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Bookkeeping Basics for the New Entrepreneur and the 5 Mistakes You Need To Avoid C2online



As a small business owner, are you in touch with your finances? And I don't mean just an income statement and filing your taxes. Are you really in touch with the ins and outs of your business' financial operations? As an entrepreneur of any type of business, whether you're running a bakery, starting a coffee roasting company or offering dog walking services, you can't live without financial management. It's an essential part of your business operations.

To have good financial management, you need good bookkeeping. So what exactly is bookkeeping and why do you need it? Bookkeeping is a system of recording the financial transactions of a business. It looks at all aspects of the comings and goings of your cash flow and transactions. Here are some basic bookkeeping terms defined: Basic ABC's of Bookkeeping

Small business bookkeeping is necessary for a couple of reasons:

1. Record data, organize it and prepare financial statements.

You need to track your revenues and expenses and record this information in an organized manner with a chart of accounts. This is where you file away all of your business transactions (expenses, income, assets, liabilities, equity, etc.). With this data, you'll need to prepare essential statements, and of course, for tax time to file your tax return and make claims.

2. Management & Growth of Business

Owners should understand that bookkeeping is not just about paying taxes or reporting results. Management and growth is an area of financial management that can be easily overlooked by business owners. This takes time and for most entrepreneurs, time is not readily available. However, if you want to give your small business the best chance for success, then you can't overlook this. Think about it. With the financial data you've recorded and organized, you now need to analyze how aspects of your business are performing, and create valuable reports to guide your business.

Now that you have a basic understanding of bookkeeping and why you need it, we want to get you off to a good start. So keep these in mind:

5 Small Business Bookkeeping Mistakes to Avoid

1. Save money on bookkeeping.

One way to save money is by doing the bookkeeping yourself, manually. Yes, it can be done. But it takes time. And if you want to do it properly, it takes a lot of time. Unless you're an expert at Excel—a topic we discussed in a previous blog: Why Excel May Be Bad for Your Business—you need to invest in some other options. You can purchase a software package, invest in online bookkeeping software, or hire a bookkeeper.

2. Not making informed decisions based on your numbers.

You need to understand your finances and make decisions based on solid financial management. Your financials are an essential tool to better manage where your business is headed tomorrow. You need to know what's selling, what's most profitable, who's buying and who owes money.

3. Poor record keeping.

As discussed above, your numbers are crucial in so many aspects. So what good are they if they're not accurate? Don't underestimate the value of keeping good records; it will catch up with you and will misguide you if not done properly.

4. Pay attention only at tax time.

This is a mistake on multiple levels. First, you need to maintain good records throughout the year for when tax time arrives. As well, how can you make those informed business decisions if you're not continually paying attention and are staying attuned with your finances. Make it part of your daily routine so you don't fall behind. If you’ve hired a bookkeeper, have them keep you informed on a continuous basis; be in constant contact with them.

5. Make your accountant do all of the work.

An accountant essentially takes over after bookkeeping ends. You provide them with your bookkeeping and they utilize that information for their services. So if you don't want to spend a lot of money on an accountant, you must send the necessary business documents and information to your accountant in an organized way. (Hence, having good record keeping.) Missing documentation will slow them down and cost you money.

You want to get your new business off to a good start. Even if numbers and financials are not your area of expertise (and quite frankly, makes your head spin), don’t forget to still give it the attention it deserves. The success of your business depends on it.


You’re Not Just a Bookkeeper: Branding Yourself and Giving Your Business an Identity C2online

Have you thought about your brand? Sure, you’re not selling a tangible product in a store, you might be a small business working out of your home, but don’t believe that your brand isn’t just as important. Whether you’re just starting your business or if you already have an established business with some branding in place, it’s never too late to think about building on your brand. But first, let’s talk about what branding is.

 

What is branding?

We took several definitions of branding and combined them to create our own: Creating a unique image for a product or service in consumers’ minds. Branding aims to establish a significant and differentiated presence in the market that attracts and retains customers.

Branding is so much more than a logo and business name. It is everything you do in your business; it is the message that you are sending out about your services. It is the look (your logo, name, colours, fonts, etc.) as well as the voice of your business (communicating who you are and what you do).

I came across this presentation on SlideShare that gives an overview of branding:


OK, so how do you define your brand? Let’s start with the basics because you can’t do too much if you don’t have brand identity. Here are some first steps to get you there:

1. What are you selling?

The first, easy answer is bookkeeping services. But think beyond that now. Why do customers need you; what problems do you solve for your customers? A twist on this, as described in an article by inc.com: 8 Easy Ways to Increase Sales, think about what your customers are buying from you. When you focus on selling more of what your clients want, your brand will come much more sharply into focus as well.

2. What is your expertise? Build on your best and own it.

What do you know you’re really good at? This will differentiate you and give you a niche in the industry. Market this in-demand expertise and make it part of your brand.

3. Identify personal interests. Be authentic.

What motives and interests you? What is important to you? Let these answers define your place in the industry. Being authentic means you know who you are and helps you define how customers see you. When you’re authentic, your brand is authentic and when your brand is authentic, it is true to its mission and purpose.

4. The Customer Experience.

Your brand is also the way your clients feel when they experience your services. How do you want them to feel? Ensure your brand promise meets the offering and customer experience.

Bring all of your answers together into a few sentences that describe the essence of your brand. This may take some revisiting and numerous revisions to get it right, but once you have the done the work, you will have a well-defined brand.

