This product in the past was introduced by Great Plains as Small Business Manager and currently it is part of Microsoft Dynamics family of ERP products. SBF is in essence scaled down version of Great Plains Dynamics with DYNAMICS.DIC - Dexterity written business logic dictionary. Current version is 9.0. It also has FRx reporting, version 6.7 is distributed with latest SBF. As Small Business Financials is for small businesses, it is often common that they do not upgrade to the new version and even skip one or two versions. In this small article we will consider upgrade scenario from version 6.0 to 9.0:
1. Microsoft SQL Server or MSDE version. If you are on 6.0, you may already be on SQL 2000. Version 9.0 could be hosted in SQL 2000 as well or you may consider after upgrading SBF to 9.0 also update MS SQL from 2000 to 2005
2. Intermediate version 7.5. We recommend you to stick to upgrade path via version 7.5 as in our opinions it was very solid and bug free versions of Great Plains Dynamics. On the Server, insert CD of SBF 7.5, and select install Multi-User Server components. Be sure to make a backup prior to upgrading, plus print out major reports: balance, P&L, AR and AP aging - we recommend you to compare it with the same after upgrade reports
3. Continue toward version 9.0. You do not need to enter 7.5 reg key, assuming you have them for version 9.0. Version 9.0 installs into standard path on drive C Program Files: Microsoft\Small Business Financials
4. Modified Reports. These are stored in Reports.DIC file. SBF Utilities will offer you to upgrade modified reports. Please know that not all the reports could be upgraded, some of them need to be rebuilt or re-modified.
5. FRx upgrade. It is similar to FRx for Microsoft Dynamics GP. You again should be aware about ODBC connection, data tables in Dynamics database as well as know the role of sysdata folder, where FRx configuration files reside
Small business financial software is an essential tool for running any small business. It's what you need to keep all your records up-to-date so you stay out of trouble with all the various government "partners" you have. But even more, the right software is a tool to better manage any business. How do you pick the right product for you though?
What do you really need?
You can get software that'll do just about anything. Beware that somebody may sell you a whole lot more than you need. Why is that a bad thing? More powerful software is harder to learn and harder to use. You need a tool that will do what you need done, but you don't need too much power. Spend some time looking at what your real needs are. Nobody can answer that question better than you can.
Is there a standard solution?
Several leading companies sell software packages by the thousands. They're proven in the real world and you're not forced to help develop them. Think Microsoft, Quicken and Peachtree. Not only do you get proven solutions, there are all kinds of experts around on these best-selling accounting software packages. Help is readily available at local accounting firms. Get a software package that nobody has heard of and you may be in trouble.
Can you upgrade?
Start with a simple system and you may want more powerful software at some point. Some program offerings have no upgrade version so you're stuck with moving to a completely different package. Other packages have a more complex version that operates much like yours. That's a huge advantage, being able to upgrade without completely starting over with learning and training.
Remember when choosing small business accounting software that you plan to grow your business. Get software with an upgrade. A standard software package may be just the solution you need. But make sure that what you choose has the features you need. Then the tool you get can help you stay out of trouble while you grow your business.
SBF is part of Microsoft Dynamics GP family of ERP application, in the past this product was introduced by Great Plains Software as Small Business Manager. This application was originally initially created from the same code base as regular Great Plains Dynamics and so it is Great Plains Dexterity coded with the options if being modified in Microsoft Dexterity
1. SBF Support. User training is relatively simple in Small Business Financials and often users are reading the manual and discover the system on their own. Security model is also straight forward. Real support needs are typically related to data repair on SQL scripting level. You can also use traditional for GP data fixing technologies as check links. We recommend you to use consultant or programmer who could quickly help you via web sessions or remote desktop connection, meaning that these people do not have to be local
2. Version update. In comparison to Microsoft Great Plains Dynamics GP, Small Business Financials is easier to upgrade, and it is less sensitive to Service packs application in upgrading process. Current version is 9.0 as of April 2008, typical upgrade path is from version 6.0 to 7.5 and then to 9.0. GP latest version is 10.0, where Microsoft Business Solutions completely redesigned user security model, this is probably one of the reasons that SBF is still on 9.0
3. Integration. You should consider such technologies as SQL stored procedures, if you have support from MBS VAR, who is comfortable with Microsoft Dexterity, you can deploy Dex customizations in integrating SBF with external legacy application or in EDI environments
4. Reporting. SBF utilizes GP ReportWriter for integrated reports and FRx reports for Financial reporting. Report Writer stores modified reports in Reports.dic dictionary file, you should be aware about this file, when you install new user workstation. It is also good idea to share reports dictionary for all the users on the server, in this case you should modify Dynamics.set file - the line, where reports.dic file path is specified
5. Backup Strategies. As SBF is typically for small businesses, where IT support is limited, we recommend you to setup automatic backup via SQL Server Agent maintenance plans. Then backup files should be taken by tape backup, or alternatively you can deploy Windows backup utility to backup on external USB hard drive. You should include into backup the following databases: Dynamics, company, master
Former Great Plains Small Business Manager, recent version s 9.0, Small Business Financials is in essence GP Dexterity application with similar code base as regular Microsoft Great Plains Dynamics GP, but with scaled down functionality. SBF is available exclusively on Microsoft SQL Server platform and this fact opens great opportunities for SQL programmers and consultants to fix SBF data and program integrations. In this small publication we would like to give your reports design highlights
1. Report Writer Reporting. Small Business Financials allows you only to change the position of the fields, if you need to really change report design - place new fields, add calculated fields, then you need to do it in GP ReportWriter module, and then transfer it back to SBF in the form of Export (or package). This is pretty much a standard practice in supporting and upgrading Small Business Financial customers - they need to be backed by Great Plains Dynamics GP customization partner
