Small Business Finance: Know Your Numbers
Provided by Visa, Content Partner for the SME Toolkit
Bookkeeping doesn't require that you hire an accountant or use bookkeeping software. As long as you can accurately state your income and expenses on your tax forms (and you've got the records necessary to prove that you're correct), you are good.
But if you have employees, carry an inventory, have a large customer base, or incur substantial expenses, you need to institute standardized bookkeeping procedures, either on paper, or on a computer. Keeping good records will make your business more profitable by helping you:
- Recognize problems early (such as disappearing inventory, increased costs for products or equipment, or customers who aren't paying on time), before they have a chance to bring down your business.
- Maintain your cash flow at acceptable levels.
- Figure out whether it's time to raise (or lower) your prices.
- Put together the financial reports you need to get loans and investment, and
- Prepare your tax returns quickly and accurately.
Accounting and bookkeeping.
Even if you're allergic to numbers, there's an accounting solution for your business.
Unfamiliar with accounting basics? Here's a short, painless primer.
Cash or accrual? Which is best for your business?
Forecasting your finances is part-mathematics and part-common sense. With a little patience you can master it.
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