Accounting Essentials

Know Your Numbers

Starting a new business can sometimes be a tough thing to do. It usually requires entrepreneurs to fully understand their business’ functions and to complete them properly. When it comes to starting a small business, accounting is a very important business function.

It often enables entrepreneurs to see what the picture of their business’ success really looks like. It is very important for entrepreneurs to always keep a big amount of records that contain important information regarding the small business startup, just in case they need them for legal and tax purposes.

Some Facts That Are Good to Know

A lot of small business that started as a side business or even a hobby use the same accounting method, and that accounting method is known as cash basis accounting. Basically, what this accounting method does is recognize and record a transaction when money changes hands. For entrepreneurs, this accounting method represents a very simple way of maintaining their accounting information.

As businesses continue to grow and expand, it may be necessary to stop using the cash basis accounting method and start using the accrual accounting method. This accounting method is the most frequently used accounting method in business. Instead of recognizing and recording transactions when money changes hands, this accounting method does it as transactions occur, and it does it no matter if money changes hands or not.

Forecast Financial Estimates

Entrepreneurs may be required to provide lenders, investors or banks with a financial forecast that is related to their business. This information is very important when it comes to obtaining outside finances for the costs of a business startup. More often than not, entrepreneurs create a business plan, which usually includes an economic forecast. Lenders and investors heavily rely on this information.

Determine Profitability

A company usually determines its profitability by accounting. And even though a small business might be able to generate a big amount of sales revenue, failing to generate enough profits can destroy the business and make it absolutely irrelevant. It is also important for entrepreneurs to understand whether they are using assets to generate services well or not.

It is always a good idea for small businesses to seek advice from either an individual public accountant or a regular public accountant. What professional accountants usually offer is a big amount of expertise and education. Entrepreneurs can benefit from both of these things when it comes to setting up their small business accounting operations.

(Post contributed by Window Pros Boise )

Common Business Mistakes

Things Not To Do

Business Mistakes Not to Make

Starting a business is not really easy. There is a big amount of things to thing about and important things to make. That pressure can make you not think straight, which can make it easier for you to make a wrong decision that can either set you back, or completely hurt your potential for success.

Even though a flawless plan doesn’t exist, there are some very dangerous and common mistakes that a lot of new business owners make, which can impact their businesses in a negative way. And now, here are some of the most dangerous mistakes that you should never make.

Skipping the Planning Phase and Not Setting Goals

We all know that planning can be tedious. But still, it is a very important thing and it should never be left behind. You always need to have a solid plan that includes the research of your business idea, as well as the market potential. And if you don’t, you might have to work in the dark. Some of the most important plans to consider include a financial plan, a marketing plan, and a business plan.

Setting goals is something that can motivate you to work hard. Goals keep you on track at all times. If your goals are smart business goals, you can outline the specific steps that you will take to get to where you want to be.


Undervaluing Your Services

This is another common mistake that some business owners tend to make. Generally, what makes people under-price their services and products is either the fear of failure or the lack of confidence in their ability. Undervaluing your products and services is never a good idea because it can make you frustrated, and it is generally not a good move for your business.

Recovering from this can be a long road. So, you should explore the market thoroughly in order to determine what would be the best price for what you are selling.


Being Afraid of Marketing Your Business

From traditional to Internet marketing, there are many ways to market your business. And when it comes to marketing your business, you don’t have to follow any specific rules, and to be fair, they don’t even exist. What would be the best type of marketing your business depends on your target audience and your business in general. However, it would be a mistake to assume that business will come to you and that you don’t need to market.

Ultimately, we are all human beings and it is in our nature to make mistakes. But if you can recognize those mistakes and do your best to avoid repeating them, success will be right in front of you.

(article Contributed by our friends at

Commit to Success

Full On Commit

Starting a business is an all-out bare-knuckle brawl. You will encounter the obstacles throughout your journey. There are a few things to you can do to prepare for the fight and a number of things to consider.

To Do

Things to do before launching a business. Most successful business ventures are well planned and thought through. There might be a few business owners who fell into that position due to circumstances and timing. Even then these questions need to be answered towards the beginning of the venture as they help form the overall Company.
• Decide your value proposition, or the value you bring to the market place.
• Business Structure- Sole Prop, LLC Partnership, S-Corp, C-Corp
o All structures have different regulations and requirements to consider. Consult a accountant for your situation.
• Roles and Responsibilities
• Comprehensive business plan, here’s a great resource to get you going here.
• Invoicing
• Accounting

All the above plus many more items should be carefully planned for and laid out in a clear document. This will help you reference it and stay focused on your goals.
While you can plan the above aspects, there are some that need careful consideration. Not only from a legal stand point but an operational one as well.
For instance, your business structure. While these various structures have differing tax implications they may also affect your operations.