2. Advanced Financial Analysis reporting. Yes, SBF has AFA as default and preferred reports for Balance Sheet, P&L, Cash Flow Statement. AFA is another Dex module which builds its reports on GP account categories
3. Crystal Reports for SBF. Here you have the opportunity and the challenge as CR is just a tool and it doesn't give your GP report wizard. We recommend you to familiarize yourself, if you are software developer or programmer with SBF tables structure, this is very similar to GP. If you have MSDN subscription, please download Dynamics GP 9.0 demo CD and install it for testing with demo company
4. SRS or Microsoft SQL Server Reporting Services. Similar to Crystal Reports, SRS should be based on SQL Stored Procedures, however it gives you more freedom in deploying ecommerce or web interface for report users
5. eConnect. This SDK is not available in standard package for Small Business Financials. You would need to upgrade to Microsoft Dynamics GP Business Ready to deploy eConnect integration and reporting functionality
A business plan is one of the most significant channels to ascertain if a business model of strategies would be effective or not. It is a thorough word diagram encircling all financial aspects of the company as well as predicting future possibilities for the business. It is where you should regress to disregard of whether things go wrong or right. The plan can be used as a comprehensive outline of financial affairs of one's company that should include information such as cash inflow, start up costs, operational costs and other relevant details of the business.
There are few options available when it comes to business financial planning. If you are having a small business operated at home then your personal savings should be sufficient for you to begin your business. Just take note that some funds should be reserved in your account in case there is emergency use. If you are lack of capital you may approach your family or friends to seek financial help from them but remember to think twice as you would be risking their money. It is alright if you are certainly sure that your business will pull a winning return but if you are not then stay off from borrowing from your immediate ones as good relationships could be destroyed due to monetary problems.
Another option would be getting financial loan from banks or credit unions. This will involve meeting the bank authority where you propose your business plan and convince them that your business is going to make a return and no doubt you will be able to repay the loan. Or you could look for investors or sponsors to aid your business financially. This may be difficult and you might need an irresistible business venture to lure people to invest in your business.
The business financial planning document is the most important record to start off a new business endeavor or to finance the growth of an existing company. There are many other business documents and they are all very important in the business. But certainly a business' affair will narrow down to attracting customers to keep your sales going.
Most small business owners are quite eager to find avenues to help their enterprise grow into a thriving business. One key approach to help propel businesses forward is securing additional working capital, in order to get the business to the next level.
Usually, this means that the entrepreneur needs to go to a lending institution to get a small business loan. When meeting with a loan officer for this purpose, detailed business financial information will be required.
The most pertinent financial information that you will need to collect in preparation for applying for a small business loan are the basic financial reports that virtually all businesses of any size generate on a monthly or quarterly basis. These financial statements provide potential lenders with a profile of the financial situation of the business. They are also invaluable in providing the business owner with the management knowledge they need to strategically improve their ongoing business plan.
The most basic form of business financial information consists of a collection of financial statements and reports, which are prepared according to strict, standardized accounting principles. Since accounting practices and principles have long been standardized and accepted worldwide, virtually anyone with even a basic understanding can quickly understand the financial picture of a company that is painted by these basic reports.
The main reports that are generally part of a company's financial information are the following: the balance sheet, the cash flows statement, the profit and loss report, and the overall financial statements, which include highlights and summarize each of the other reports. While the financial statement provides a review, the individual reports go into specific detail for the period of time that the report covers. Many times, when monthly reports are generated there are also quarterly and yearly reports generated that help to provide insights into the overall, financial trend of the business.
The purpose of the balance sheet is to provide the details of all of the current assets of the business, all of the liabilities that the business is obligated to pay, and the resulting business equity. In order for this financial information to be most useful, it should separate the current assets and current liabilities from the listing of the long-term assets and the long-term liabilities.
The profit and loss part of financial information is the report that most commonly covers longer periods of time, usually per business quarter or year. These profit and loss statements often include comparison charts for the previous time period going back long enough to help to identify the important trends.
Without this comparison, it might be easy to assume a business is doing well simply because it is profitable, yet overlook the fact that it is less profitable than the previous year. These trends will be very important to the lenders as it gives them insights about the success of working capital management overall.
When preparing a statement of cash flows, it can be compiled by either using the indirect or the direct method. Generally, this kind of business financial information is better with more detail because the fuller the detail, the clearer the view of the business's financial situation. Most loan officers agree that for the purposes of obtaining financing, the more detailed the information the better because it shows that the business has nothing to hide.
Financial accounting does not based on only about cash flow and management or knowing about the profits and losses but it is the management of the financial flow across the business and thereby managing it to promote business growth and development. Throughout the flow the accounting equation has to be maintained that is, Assets should be always equal to the Liabilities plus Capital.
