Small Business Financial Software - Choose the Right One 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!

Year End Business Financial Planning In 4 Easy Steps

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.

->Forecast Revenue

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.

->Adjust Spending

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?

->Collect Aggressively

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.

->Forecast sales

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

Business Financial Reporting

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.

Business Financial Plan

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.

Business Financial Reporting - 4 Common Questions

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.