Business Financial Software - How Your Needs Grow

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.

Business Financial Planning - A Helping Hand

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.

Business Financial Reporting - Creating the Foundations of Performance

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 Financial Reporting

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.