Financial Mgmt Tools for Entrepreneurs and Small Businesses

Financial Mgmt Tools for Entrepreneurs and Small Businesses by Nadine Riley{4:36 minutes to read} Being a self-employed entrepreneur or small business owner can be exciting and frightening all at the same time. It is good to be the one who is calling the shots, but it is difficult to keep your fingers on all the necessary pulses so that you and/or your business thrive.

One of the most essential and useful tools in any business toolbox for a small business is proper bookkeeping. Without it, how do you account for all the money that flows in and out of your company? Is it possible that your business is losing cash at an accelerated rate without you being aware of it? You say your business is profitable, but you still find yourself with cash-flow problems.

Whether you operate your business from your kitchen table or from an office suite, proper recording of all the money that flows in and out of your business is an integral part of your business’s success and financial planning. Few things will doom your business faster than disorganized books and records.

Bookkeeping can be beneficial in preventing the IRS from taking more than their share of your income. It can also allow you to determine if your earnings are sufficient to cover your expenses and will allow you to see trends that can guide your current and future financial goals, such as:

  1. Can I afford to finance the operations of my business, or do I need to seek outside help?
  2. Do I have enough savings to cover up to six months of operating and living expenses?
  3. How will my finances look in the next 1-5 years? (Forecasting can be a great tool to envision where you would like to be.)
  4. Can I afford to purchase a home, OR is my present home becoming a financial burden, in which case it may be best to sell it?
  5. Can I afford to pay off current loans, or can I afford to take on more loans? (For example, a credit balance, which is actually a loan.)
  6. Is my business becoming more lucrative? If yes:
    • Am I paying too much tax due to the timing of income and expenses?
    • Is it time to review my current business and tax structure to see if it is still working for me?

How often have you heard the sayings “what you don’t know won’t hurt you” or “ignorance is bliss?” It is not my intent to debate these age-old idioms, but I believe that what you don’t know can hurt you and ignorance can destroy you. How often do we look back and say, “If only I knew then what I know now, I would have…” Let’s focus on the next step by simply implementing what you now know.

As financial advisers, we can help you:

  • Create financial statements that show your true financial position;
  • Create a Cash-Flow & Budgeting Analysis to show the use of and plan for every dollar; and
  • Create a forecast analysis to help you effectively manage and lead a successful and profitable business.

Whether you own/manage a business or a household, the principle remains the same. If we don’t manage our finances (money), it will manage us. Planning and implementing are an integral part of financial stability and security, which leads to financial independence.

We are here to assist you with structuring a financial plan that will help you to face any financial challenge that may present itself at each stage of your life. If you have not already done so, check out our newly updated website, Masterpiece Accounting Group, to explore some of the other services we offer.

Nadine Riley, CPA
Founder, Masterpiece Accounting Group
Phone: (212) 966-9301