Successful Blog

Is Your Business Coming up Short in the Cash Department?

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Man using scissors to remove the word can't to read I can do itRunning your business might seem at times like more challenges than it is worth.

That said always remember why you likely got into business in the first place.

For many business owners, it was to grow something they created, allowing them to be their own boss and make some money along the way.

Ah, the money part.

In many instances, it is the lack of money that leads one to have to close down their businesses sooner rather than later.

So, take a look at your business operations to see if you’re in fact coming up short in the cash department.

Meet Financial Challenges Head-on

So that you can meet any financial challenges head-on, remember these tips in running your own business:

  • Don’t get in over your head financially – The biggest risk one takes in starting and running their own business is getting in over their heads financially. As an example, someone wanting to open a small eatery takes out a significant loan, not to mention taps into some of his or her savings, perhaps even gets family or friends (see more below) to invest in this dream entrepreneurship. In doing so, they must hope that the establishment does well sooner rather than later. In the event it does not, they could find themselves in severe financial difficulties and not even turn a profit along the way. If you are in need of fast cash for your business, it is important that you check around to see which establishment will give you the best deal, that is a deal that does not leave you handcuffed when it comes to your overall financial health. In the event your business is doing well and it might be time to expand, the same rules of commonsense apply when seeking cash. Always make sure you do your research before settling on a financial establishment to provide you with the cash infusion your business needs;
  • Family and friends – Some soon-to-be or struggling small business owners are inclined to turn towards family and/or friends for a financial investment in their business at some point. So, is this a smart or bad decision to make? On the plus side, you know where the money may be coming from. There is also more likelihood that someone close to you is not going to charge you an arm and a leg in possible interest fees. On the down side, there is always the possibility that such a financial arrangement could curtail a close relationship in the event things go bad and/or you are slow to pay them back the money they loaned or invested in you. Even when it is someone close to you, be sure to draw up an official contract when an exchange of money takes place. In doing so, you acknowledge that the person or persons have loaned or invested money in your business, just as a financial provider would be doing. If something goes wrong, it is imperative that those who helped you get all of their money back;
  • Recognize red flags and react – Finally, just about every small business goes through some ups-and-downs along the way. That said it is important that business owners know what red flags to be on the lookout for. A nosedive in the overall economy can be the first harbinger of bad tidings to come. Keep in mind that when the economy heads south, consumers typically have less money to spend. With less money to spend, they are less inclined to go on buying sprees. For example, if your small business is running a small eatery, one of the first things consumers typically cut back on when the economy is down is going out to eat. Another red flag is when food prices start to going up rather quickly. Lastly, if your health insurance costs to cover you and your employees suddenly explode, this can be another sign of trouble on the horizon. Always keep your ears and eyes focused on the overall economy and what is happening in the real world.

Running a small business is one of life’s greatest dreams for millions of people.

If you are one of them, do you have the business savvy to make your cash flow?

Photo credit: BigStockPhoto.com

About the Author: Dave Thomas covers business topics on the web.

Accounting for the Right Business Software System

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As a business owner, the chances are you’ll have to wear many hats.

One of them will most certainly be that of an accountant. Even if you have a dedicated accountant, you’ll still need to stay on top of the cash flow in your business.

Choosing the right accounting software can help you do just that, but how do you go about finding the right accounting software for you?

Why Does Accounting Software Matter?

Cash flow problems are one of the leading factors in business failure.

The right accounting software can help you to keep a much better handle on your cash flow, and help prevent problems later. Even basic accounting software means you can keep track of what goes in and comes out of your business, so you can see at a glance where your money is flowing.

That means you can see any areas where you are over spending, and where your strongest sources of income are, which all adds up to being able to see if your money is being spent wisely and well – a must for any business.

Software programs are available to help you with every aspect of accounting in your business, including inventory, tax reporting, budgeting, keeping track of sales, payroll capabilities, and sales forecasts.

For businesses that are able to invest a little more, industry specific software is available, with the cost usually including installation and a demonstration by a vendor.

How Do I Choose The Right Software?

To help you choose the right software, take some time to think about what you want your accounting software to do for your business. Which tasks do you need it to do?

Remember that software is a wonderful tool, but it doesn’t do the work for you – you still need to understand and input the raw information. As such, it’s important to consider which features will support you in working with the software.

It’s also important to consider the flexibility of the software – making the wrong choice now could cost you in the future, so allow for some future planning.

How would you like your business to grow? What would your software need to provide in order for it to be a good match in the future? Can the software be expanded if necessary, perhaps by upgrading to a more advanced package?

If you have an accountant or accounts department, take time to talk to them, and anyone else who will be involved in using and implementing the new system. The internet is also wealth of information and reviews; while specialist sites or software consultants can help you make a decision.

How Much Should I Invest?

Accounting software varies in price from a few hundred dollars to thousands.

In general, programs that you buy and use “as is” tend to be cheaper, as do packages with less functionality. On the other hand, more feature rich packages and industry specific packages tend to run higher.

To make the best choice for your business, take the steps suggested here to figure out what you need your software accounting to do for you. That way, you won’t end up with software that doesn’t meet your needs, or overspend on software that has features you don’t need.

Once you have your needs clear, you can search for software that meets them, and compare to find the most cost effective solution.

Good accounting software is an important investment for your business, saving you time and also paying for itself in terms of helping you control your cash flow.

Take your time, do plenty of research, and you’ll be able to invest in a tool that supports your business.

Photo credit: tedcor.com

About the Author: Tristan Anwyn is an author who writes on subjects as diverse as health, marketing, business, and SEO.