Dealing with the business accounting, the first principle that should be followed is to be aware of fraudulence. While doing business with monetary amount one should be very particular about calculation and maintenance. Capital plays a huge role in structuring the business. Therefore saving that finance is important for the management and growth.
7 Tips for the Management of Business Financial Accounts:
Accounting Information of employees which play an important role has to be managed in a proper way so that at the year end reports can be generated easily without any hassles. It is very important to set up proper business financial strategies which can be followed so that the business can ultimately meet the agenda.
The various tips that will help you to flow the cash in the proper direction and will help you to understand the need of the proper settlement of the different business financial accounting can be listed as follows:
* Check Financial Transactions:
Everyday business deals with expenses, revenues, profits, and losses. It is important to keep track of each and every financial transaction as these financial statements play an important role during the tax filing and preparing the annual budget. Therefore, the day to day transactions should be maintained while considering the business financial services.
* Revising Billing Statements:
It is important to revise the billing statements sporadically. It might appear that your business is left with few payments. This should be ensured that you are paying only those bills for which your company has received the services. In financial business, you have to be very sure that you are not being cheated anyhow, that could result into a big loss for your firm.
* Review the Invoices:
Invoices are the financial statements that can be reviewed to control the expense of doing business. These financial statements helps in understanding whether you are paying extra to some business or you can get various services at a cheaper rate or you can still manage some other companies to get the similar services at a more effective rate.
* Updating with Taxation Rules:
While conducting business or you are associated with any services, it is important to pay the tax. Especially if you are associated with any financial firm the taxation services policies has to be remembered. The taxation rules changes after certain interval, in order to run the business the rules must be updated to the specialists. It will not only help in managing the accounting book but also it will play a good role during the audit trail.
* Follow GAAP for Accounting Management:
For running the business financial accounting services people should practice the GAAP (Generally Accepted Accounting Principles) policies. GAAP consists of standard principles which should be followed by every accountant to run the business. For the management of different accounts these principles can be adopted and drive the accounting management in a new direction.
* Maintaining Transparency:
It is important to set the budget limit. The budget of the organization includes all the purchases and expenses made by the organization. Whenever any department plans for purchasing goods or any other raw material it has to be approved by the higher officials. In the same way, after the purchasing of the goods, a detailed slip should be maintained so that everyone in the organization should have the idea what are the purchases have been done and how it is going to help the organization economically.
* Maintain Simplicity in your Accounting Records:
The financial accounting system should be maintained in a very simple way. The simplicity should reflect from the data and from the maintenance of the records. Accounts dealt with calculations, therefore greater complexity will result into more mistakes. Scheduling of the tasks should be maintained in order to imply simplicity.
These are certain principles that the accountant or any other outsourced accounting services Provider Company should follow in order to run the business ethically and to meet the financial need of the organization. A systematic accounting procedure helps the business to grow and thereby meeting the expected profit.
So your business has been growing, and now you are wondering if you need new financial software or accounting software to accommodate your growth. There are certain things you can do to make your financial software more manageable for your growing business.
Budgeting: Your business may have been running along just fine for years without a budget. However, as time goes on and you grow from a small to mid -sized business, you can start to reap the benefits of a budget. A budget can help you make better decisions and can also uncover the strengths and weaknesses of your business, as well as help you to keep your spending under control.
Accounting Method: Many businesses start out using a cash accounting system: a system in which only cash income and expense transactions are recorded. Cash accounting systems are very easy to learn and use, and they can provide sufficient information for tax purposes. However, the system does come with its limitations. It does not record non-cash transactions, so transactions that in fact affect the debt structure, such as a purchase on account, are not considered. You may have also used a single entry accounting system that does not provide the built in system of accuracy checks that a double entry accounting system does, and in fact it does not follow the standard accounting principles of professional accountants. A double entry accounting system can track the value of all assets, liabilities, and inventory in a business, and can also generate valuable reports such as an income statement and balance sheet. These reports show the financial 'big picture' and can help a business make smarter decisions and become more profitable.
Chart of Accounts: You may have started your business with the standard and generalized chart of accounts offered by your more basic accounting system. Over time you start to develop categories within your chart of accounts, and it may be beneficial to create more detailed accounts that fit your business just right. For instance, wouldn't it be useful to know what makes up a marketing expense, rather than just putting it into a general expense account? This is when it can be helpful to create an additional layer to your chart of accounts.
Implementing business financial software can accommodate the growing needs of your business, and can help you understand your numbers, which, in turn, aids the growth of your profitability.
If you're a small business owner, then you already know that just about everything you've been taught about your business financial planning is a bunch of garbage. Yes, I called it garbage because it's not designed to help you build wealth...
So here's the truth...
Nearly everything being taught about business financial planning in the marketplace, on TV, and in print is designed for one purpose - to separate you from your money and to get it into their company's control.
Because you own a small business you already understand how to make money, but if you're like so many others - you're not exactly sure what you should be doing in terms of investing for the future, getting a reliable return on your money, or how to structure your overall financial plan in a way that optimizes your cash flow.
So what should you do?
Who should you trust?
Those are both important questions, and I'm going to help you with how to find the answer... but I'm going to warn you in advance that it means that you're going to have to think for yourself.
