Managing a small business is no easy task and managing the finances can be a small headache. Bookkeeping is definitely not the favorite task of most small business owners, though it is an important factor in the success or failure of the business. Knowing where you stand at any instant gives you the information you need to make decisions that can help your business grow or prevent you from making a bad one that ends in failure.
Many business owners started off with a hobby that became a business over time. Some people set out with the intention of building a business from their hobby while others are pleasantly surprised to discover there is opportunity to make a living from their passion.
Whatever the motivation, it’s important to know when a hobby is still hobby and not quite a legitimate business yet. This is because businesses are allowed to deducted operating expenses from their taxes but individuals making additional income from their hobby cannot.
Do you cringe when you think about bookkeeping for your business? You have receipts in the car, crumbled receipts in your purse or briefcase, and vendor invoices buried in the papers on your desk or email inbox. Here are ten easy steps you can put in place today to better organize your bookkeeping records so the next time you think about your bookkeeping, everything is nicely organized for you.
Budgeting is just as important to the small business owner as it is to major corporations. It helps control those ebbs and flows that most small businesses experience throughout the year.
By having a budget, the business owner can use the extra money gained to purchase needed products or supplies, to market and promote the business, hire needed employees, and when there is a decline in sales, the monthly budget will prevent the business from failing because the owner knew when to cut back on certain expenditures.