You can now further establish this brand by building the look and voice of your business. Think of this as your first impression. And be consistent across all aspects of your business and marketing. Consistency builds recognition which will help you stand out and be memorable.


Bookkeeping and Pinterest: Yes, it can be done. And yes, you should be doing it. C2online



We did it. We just couldn’t resist the 3rd largest social media platform—we’re on Pinterest. Check it out at pinterest.com/c2online.

But many may wonder how a bookkeeping software company has a use for Pinterest. It’s not a visually-rich industry and—if you’re one of the 10.5 million users, you already know—Pinterest is all about pictures.

First, let’s talk about why you should consider Pinterest for your business:

  • Pinterest is retaining and engaging users 2-3 times better than Twitter was at a similar time in Twitter’s company history (thesocialskinny)
  • Pinterest accounts for about 3.6% of referral traffic, compared to 3.61% for Twitter (thesocialskinny)
  • Pinterest drives more sales and more new customers than Facebook (boticca.com)

But what can a bookkeeper pin about? Here are our suggestions on what to pin if you’re in the bookkeeping or accounting world:

Your Own Blogs, Guides and Helpful Documents
This is the perfect way to drive traffic to your website. If you write a blog (and you should), pin it! Pin an image that reflects your written content to your Pinterest page, add a captivating title and description, and link this image to your blog on your website. This allows pinners to encounter your content and visit your pages in just one click. You can also do this with informative documents, ebooks, guides, etc. Use the document cover or an attractive image to pin. Having good content with links back to your website is a subtle way to promote yourself.

Industry-Related Blogs and Documents
Share good information with others – even if it comes from a source other than you. If you provide good content, people will continue to visit your profile.

Use Infographics & Data Charts
Infographics are visual representations of information and there are infographics for almost anything you can think of. Yes, even accounting-related infographics. Utilize these because they are visual and informative. Better yet, create your own infographic or pin your own data charts. Use a clear headline and link back to your website.

Logos and Images Directly Related to your Business
Absolutely, pin your logo and some good information about your business on a board; followers  need to know what it is you do. It’s OK to have some boards dedicated to this but your entire Pinterest profile should be more than that. Don’t turn people away with self-promotion.

Industry-Related Images
Pin pictures related to bookkeeping – use your imagination! Are there any products that you use in your business? Pin them.  Office supplies you couldn’t live without? Pin those too. There are no real rules and people are looking for your own spin and interpretation.

Pictures You Already Have
Make a board that showcase’s your company’s culture.  Also include a photo and a bio for each person.

Video Gallery
You can pin videos too. Find videos that are informative within your industry and create a board. If you do your own videos, get those on Pinterest too!

General Interest
Show some personality and create boards that are of interest to you. Don’t make it all about business and promoting yourself. You want to engage people and give a variety of content. Pin any type of volunteer work, community involvement, activities you do, and so on. This will show people who you are.

As you build your Pinterest page and increase your followers, you’ll want to start engaging with people. When people make comments on your pins, reply and build relationships with them. Ask questions to entice those comments. Follow other people of interest, re-pin their pins and comment on them.

There are a lot of options for pinning for your business. Overall you want to position yourself as an information source within your industry, share your knowledge, drive traffic to your website, show some personality, and make it fun. But be careful, you may just become a pinning addict!


Why Excel May Be Bad For Your Business C2online

Many companies are using MS Excel for their bookkeeping needs and services. It makes sense because the program already comes bundled with the PC you bought, so it’s cheaper than buying bookkeeping software. And really, if your current bookkeeping system utilizes shoeboxes and file folders, then Excel would be a huge improvement for you.

However, when it’s time to move on from the most basic of cash book type record, you’ll need a proper bookkeeping tool that’s built for your needs. As business grows, it also outgrows the use of Excel for bookkeeping.

Here are some common arguments for using Excel… and the problems associated with them.

It’s familiar and I already know how to use it.

Sure, most users know how to do some of the basic tasks but Excel is not simple and the more advanced features require some proper learning and experience. A bookkeeping software is already set up for all the normal accounting things one will need to do.

I can create almost unlimited reports and graphs.

You’re free to do anything you want with your data; there’s a whole range of financial and statistical functions, formulas, charts, and numerous ways to analyse your data. However, you can end up with multiple worksheets, complex formulas and a headache trying to figure it all out.

It’s free because it’s already on my computer.

If not used properly, it could be a waste of time… and money. Because Excel is so complex, there is a steep learning curve to becoming proficient. There is also a huge potential for error with every formula, data entry, calculation, and so on. This inaccuracy could cost your business a lot of money. Sometimes what looks like the cheaper or simpler option may turn out to be the opposite in the long run.

Everybody has Excel so I can easily share it with others.

Excel can be very difficult for others to interpret and understand. There is little consistency between spreadsheets produced by different people and therefore can be extremely difficult to understand the logic of a spreadsheet created by another person.  

So many people use Excel, it must do everything.

There are functions that Excel can’t provide like audit trails, invoicing, bank feeds & reconciliation, contacts, payroll, time billing, reports and more. You could probably create a workable solution for some of these functions but it would take a lot of time and training.


There’s nothing wrong with Excel if it works for you. Have a look at your business and your goals and decide if you should you should be using this program or if it’s time to move towards a dedicated bookkeeping software.

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