The first rule of business financial planning is that no one cares about your money or success as much as you do. Period. It's just the same as acknowledging that no one else cares about the success of your business as much as you do.
It's not that they are bad people or bad advisers, it's just that they care more about their own bottom line than they do yours... it's human nature.
That means that you're going to have to be accountable for your own money and you can't just turn it over to a so called "Financial Expert" and trust that they are going to take as good a care of your money as you do... It just doesn't work that way and if you need proof, look at the American public.
The majority of them have put money away in investments and followed the mainstream advice about how to grow wealth, but reality is showing that this hasn't worked for most people and the majority of them are relying on dwindling savings & social security to help them scrape by...
This is what happens to most people when they don't take responsibility of their own success - and it doesn't have to happen to you...
So, now that we've established that you can't delegate growing your wealth, the next question you need to answer is this...
Does it make more sense to invest your time, money, and resources into something that you understand really well, or something that you don't really understand? If you agree that investing in things you understand makes more sense then look at what you've done up to this point...
Do you know where your money is invested?
Do you understand how those investments work?
If not, it may be time to reconsider where you're putting all of your resources.
The next question is similar... Does it make more sense to invest in things where you have control of your money, or to invest in things that are out of your control?
That means "Can you effect the outcome of your investments?" or "If things started to go wrong, could you do anything about it?" or "In the case of an emergency, do you have access to your own money?"
If you agree that no one will take as good a care of your personal finances as you will, then it's clear that investing those hard earned dollars into things where you have control also makes sense.
These are just few considerations when learning business personal finances, but where do you go from here?
The next step is for you to invest in yourself and your understanding of how to build and manage your finances in the same way that you've invested in learning how to make your business successful.
Begin thinking for yourself, take the time to learn the skills involved in how to manage and invest your money properly, and you'll begin to see the world of personal finances for you as a small business owner change for the better.
Building the foundations of a sustainable and profitable business is essential for long term viability of the operation. Having complete and timely information about the business and its performance in the marketplace is essential for managerial decision making about the productive capacities, directions and profitability of the business. These foundations are created by implementing a solid structure of business financial reporting. The accounting process needs to take into account, organise and accurately record all financial dealings of the company. At the end of each financial period, these records are then used by the company's accountant to prepare the necessary statements required. The four most common financial reports include the balance sheet, income report or statement, cash flow analysis and the statement of capital.
The balance sheet itemizes all assets that are owned by the business, along with the total debts owed by the business and the value of equity that is invested and owned by the company. The common equation for the balance sheet is the assets total the liabilities, or total amount being owed, plus the value of equity that is in the business. The balance sheet provides businesses with a snapshot in time of how the company is performing and its current financial position.
The income statement is presented in a flow format, which shows a summary of revenue types and amounts, as well as an overview of expense types and amounts, for a specific period of time. The analysis of the income statement provides the level of net profit or loss of the business, visually representing the difference between the company's revenue and expenses. Income statements are particularly important to those charged with the responsibility of managing the business as they represent the bottom line performance of the business over a set period of time.
The cash flow analysis or statement provides an overview of all the sources of income during a set period, as well as how the money has been used. Important for analysing the business's cash flow, identifying specific causes of any increase or decrease in the level of income and profit, business owners and managers utilise the information presented on the cash flow statement to ascertain the success of previous business initiatives as well as identify potential areas of concern.
Representing changes in the level and total amount of the owner's equity in the business over a period of time, the statement of capital represents the level of net income that is at the discretion of the owners to use as they choose.
Farm and agricultural business owners increasingly understand the benefits of utilising financial reporting software specifically designed for the industry. Those charged with the responsibility of operating a profitable enterprise need thorough and accurate financial management, reporting and analytics to feed into business decisions that create a positive impact on the business. The pressures exerted on agricultural and farming operations during the recent recession have magnified this need. With the ability to access timely and accurate reports surrounding the performance of the business empowers owners and managers to make well informed decisions that can positively affect the bottom profits of the business, while providing the necessary documentation required by institutions for credit and financial purposes. Furthermore, this data allows farmers and members of the management team to accurately ascertain areas of underperformance, and more importantly, put in place procedures and policies that ensure that conditions that may lead to business failures are avoided.
Over the last several decades, the prevalence of more accessible technology in the form of both hardware and software, has been quickly adopted within the farming and agricultural environments. During this time, the increasing information technologies available to those in the farming and agricultural industries has changed substantially, with the development of specific accounting and financial reporting that is designed to meet the specific needs and nuances of the industry. Not only do the functions of such advanced software provide a simple and intuitive platform for accounting tasks, but incorporate some of the fundamental agricultural essentials into the process, such as stock management, crops and stock control, input and output analysis, amongst many others.
Recent research has proven the worth of such technology in the farming environment. In 2004, Nuthall examined the adoption and use of advancing technologies available to farmers in New Zealand, noting that the progression in both the affordability and performance of business financial reporting software had a direct correlation with the performance of such businesses involved in the study. Further data highlighted by the Agricultural Resources Management Survey found that farmers are increasingly utilising the internet for communication and applications that provide price tracking, online record keeping and data transmission to their clients and suppliers.
