy press releases that catch the media’s attention. The services listed below distribute press releases to both national and local media outlets.
http://www.free-press-release.com
http://www.24-7pressrelease.com
Online Event Listings
If your company or business is planning a promotional event (such as open houses, trade shows or golf tournaments), there are many online promotional resources that don’t require a cost. Research local newspapers and magazines for free online calendar listings. The following sites are effective online promotional resources.
Blog Platforms
One of the best FREE online promotional resources is a well-written blog. You don’t have to spend any money to create an effective blog. These are some popular blog platforms that are easy to navigate. There are also free blog templates available online if you want to add color and flair to your blogs.
Professional Social Networking Sites
Sign up for FREE professional social networking sites. Social networking sites allow you to interact, network and promote your business with many people at once. The following sites also allow you to create groups or write articles – effective tools to further promote your products and services.
Article Submission Websites
Write a professional article that makes you sound like an expert in your field. If allowed by the site, add your professional bio and contact information at the end of each article. By submitting free articles to the sites listed below, you expose your company to thousands of potential new contacts and customers.
This is a Guest Post by Zeke Camusio is a serial entrepreneur, Internet Marketing expert and founder of The Outsourcing Company, an Internet Marketing agency with offices in Aspen, CO and New York. Let’s Do It!, his blog, is read by thousands of people all over the world.
Overcoming Setbacks
June 12, 2009 by Justin
We all know how rewarding owning your own business can be. The challenges are exhilarating, the success deeply satisfying. But what if you hit a major obstacle that is a defining point of whether your business succeeds or fails? Can you overcome a setback, be it a financial dilemma or a major business crisis?
Overcoming setbacks in business takes tenacity and perseverance. It means doing what it takes to save your life’s ambition and to come out of it with you and your business as stronger than ever. And it means following these 5 essential steps:
1. Believe in yourself.
Trust that your skills can overcome whatever the problem may be. Without confidence in yourself to prevail over the business dilemma, your chances for success diminish.
2. Reach out for help.
Know your limitations and when it’s time to put your trust in someone else to help you with your business crisis. There is a multitude of mentoring resources available to entrepreneurs. These current and former business owners have likely been through what you are experiencing and are more than willing to offer their expertise. Look for someone in your industry or a successful entrepreneur who has started and built their own business from scratch.
3. Take a financial inventory to determine how the business crisis may impact your cash flow or reserves.
You may need to make the tough decision to layoff staff, reduce hours, or significantly cut everyday expenses in order to meet payroll and other essential financial obligations. You might also want to notify your vendors to set up a payment plan if you are having problems meeting payment deadlines. Just know that they are temporary measures and once you overcome the setback, you can begin rebuilding again.
4. Remain upbeat and positive.
It will help you overcome the problem and reassure your employees that you have the situation under control. When possible, take some time away from the situation so you can relax and clear your mind.
5. Review your business plan.
Look for ways where you can make changes to address the setback. Evaluating your business plan will also help in establishing safeguards to prevent the same situation from occurring in the future.
All of the well-known entrepreneurs, from Donald Trump to Oprah Winfrey, have faced some form of adversity and have come out on the other end with a business venture that is stronger and more successful. As entrepreneurs, much of our experience is gained through learning and experiencing different business scenarios. It is these challenges and setbacks that make us wiser and more seasoned in our line of business.
Leave your comment on how you faced adversity and overcame the setback. By banding together and learning from real life experiences of others, we can all become better entrepreneurs.
Adam Toren
Yahoo Launches Image Help For Online Marketeers
June 5, 2009 by Justin
Yahoo is beginning to take some aggressive steps to show their value to online marketers. This no doubt will be a boom for entrepreneurs and those who make their living from Internet marketing. It’s also refreshing to see Yahoo competing to gain back market share lost to Google by carving out its own unique niche among the business sector.
Getting back to its pioneering roots, Yahoo becomes the first search engine to offer companies access to images that have been approved for modification and commercial use. Through its Creative Commons license filter within its Yahoo! Image Search, the search engine has launched a valuable tool for companies in need of photos and other images for their websites and Internet marketing efforts.
The search engine has teamed with Flickr, a leading online photo management and sharing application, to make the license search available to those who use Yahoo! Image Search. The new service makes it less of a legal and copyright hassle for companies to use images. What makes the relationship between image creators and users work are the succinct guidelines provided by Yahoo regarding approved uses of the images.
Yahoo has been on a tear of late introducing features that enhance the experience for companies advertising on the Internet. Another innovative feature from Yahoo is an enhancement to its Smart Ads program. With the new feature, companies now have the ability to customize their display ads in order to target different audiences.
It’s clear that Yahoo is listening to its core group of users and developing enhancements to keep them in the fold. It appears that Yahoo is seeking to outperform the competition in the Internet marketing arena. It should be interesting to see how Google responds to these new features that are extremely valuable to companies, in particular entrepreneurial businesses.
Since launching the Creative Commons license filter, Yahoo has received positive feedback from small and large companies. They are also seeing a jump in Yahoo! Image Search users.
What do you think about this new feature? Yahoo are fishing for your business - but will you switch from your current means of obtaining approved images for your websites and Internet marketing efforts? Leave us a comment with your thoughts.
Matthew Toren
Do User Numbers Disguise Problems at Social Networking Sites
June 3, 2009 by Justin
Following on from the last post it got me thinking that these are interesting times for social networking sites to say the least. I for one am anxious to see how Facebook, MySpace and Twitter address the revenue-generating issue.
What’s interesting about the whole social networking topic is that all of the sites attract an incredibly large number of visitors. We’re talking consistent off the chart numbers. It’s an audience ripe for any form of revenue-generating scheme. But here’s their little secret. None of them are making any money directly from their service - it’s FREE. Yes, you read that right, despite the sheer volume of users to these sites, not one of them is profiting from this traffic. In fact, all of them are losing money. So it stands to reason that sooner or later, the issue of profitability has to be addressed.
Twitter alone has millions of people following tweets, but it doesn’t make a penny on any of them. Its predecessors, Facebook and MySpace, are stepping up to the plate to compete. Facebook is in the process of adding similar real time update features to its platforms and you can bet MySpace, under the direction of Rupert Murdoch’s News Corp., will begin actively looking for ways to generate revenue.
With ad revenues far below expectations, the social networking sites need to turn inward to see how they can make money from their own platforms. There’s no denying that Twitter, Facebook and MySpace provide value. The next step is to create a pricing structure based on this value.
In Twitter’s case, its creators have even greater options. They could either sell out to the big search engines or sell their infrastructure to other sites who want to build off their technology.
The popularity of these three social networking sites is testament to the creativity of their creators. They have taken the mainstream by storm. But one has to wonder how long it will be before others move into cyberspace with the next version of social networking. That’s why it’s critical for Twitter, Facebook and MySpace to start generating revenue. Any further delays could cause them to lose dedicated users and their niche in the social network arena.
With Twitter, Facebook and MySpace, their continued success comes down to two key questions: How much do you value social networks? And how much are you willing to pay for this value? Use the comment link to respond.
Matthew Toren
