Attention: Small business owners! Get your finances in order and save a ton of money!

Whether you're a small business just getting started or a small business that's been around for a while, the first thing you need to do is organize your bookkeeping.  I have always suggested to each small business owner, that they should have monthly financial statements on their business. Sometimes it's cost prohibitive to have an accountant prepare the statements for you monthly, so that is why I always recommend small business owners get a copy of QuickBooks.  QuickBooks is the user friendly way that a small business owner can keep track of income and expenses in-house.  QuickBooks has a Simple Start Edition, a Pro edition and a Premier edition. Under most circumstances I would recommend that most small businesses just start with the Pro edition. The Simple Start edition is just too limited and does not give you any ability to import data from other areas such as your online shopping cart, bank account, or credit card merchant.

After you get your copy of QuickBooks, you should find a certified QuickBooks trainer in your area and get some help on how to use it. If you're someone software savvy than you could probably figure it out on your own, but there are so many features within QuickBooks that are useful. But sometimes it's helpful to have somebody show you how to use them.  Its a very powerful piece of software and its helpful to have someone show you some of the tips/tricks on how to use it. 

This is an important first step for many reasons. I know when I first started my small business. I let the bookkeeping go for almost 9 months. I knew that I was buying my product and x and I was selling it for 2x so there is no way that I couldn't have been making money. Once I got a copy of QuickBooks and started to look at where I was spending my money, I started to identify areas in which I could cut spending or increase spending while still continuing to run my business effectively.

Another, and sometimes most important reason, for having accurate bookkeeping is that it will reduce your accountant bills. An accountant is a professional and you do not want your accountant doing work that you could easily be doing with just a few minutes a day. Usually, small business owners bring all the receipts into their accountant at the end of the year. It's no surprise that the accountants rates would be highest at that point because that is when every other small business owner is bringing their reciepts in for tax return preparation.  It should also be no surprise that the account is going to be charging you high rates because their time is now limited. The accountant is spending a lot of time figuring out your finances, and he is charging all along the way. You will save a lot of money by taking the time at days end or weeks end to enter your income and expenses into QuickBooks. At that point, your accountant can look over your statements that you've prepared clean them up and give you tips for next year.  So, more time can be spent on picking your accountants brain for advice, rather than him/her just working through the paperwork to get them done.

Finally, keeping accurate records is something that every bank will look for when it comes time for loan. Typically, they will look for two to three years of business tax returns and two to three years of personal tax returns. Depending on what time of year, you are applying for your loan. The bank may also require interim financial statements for that given year. This gives the bank on idea how your company faired during the year. Internal financial statements also provide greater detail, as opposed to business tax returns, which have broad categories. And lastly, keeping your own internal financial statements sends a message to the bank that you are monitoring your own financial condition. Just as they would be. 

So, first step for any small business owner is to get a copy of Quickbooks or any other financial software and start to get used to entering in your income/expenses.  You'll be happy that you did!

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