With advanced business financial reporting software now being within the reach of all, with functionality and features present that have previously been available to only those enterprises with large company budgets, all farming and agricultural business owners now have access to software that provides a level playing field. Ensure your business has the best tools available to enhance its management and performance.
I cannot stress this enough but education is very important in your business financial opportunity. With proper training and ongoing education it is essential to take your business financial opportunity to the next level and exceed your own expectations. With a solid educational business model you will be set up for success.
Your business financial opportunity should include a company you can trust as well as ongoing education where you have everything in place from the very start of your opportunity. In the world of business everything from financial planning to children issues and everything in between should be taken into consideration. But so many business financial opportunities out in the warm market and here on the internet lack the leadership and knowledge to help you out.
In your business opportunity the ultimate goal should be to gain all the knowledge you can and make a sound decision on whether to use that knowledge toward your business. A lot of people fail miserable at their own business because of the lack of continuing education. I have been building businesses online for quite some time and I am continuing every day to find new and inspiring things online.
Remember this the more you learn the better you can relay your message to potential clients, buyers etc. This in the long run means a much bigger return on investment in the long run. The biggest investment you can make is yourself and the opportunities presented to you will show for it.
I deal with this everyday listening to people that do not have the desire of ongoing education. It is why their dreams and hopes will be lost and why they will never be able to take anything to the next level. If you are looking for some help visit the resource box and show people how to take their business to the next level and beyond.
Most new entrepreneurs come into their new found venture very optimistic, full of hope and reams. The way it should be. There are dreams of money and freedom, I had those by the way. So what happens afterward? For most entrepreneurs comes a high learning curve, it is the realities of risk taking versus reward reaping. Eventually the rewards will be reaped but in the beginning there is a lot more giving than taking. First you should set realistic financial goals ones that you can achieve, you should also set time frames for those goals.
Financial planning is a broad topic so here lets just focus on the aspect of financial goal planning as a budding entrepreneur. You should set your sights on earning more than what you think you need because it is better to have more cash than less.
Second you should borrow as little as possible to get started, in most cases that is nearly impossible, but you will be surprised at all of the alternative options available after you put some research and thought into it. Each case will be different and only you as the expert in your business knows how to get it off the ground. Your goals should be realistic such as increasing your revenues 10% or earning an extra $300/week for example. Do not set goals that will be nearly impossible to achieve, I know if you are an entrepreneur you confidence exudes out of you but please do not set yourself up to fail, its not a good feeling.
You should also set financial goals that have a time frame, for example, how much you want to earn in five years. The same rules apply as already stated. Having a time frame for your finances will help you know how much you have progressed in your new career. Both short term and long term financial planning will aid you in avoiding a lot of wasted money as time passes.
On last thing to mention is that plans are just that. Flexibility is the key and it is your job as an entrepreneur to adjust you sails of the winds of change of the business world and direct your venture to where you want it to go. One basic rule to remember is that plans are good for charting a course, but your ability to adapt to the certain changes that will always happen is what will get you to your destination.
After your financial goals are clear you can then plan on other aspects of your business. Always remember to set aside in your budget money to put away in reserves. No other method is so financially sound as that one. Savings will always give you security and greater command of your business. Next to savings are investments which again should be conservative until you have enough to be more aggressive.
You financial security will largely depend on how well you set goals, budget wisely with savings included, and invest conservatively. There will be time to be more aggressive with your business financial affairs, but at the beginning you should take it easy until you have a steady flow of income.
Preparing a sound, bootstrap business financial plan is the absolute key ingredient for any budding entrepreneur starting a small business with bootstrap financing. Unlike a traditional business plan, a financial plan for a bootstrapped business contains six essential components.
Components of a Successful Bootstrap Finance Plan
1. Expense Summary
The expense summary contains the start-up costs and ongoing operating expenses needed to get your business up and running.
2. Projected Profit & Loss Summary
Your profit and loss summary is a key tool for determining how long it will take your business to become profitable. It reflects a very simple formula of: revenues minus expenses, equals profit or loss.
3. Sales Forecast Summary
Your sales forecast summary is an estimation of what you believe your sales are likely to be each month. Sales forecasting requires research and a solid knowledge of your industry, niche market and product or service.
Starting a small business with bootstrap financing requires laser targeted forecasting. This is not as difficult as it sounds, it just means you must really invest the time in thoroughly researching your business.
4. Reserve Funding Plan
Establishing a reserve funding plan is essential for weathering the "start-up storms". This is a back up funding plan for keeping your cash flows above dangerous levels. Your bootstrap business financial plan must include a reserve funding plan, in order for your new venture to be successful.
5. Cash Flow Management Plan
This is simply the anticipated inflow (sales) and outflow (expenses) of cash through your business by month. Why it's so tricky is due to the fact that you may have slow sales or no sales when you're just getting started. Or, perhaps your customers are not paying within terms. Even if you have great sales on paper, your cash flow management plan will determine your success to a large degree.
6. Balance Sheet
A balance sheet provides a good overall picture of what your business is actually worth. It takes your assets (physical goods like equipment or property) minus your liabilities (debts owed to creditors) and gives you the equity value of your business.