Take a partnership for example of two business owners. While you might be motivated to succeed, is
your partner? Business ventures are not like college or high school project. You know the ones where a
few of the group members do the work and the others contribute very little. In order for a partnership
to work effectively each partner should have set roles and responsibilities.

If you have a two-way partnership typically both are responsible for the debt incurred. So, no matter if the other cannot pay you are still liable. So it is extremely important both parties are pulling their weight and fulfilling their responsibilities.

Business Plan

The Business plan is the ultimate guide to success. If you read our last post, Fail to plan- Plan to fail you realize the importance of this document. Before your get too consumed with the day-to-day of business make sure you have a solid plan to guide you. Visit the small business centers in your local community and ask a professional to help assist you. There are numerous resources out there and don’t be shy or too prideful to utilize them.


The accounting function of your business is one of the most important. If you can’t track your money you will likely get in debt quick. It is common to think you have more than you actually do. Business owners often free about this expense or that which can lead to the belief you have more available cash than you do. Its highly recommended to get a good bookkeeper to setup your business then maintain your monthly books.

As you get going in business a solid foundation to build from will lend to years of success. At least give you a fighting chance in this battle. So, make sure to slow down and get things in order before it’s too late.

Fail to Plan, Plan to Fail

Okay once you have considered the product/service you want to offer, and have the determination to make a business work. Where do you start?


Well they say, “fail to plan, plan to fail”, so how do you plan? Luckily for all of us there are a myriad of resources online to formally help you with this. Organizations such as SCORE or SBA can get you started on the right path. One of the fundamental things they and any other business consultant would have you do is to create a “Business Plan”.


Business Plans help you identify the What, Why, how questions you might be having as you get started.

The sections in your business may vary slightly but will likely contain the following.

  • Summary
  • Description
  • Products/Services
  • Marketing Plan
  • Operational Plan
  • Management & Organization
  • Expenses and Capital
  • Financial Plan
  • Additional

By completing a template with these sections included you begin to clarify the What, Why and How of your business. Giving you a clear path to be successful.

Planning can take a little time but none the less can save you hours, weeks and even months of problems, that might otherwise occur.


As a new entrepreneur, the best thing you can do is rely on expert resources and follow the path of the successful. Reach out in your community and find the SCORE office, network with industry pros and learn everything you can from the best.

Plan for business growth

Rome wasn’t built over night but it was a consistency that made it possible. So be consistent in your efforts to grow your business and Plan for success.

Fundamentals of building a successful business

Trying to build a business? I mean building a real business to last for and serve a higher purpose.  It is easy to wonder at other people’s accomplishments in life especially the wealthiest. However, you need to know that they had to start somewhere to get to where they are. For them to build such legacies, they had a product which they believed in and provided it in the market place to the customers that needed it. For your company to thrive, there is more to do than the basic paper work, business card makeup, and address acquisition. If you are to begin a business and be successful, there are things you must put into consideration. Here are fundamental tips that will help you run your company successfully.

Identify your product

Define your product by identifying the market and what you can provide. Let your product be different from those currently in the market. When you create uniqueness in your product, you shall have made a demand for it. Who is your competition? Ensure you outsmart your competitors in the market by letting your product to be better than what exists. While it is fine to be the name in the industry, building your reputation by providing a quality product in the market should be your mission.

Design your company’s DNA.

Find a professionally designed logo for your company. You may be offering the best product or services on the market but if you fail to present yourself and your company, in the same manner, you may audience. When you represent yourself with a good design, your business will grow.  Have a good speech that defines your product and how customers use it and present it in an unforgettable way.

Keep it level

There are compliance measures that need to adherence in any industry. You need to ensure you maintain a high level of ethics in the industry. For you to maintain your customers, play by the stipulated rules. Your products and services need to be viable in the industry, in the long run, so you have to keep a high level of ethics. Avoid cutting corners with intentions to save time or corners. Tag and monitor your production to distribution to ensure you stay legit.

Be the leader

You have to be the leader to your staff and your industry at large. Set realistic expectations and have proper plans on how to achieve them. Ensure everything is done according to avoid missing out on your financial goals.

Expand and build relationships

The growth of your business requires proper professional networking. There are entrepreneurs and experts who have experience in the business building process. They can give you advice on how to avoid some failure and save you the cost and pain of doing the same mistakes. Connect with such experienced professionals through trade shows, networking groups, and other events. You can even get strategic partners that can help your business grow. Build strong relationships with like-minded stakeholders, law enforcement and the insiders of the industry.