MY BACKGROUND Certified Public Accountant (CPA) Certified Information Technology Professional (CITP) CPA specializing in technology Owner of Beyond Financials Consulting, LLC Provide Accounting, Tax, and Consulting services to small businesses. Focus on accounting technology & virtual CFO Services Early career with Fortune 500 companies implementing accounting & finance software solutions. Bringing that know how to the small business owner.
WHAT I SEE EVERY DAY Very smart entrepreneurs with no insight into their business finances. Struggling with cash flow because they dont know how to manage it. Running their business with no idea if they are profitable. Only knowing their bottom line at tax time.
MY APPROACH Train small business owners on how to manage their finances. Use technology to keep things organized and make life easier. Review the numbers on a monthly basis. Regularly discuss the current state of the business and future plans. Be proactive instead of reactive.
6 KEY STEPS Separate business & personal spending Record everything Use accounting software Get paid as quickly as possible Reconcile your bank account Be consistent
SEPARATE BUSINESS & PERSONAL Legal ramifications for co-mingling business & personal expenses. Not going into here. Need to separate to ensure a good understanding of business cash flow and profitability. When you take money out of the business for personal expenses, it is not an expense or a write-off. It is simply depleting business funds. Need to learn and understand the difference between business and personal expenses. There is a lot of confusion here. Need discipline to start and keep doing this correctly.
RECORD EVERYTHING Every invoice Every receipt of $ Every expense that hits your bank statement – (e.g. fees) Garbage in garbage out Record it timely
USE ACCOUNTING SOFTWARE No double entry of info Able to automate a lot with technology – bank downloads, online invoicing, recurring transactions Ability to generate financial statements and other important reporting All in one – customer invoicing, vendor bills, payroll, banking information Will enable you to have the best picture of how the business is doing
GET PAID AS QUICKLY AS POSSIBLE Use Online Invoicing Speed Enter in your software and generate an e-mail to the customer. Saves days in the process by not sending via mail. Closely Manage your A/R Reduce terms – it is rare to gives 30, 60, 90 days anymore Software records when an invoice e-mail is opened, lets the customer add comments, and sends reminders. Invoices are not getting lost on a desk. Comprehensive outstanding A/R reporting for easy follow-up Accept Online payments Money is in the bank faster Software provides link to payment gateways – Pay Now buttons Recurring Services? Get approval to directly debit their bank account or credit card.
RECONCILE YOUR BANK ACCOUNT Need to capture everything Apply deposits to invoices Record bank fees Record transfers Find mistakes Use bank download technology to make it easier
BE CONSISTENT Nothing worse than needing to catch up Allocate time to accounting on a weekly/monthly basis or hire someone to do it Stay in control
SOFTWARE OPTIONS QuickBooks Desktop Hosted QuickBooks QuickBooks Online Xero Freshbooks Options in the Cloud
THE CLOUD Push towards the Cloud Internet software that can be accessed from anywhere. Easy to connect software apps to meet your needs. Accessible via the web, tablet, smart phone Constantly releasing new enhancements This is the trend
QUICKBOOKS QuickBooks Desktop Most well known Can handle all small business needs Setup is critical. If it is setup wrong, your accounting will be incorrect. Best for a business with a dedicated bookkeeper or detail oriented owner Pro, Premier, Enterprise – versions can handle small to mid-size biz Still the best option for manufacturing, retail, and distribution businesses Use direct connection to banks to avoid double entry. Files have to be sent to the accountant or the accountant has to login to your computer. Purchase a software license for a specific yearly version. Upgrades required every two years as product support expires.
HOSTED QUICKBOOKS Hosted QuickBooks Desktop QuickBooks loaded onto remote server - accessible via the internet. The user is accessing a desktop in the cloud and can use the full version of QuickBooks. Accountant can access this cloud desktop also. Right Networks, Cloud9, InSync plus other vendors Can be expensive – Paying a monthly fee. Need QuickBooks, but want to work in the cloud, a hosted solution is a great option.
QUICKBOOKS ONLINE Service businesses Light inventory requirements Online invoicing Invoicing via the app Bank downloads Not like QB Desktop, so need to understand differences if looking to switch. Intuit is focusing here Monthly subscription fee
XERO www.xero.com Called beautiful accounting software Easy to use, visually appealing interface. Online invoicing with a link to PayPal & some new options Invoicing via iPhone and iPad apps Bank and PayPal feeds into the software daily Easy to use dashboard showing cash balance, A/R and A/P Can use add-on software to get more functionality Monthly subscription fee
FRESHBOOKS www.freshbooks.com Great invoicing software Perfect for service businesses that need to bill back for out of pocket expenses Great integration with Xero Invoice in Freshbooks Accounting in Xero Online invoicing with a link to various payment gateways. Monthly subscription fee
BENEFITS OF ACCOUNTING IN THE CLOUD Anywhere anytime access Real-time information Better collaboration with your accountant. Very regular software releases to make improvements Easy to integrate applications – use the best in breed and link them together – invoicing, scheduling, inventory Online invoicing / Invoicing in the field Lower up front costs No need to backup date. They do it for you.
WHO IS USING Cloud Web Developers Creative Agencies Consultants Financial Planner Cleaning Service App Developer QuickBooks Desktop Retailer Distributor (Traditional and eCommerce)
WHAT SOFTWARE IS BEST FOR YOU? Type of business Who is doing the bookkeeping Number of users Where are users located Security required around user access/roles Complexity of accounting requirements Cost Assess software based on your specific needs
MANAGING AND GROWING YOUR BUSINESS WITH REAL-TIME ACCOUNTING INFORMATION
REAL-TIME BUSINESS INFORMATION Following the 6 KEY STEPS can get you here… Real-time information to manage your business.
MANAGE YOUR BUSINESS Benefits of real-time information can only be realized if you implement the 6 KEY STEPS Control over Cash Flow Cash balance, Money in, Money out – What is left? Can you cover your overhead? Can you pay yourself? Longer term - Is there cash available to invest in the business Focus on Profit – Are we making money? Less stress at the end of the year Peace of mind because you know where you are
GROW YOUR BUSINESS What are your goals? How can your reach your goals? Good information to make informed decisions. Get your business to the next level by understanding where to invest time and resources Without good financial information you are guessing and running blind. Understand results as a whole and then drill down to the next level of financial detail Learn to understand your numbers and develop growth strategies that can be supported by the numbers.
GROW YOUR BUSINESS Break down the business and analyze what is working and what is not Look at profitability: By Month – Is there a trend, is there seasonality? Year over year – Has performance improved? Are we spending more money is a specific area? Versus an annual budget – Are we going to reach our revenue and profit goals? By project – Was a project profitable? By product – Which products are most profitable? Top selling? By service – What service offerings are most profitable? Top selling? By customer – What is our customer mix? What type of customer generates the most sales? If you arent making money doing something, why are you doing it? I see a lot of people spinning their wheels You should have access to this type of information at any time.