What makes these components different from what you would prepare for a business plan written for bank financing? Well, the main difference is that this plan is just for you. It is an actual plan that you must follow to achieve success in your business. I have seen far too many instances where a traditional business plan is almost completely ignored, once the bank loan check is cashed.
With over one third of brand new businesses failing in their first year of operation, you owe it to yourself to minimize your start up risk, by being well prepared with a sound financial plan.
Where Does a Bootstrapped Business Plan Fit In?
Where does a bootstrap business financial plan fit in? Well, first you must understand bootstrap financing. Starting a small business without borrowing is the ultimate goal of a bootstrapped business' financing strategy. Many new entrepreneurs just don't realize that you can start up a business, even if you have very little money, poor credit or don't own a home. How is this possible? I know that I'm going against conventional wisdom here, but you really can start up a brand new business without BIG bank loans or a stockpile of cash.
Find the free sources of business start up funding your new business needs to survive and thrive. Start by claiming your free copy of The Bootstrapper's Business Start-up Planner, by visiting my website.
©2009 Kimberly Kelly - All Rights Reserved Worldwide.
Permission to reprint this article is granted strictly on the condition that it be reprinted in its entirety, with all live links and author bio in tact.
Basically it's a document that contains the financial particulars of a company & generally includes the following sections:
- A balance sheet
- A cash flow statement
- An income statement
Your company financial plan is one of the most effective instruments for ascertaining whether a business model is workable. It's 'the plan' encompassing all the present financial issues as well as future predictions for the business. It's what you revert to when things go wrong and when thing go right.
It can be used
AN EFFECTIVE FINANCIAL OUTLINE SHOULD INCLUDE THE FOLLOWING DETAILS...
- Start up costs
- Operational costs
- Cash inflow
- Other relevant information
WHEN IT COMES TO FINANCING A BUSINESS, THERE ARE OPTIONS...
Option #1 - For a small home operated business, you personal savings my be enough to start up a business. You may wish to think about keeping some funds in an emergency account, just in case.
Option #2 - If you're short of cash you could approach family members or close friends and ask them if they can help. But do, think it through thoroughly.
If you're not absolutely sure that the business is a winner, perhaps you're better off not borrowing from your near and dear ones. It's happened many times, good relationships destroyed over money.
Option #3 - You can turn to the banks or credit unions for finance.
Generally this involves a meeting with the bank manager where you can explain your business financial plan and try to convince him that your business idea is a clear winner and there's no doubt that you'll be able to repay the borrowings without a problem.
Option #4 - You may wish to look for investors to finance your business. Attracting backing from a third party will be difficult and to be successful you'll require a rock solid business plan and be able to 'sell' your dream in such a way that it's irresistible.
Being able to read & comprehend complex business documents is a valuable skill to have. We all know that, in business, the paperwork in the most boring part and we can usually discover something more interesting to do.
A detailed business financial plan is possibly THE MOST important document of the many that are required to kick-off a new business venture or to fund growth for an established company.
Understanding business documents is an extremely important issue when running a business but there are more important issues ahead not the least of which is attracting new customers.
Small business financial software plays a vital role in the operations of an organization especially the small enterprises. This is where you get the opportunity to keep the record of all the financial activities that are occurring in your organization. It not only helps you to track the various events that have happened in the business but it also prevent you from any problems or nuances from the government officials that may include both stakeholders and non- stakeholders. The small business financial software assists you in managing, controlling and monitoring your business in an effective and efficient manner. The question that lies is how it is possible to select the software that is right for your small business?
What do you basically need for your Business?
There are numerous small business financial softwares in the market that have multiple features in them. On top of it, the seller's main aim would be to sell the software that has more features and is higher in price and profit. Purchasing such softwares mean you are creating a problem for yourself. Small business financial softwares loaded with added features are complex in nature and takes time to learn. The task in your business needs a software that can simplify and speed up the task in less time. As a result, implementing complex softwares for the task would create more problems than actually solving it. Therefore, it is incumbent on the buyer/small enterprise to determine in advance the nature of the task in order to buy the software accordingly.
Is there a standard solution provided by each financial software?
Huge and credible companies are offering softwares in hundreds and thousands of quantities around the world. They may include Microsoft, Quicken, Peachtree and various other companies. The small business financial softwares provided by these companies are established brands as their solution are recognized across the globe. In addition, these companies have experts and specialists who are ready to offer you their services should you confront any sort of problem in the software. Hence, it is wise to buy software that has credibility in the context of established company with the good after sales service.
Is Small Business Financial Software has upgrade option?
It has been discussed earlier that it is good to buy the simple software so that it is easier to learn the software in less time. However, it is also vital that the small business financial software that you have purchased should have the option of upgrading. This is because the world is changing at a rapid pace. The system incorporated in the business should be flexible enough to accommodate any vital change. Similarly, the software should have the flexibility option to get into other modes if any new task crop up. It gives an advantage to the business by not making huge changes in the software or purchasing entirely new one.
Thus, when buying small business financial software, the above factors need to be kept in mind in order to have the right product for your business.
I know it can be pretty frustrating sometimes because there are so many options to choose from. That's why I've written this article - to help you learn some of the things to look for in a great piece of small business financial software.
For one thing, consider the price. Just because something is the cheapest doesn't necessarily mean you should get it! In fact, you might want to develop a rule for yourself to never get the cheapest thing. Maybe you can buy the second cheapest, but not the very bottom.
