VickiKosuda managing business financials PPT

Best practices for managing your small business finances
Victoria kosuda, cpa, citp


Introduction


My background

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Certified Public Accountant (CPA)
Certified Information Technology Professional (CITP)

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Owner of Beyond Financials Consulting, LLC

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CPA specializing in technology

Provide Accounting, Tax, and Consulting services to small businesses.
Focus on accounting technology & virtual CFO Services

Early career with Fortune 500 companies implementing accounting & finance software
solutions.

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Bringing that know how to the small business owner.


What I see every day

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Very smart entrepreneurs with no insight into their business finances.
Struggling with cash flow because they don’t know how to manage it.
Running their business with no idea if they are profitable.
Only knowing their bottom line at tax time.


My approach

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Train small business owners on how to manage their finances.

Use technology to keep things organized and make life easier.
Review the numbers on a monthly basis.
Regularly discuss the current state of the business and future plans.
Be proactive instead of reactive.


Effectively managing your business finances


6 key steps

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Separate business & personal spending
Record everything
Use accounting software
Get paid as quickly as possible
Reconcile your bank account
Be consistent


Separate business & Personal

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Legal ramifications for co-mingling business & personal expenses. Not going into
here.

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Need to separate to ensure a good understanding of business cash flow and
profitability.

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When you take money out of the business for personal expenses, it is not an expense or a “writeoff”. It is simply depleting business funds.

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Need to learn and understand the difference between business and personal
expenses.

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There is a lot of confusion here.

Need discipline to start and keep doing this correctly.


Record everything

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Every invoice
Every receipt of $
Every expense that hits your bank statement – (e.g. fees)
“Garbage in garbage out”
Record it timely


Use accounting software

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No double entry of info
Able to automate a lot with technology – bank downloads, online invoicing, recurring
transactions

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Ability to generate financial statements and other important reporting
All in one – customer invoicing, vendor bills, payroll, banking information
Will enable you to have the best picture of how the business is doing


Get paid as quickly as possible

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Use Online Invoicing

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Speed
Enter in your software and generate an e-mail to the customer.
Saves days in the process by not sending via mail.

Closely Manage your A/R

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Reduce terms – it is rare to gives 30, 60, 90 days anymore

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Comprehensive outstanding A/R reporting for easy follow-up

Software records when an invoice e-mail is opened, lets the customer add comments, and sends
reminders. Invoices are not getting lost on a desk.

Accept Online payments

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Money is in the bank faster
Software provides link to payment gateways – Pay Now buttons
Recurring Services? Get approval to directly debit their bank account or credit card.


Reconcile your bank account

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Need to capture everything
Apply deposits to invoices
Record bank fees
Record transfers
Find mistakes
Use bank download technology to make it easier


Be consistent

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Nothing worse than needing to catch up
Allocate time to accounting on a weekly/monthly basis or hire someone to do it
Stay in control


Using technology for your accounting needs


Software Options

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QuickBooks Desktop

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Hosted QuickBooks
QuickBooks Online
Xero
Freshbooks

Options in the “Cloud”

The cloud

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Push towards the “Cloud”

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Internet software that can be accessed from anywhere.
Easy to connect software apps to meet your needs.
Accessible via the web, tablet, smart phone

Constantly releasing new enhancements
This is the trend


quickBooks

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QuickBooks Desktop

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Most well known
Can handle all small business needs
Setup is critical. If it is setup wrong, your accounting will be incorrect.
Best for a business with a dedicated bookkeeper or detail oriented owner
Pro, Premier, Enterprise – versions can handle small to mid-size biz
Still the best option for manufacturing, retail, and distribution businesses
Use direct connection to banks to avoid double entry.
Files have to be sent to the accountant or the accountant has to login to your computer.
Purchase a software license for a specific yearly version. Upgrades required every two years as product
support expires.


Hosted QuickBooks

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Hosted QuickBooks

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Desktop QuickBooks loaded onto remote server - accessible via the internet.
The user is accessing a “desktop” in the cloud and can use the full version of QuickBooks.

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Accountant can access this cloud desktop also.

Right Networks, Cloud9, InSync plus other vendors
Can be expensive – Paying a monthly fee.
Need QuickBooks, but want to work in the cloud, a hosted solution is a great option.


QuickBooks Online

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Service businesses
Light inventory requirements
Online invoicing
Invoicing via the app
Bank downloads

Not like QB Desktop, so need to understand differences if looking to switch.
Intuit is focusing here
Monthly subscription fee


Xero

www.xero.com

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Called “beautiful accounting software”
Easy to use, visually appealing interface.
Online invoicing with a link to PayPal & some new options
Invoicing via iPhone and iPad apps
Bank and PayPal feeds into the software daily
Easy to use dashboard showing cash balance, A/R and A/P
Can use add-on software to get more functionality
Monthly subscription fee


Freshbooks

www.freshbooks.com

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Great invoicing software
Perfect for service businesses that need to bill back for out of pocket expenses
Great integration with Xero
Invoice in Freshbooks
Accounting in Xero
Online invoicing with a link to various payment gateways.
Monthly subscription fee

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Benefits of accounting in the cloud

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Anywhere anytime access

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Online invoicing / Invoicing in the field

Real-time information
Better collaboration with your accountant.
Very regular software releases to make improvements
Easy to integrate applications – use the best in breed and link them together –
invoicing, scheduling, inventory
Lower up front costs
No need to backup date. They do it for you.


Who is using

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Cloud

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Web Developers
Creative Agencies
Consultants
Financial Planner
Cleaning Service
App Developer

QuickBooks Desktop

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Retailer
Distributor (Traditional and eCommerce)


What software is best for you?

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Type of business
Who is doing the bookkeeping
Number of users

Where are users located
Security required around user access/roles
Complexity of accounting requirements
Cost
Assess software based on your specific needs


Managing and growing your business with real-time accounting information