Financials for Your Business

Financials for Your Business
Managing the financials of your business does not have to cause you a major headache, and actually can be handled and controlled by following the three steps below.  Your business accounting can be simplified by keeping consistent and accurate records, and doesn't have to be time consuming.

One: Standard Forms
You should have three standard forms on hand at all times.  A list of your products and/or services and the cost of those products and/or services/  Decide what main products you plan to offer potential customers, and develop a price for those products based on what you pay for the raw supplies, the cost you incur to produce the products, and the packaging, shipping, and handling of the product.  Decide what services you plan to offer potential customers, and develop an hourly rate for those services based on the going market rate for the services and where you want to fit on the scale: Below Market, At Market, Above Market.  A standard bid form when giving a potential customer an estimate of the cost of doing business with you and a standard invoice for billing customers once an agreement has been reached round out the three standard forms to have in had.  Your bid form can serve as a formal contract between your business and actual customers by adding "Bid Acceptance" terms at the bottom of the bid form.  Be sure to also add verbiage stating that the prices are estimates only and are subject to change. Be sure to add payment terms at the bottom of your invoice, and any fees that you will charge in the event the customer's payment is returned for NSF by their bank.

Two: Bank Account
As soon as economically possible, establish a business account at your local bank.  This legitimizes your business in the eyes of  potential/actual customers/investors.  It assures them that they are doing business with an actual company and not just an individual.  It also protects your personal assets since most people sue the name to which they issue payment instead of the person they spoke with by phone or even in person.  It also assists you at tax time by allowing you to easily see your income and expenses without having to separate personal and business income and expenses as you would if reviewing just a personal checking account statement.  Also, when applying for credit for your business, it improves the professional image of your company when you list a business account instead of a personal account.

Three:  Receipts
Be sure to keep receipts for any and all expenses that you incur as a result of doing business, including meeting with potential/actual clients/investors, purchasing supplies, and trade/vendor shows.  Be sure to categorize your receipts for easy summation at tax time.  Some basic categories are Transportation (vehicle repair and maintenance, gas, license plates, registration, parking, insurances, etc.), Entertainment and Meals, Office Supplies and Equipment, Communications (telephone, cell phone, pager, etc.), Marketing (vehicle decals, web site, etc.), and whatever other expenses you incur on a daily, weekly, or monthly basis.

Your Profit and Loss Statements, Balance Sheets, and Tax Forms are bound to be easier to compile and compute if you employ the three techniques listed above on a daily, weekly, or even monthly basis.