Here's why - oftentimes, lower price means lower quality. And with small business financial software, you can NOT skip out on quality! You don't want the IRS coming to you next year and saying you did your taxes wrong, right?
Also, be sure to look at these reviews online for different software packages. With the internet so big now, it's easy to find out which is the best small business financial software to use! Just remember that if someone is giving too much praise to one product, they may be financially motivated to do so!
Another thing to consider is flexibility. You want your small business financial software to be flexible to do whatever you need it to. Taxes, payroll, accounts payable and accounts receivable, etc. The last thing you want to happen is to buy some software, install it, and run it for a few weeks before you realize that it can't do something crucial to your business!
What's the history and track record of this software? Besides just current reviews, has it been around a long time? Is the company very well respected, or a no-name that just popped up a few months ago? Not to say that new businesses can't turn out great products, but for security reasons you may want to get small business financial software that has a solid company behind it.
The last thing to look for is a money-back guarantee. If the company really believes in their product, they'll offer a chance to get your money back if you don't like it. There's no reason you should have to buy small business financial software without this, since all of the good programs have one!
Well that's about it! I hope this article was helpful to you. Good luck, remember these things to look for, and I hope you find one of these soon!
Fall has arrived and it's the perfect time to do some business financial planning. At this time of year, we're concerned with multiple things...finishing the year, taxes, and getting a jump start on the plan for next year. It can all become overwhelming pretty quickly. To keep you on track, I've put together a 4 part process.
I. How has the year been going?
Before you can determine what you need to do in the 4th quarter and beyond, you have to know where you're coming from. If you don't have up to date financial reports, get them done NOW. The end of the year will be here before you know it. Generally speaking, surprises at tax time are not good surprises. This is also the first step to ending the year in a good place and planning for next year. Once you have your financial reports:
->Take a look at your profit and loss by month.
This will help you see if anything is missing, particularly monthly or quarterly recurring payments. It's also a good way to find categorization errors.
->Review your budget/forecast/projections versus actual reports.
Are you where you planned to be at this point in the year? Are your sales on track with your forecasts? Are your cost of sales and expense in line with your plan? If not, why not?
->Review your financial ratios.
Are your key ratios in line with your goals? Are you hitting your gross margin target? Is your net profit where it needs to be? Is your days sales outstanding looking good? How is your debt to equity?
II. What do you need to do to finish the year strong?
Now that you can see where you've been this year, you can make a plan for the rest of the year.
Based on your year so far, historical numbers, and marketing plan, what revenue goals are achievable for the rest of the year? If you haven't been doing well this year and you really need to bring your A game to 4th quarter, what are you going to do differently? In your review process, you should have pondered why your year hasn't gone according to plan. Use that information to inform your plans for the 4th quarter. If you have been meeting your targets so far this year, review what is working for you and what you need to do to maintain the momentum.
With your year to date information and your revenue plan for the 4th quarter, what changes need to be made to your spending plan? Will you need increase labor spending to meet your 4th quarter goals? Do you need to reduce labor costs to get your financial ratios where they need to be? Have you been spending your marketing dollars on things that aren't working? Do you need to spend more on sales and marketing efforts that are working?
If your business is like most businesses in the b2b service arena, the first quarter is known for clients paying slowly. To keep your company running smoothly in the first quarter, you must collect aggressively in the 4th quarter. Be vigilant about getting deposits on your fourth quarter work and get December invoices out as early as possible. Ensure your accounts receivable team is staying on top of collections and do your best to get everything possible collected before everyone heads out for the holidays.
->Keep An Eye On Cash Flow
The first quarter collections slow down means you'll have to be extra careful with your cash flow. Make sure you're maintaining an adequate cash reserve to handle your critical bills and payroll during the first couple months of the new year. If your historical trends show first quarter to be normal or strong for cash collections, you may want to pay forward some of your debt in 2010 to get the tax deduction this year (assuming you're a cash basis payor). Also make sure you adjust your cash flow forecast to coincide with any revenue or spending adjustments.
III. What are the tax impacts?
Once you have accurate financial reports through the end of September and projections for the rest of 2010, get an appointment to see your tax preparer (or at least send them your QuickBooks file and projections). The sooner the better. Your preparer will be able to give you an estimate of how much you'll owe, instructions for estimated payments you need to make to avoid penalties, and tips for reducing your tax bill. After December 31st, it will be too late to strategize for savings.
IV. What about next year?
After you've gone through the process for the 4th quarter, you can extend the process for next year.
Base your sales forecast on historical figures. Estimate a percentage of increase in historical sales and make adjustments for one time windfalls. Add estimates for additional sales channels or products.
->Create a Budget
Use your sales forecast and historical spending to inform your projected profit and loss by month for the upcoming year. Make adjustments for new employees, equipment, and any other known changes that are needed to achieve your goals.
->Develop a Cash Forecast
Use your budget to inform your extended cash flow forecast. Make adjustments for when you expect revenue to hit your bank account and when your expenses will actually be paid. If the ending bank balance goes negative, you may have to adjust your budget.
Once you've completed this process, you'll have a strong business financial plan in place. Regularly reviewing your plans with your actual results will ensure you have the information you need to make smart decisions.
Copyright (c) 2010 Kelly Totten
The operations of any business are dependent on timely and accurate financial reporting to ensure the decisions concerning the direction and strategies of the business are accurate. Furthermore, as decisions are made and operations occur, the businesses financial position constantly changes.
Profit planning is a term given to the process of originating a prescribed series of steps to be taken to ensure that a profit will be made. Having accurate information through financial reporting software empowers businesses, both large and small to easily assess their information pertaining to their current financial position, trace changes in the businesses financial position and evaluate the success or otherwise of various product, service, branding and marketing activities that the company undertakes.
In order to have set figures to assess the businesses performance against, benchmarking should be undertaken. This is the practice of setting up standards of reference and then measuring them against performance. To action this, a firms accounting records must accurately reflect the performance and changes occurring in the operations assets, liabilities, income, expenses and equity.
The continued operation of your business also relies on maintaining the proper balance among its investments, revenues, expenses and profits. Because profit margins are so critical to the success of a company, any decline in them should trigger an immediate search for the cause. In addition, any sudden increase in revenue should also be assessed to ascertain what triggered the response and whether the company can replicate the ingredients of such success so it may become a long term strategy.
As businesses are competing in an ever increasing competitive environment, controls over performance are essential in driving the company in the most profitable direction possible. Control is the process of assuring that organizational goals are achieved, which usually involves five key steps: setting up the standards of performance, measuring actual performance, comparing actual performance with planned performance, deciding whether any deviations are excessive, and determining the appropriate corrective action needed to bring actual performance into conformity with planned performance.
Software programs allow business operators to easily add input, access and monitor key figures, while empowering them to have timely and accurate business financial reporting records and analysis to base decisions upon. Additionally, software management tools which have financial reporting functions also enable the efficient processing of information, automatic generation of financial documents such as account statements and invoices, while reducing the costs of a manual accounting system. Furthermore, unlike a manual accounting system, the data entered into the program will automatically be posted to the various ledgers and accounts set up.
If you own or operate a business, it is essential that you have a financial plan. Without proper organization or management of your finances, your business could crumble. To avoid this it is important from the point you are starting up, that you plan the various aspects of your business carefully and appropriately. The financial aspect of any business is sensitive and needs to be treated as such. It is necessary to channel the funds available effectively to ensure growth of the business.
A business financial plan covers various aspects of finance which help in achieving financial growth and the business objectives. The objective of the business is a key element when organizing how to run your company. This objective should be able to reflect what you want to achieve in a practical and realistic way. It should also be clearly defined and detailed on the position the company intends to be in a certain time period.
The plan should be able to show an estimate of profits. There will have to be a financial projection of the sales and the amount it will cost to operate the business. It is also important when you are coming up with a business financial plan that you have control of its implementation. There should be a clear and systematic delegation of financial responsibilities put in place. Since you are dealing with money here, there needs to be a level of sternness that has to be put into effect. There has to be control and accuracy when dealing with finances and this will make it easier for you and the company when it comes to dealing with taxes.
Risk is always a part and parcel of any business venture. Your financial plan should include a risk management aspect. Since you are already planning, you are in essence reducing your business risks. Despite all this, it is impossible to know what the future holds, so it is advisable to always have as much shortcomings as possible covered.
If you are starting out in business you are probably wondering what financial reporting entails and how you go about it. Financial reporting/statements allow you to provide an overview of your financial condition in the short and long term.
Let's refer to 4 common questions :
Why Should I Prepare Financial Reports?
Not only are these important for you and your business forecasting purposes, they are also important to those people who support your business i.e. banks, investors, creditors and suppliers. Why? Banks are interested in your company's ability to make payments back to them for any loaned funds. Investors want to know what your company's profit margin is and creditors and suppliers need to know what your credit history is in order to make the decision on whether to allow you to have an account with them for goods, or not.
I've Only Got a Small Business - Do I Still Need Financial Reporting?
Yes, whatever the size of your business now, you will have financial goals for the future and financial reporting can assist you with this by showing you your business cash flow. Knowing how your business is spending it's money and where, can assist you with making better decisions for the future in order to make more profit.
What Are the Most Common Forms of Reporting?
Balance Sheets - a.k.a Statement of Financial Position shows your company's assets, liabilities and net equity
Income Statement - a.k.a Profit & Loss Statement this is used to show your company's income, expenses and profits.
Statement of Retained Earnings - used for showing the changes in your company's retained earnings (the portion of net income which your company keeps or 'retains')
Statement of Cashflows - used for cash flow activities, particularly its operating, investing and financing activities
The results of each of these reports are always for a specific period, for instance annually, monthly etc.
Shouldn't My Accountant Do All of This For Me?
Whilst you can employ the services of an accountant to complete your financial reports, there are many software applications which can take a lot of the stress out of it not to mention a lot of the cost. This will enable you to complete all the day to day invoicing, wage paying etc too, which means that you have all of your financial information in one place. With most applications you can save your information onto a CD or by other means to pass on to your accountant at the end of each financial year, for auditing purposes.
If you have further questions about your business financial reporting, why not take a look online at some of the products and services available to you. The websites you come across may well answer your questions and provide the product / service you require.