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New business owners need to invest some time in developing skills in financial management. Basic skills start in areas of cash management and bookkeeping to ensure integrity in the bookkeeping process. New business owners should learn how to generate financial statements from bookkeeping journals, and analyze those statements to really understand the financial conditions of the business.

New business owners need to invest some time in developing skills in financial management. Basic skills start in areas of cash management and bookkeeping to ensure integrity in the bookkeeping process. New business owners should learn how to generate financial statements from bookkeeping journals, and analyze those statements to really understand the financial conditions of the business.

Managing cash flow and bookkeeping will ensure integrity in the bookkeeping process. Financial statements will show the reality of the business situation. In the beginning the business owner is wearing many hats, you?re the do-er, manager and the strategist. That?s why bookkeeping is far from your mind. But for the sake of your business it?s a wise choice to have some skills in that area. No one can do a job better than you, because you understand your business and you have a vision for the future of your business.

Just like you wouldn?t loan out your tools or let someone else look after them. Your finances are also your business. Your business depends on a variety of things to keep it healthy ? good product and well kept books are the starting point. Job sharing is also welcomed. When you understand bookkeeping and the process it takes to create well kept books, than you can contract a portion of it out to a bookkeeper.

What you need in your business are sound financial statements that you can rely on to make good decisions. The financial statements will tell you so much; it will make you dizzy with excitement. Always keep in mind that your goal is to have accurate financials. Learning even a little bit about bookkeeping will change your experience with bookkeeping from dreariness to having fun. Let yourself get involved with the numbers. These are the numbers you created from your sales, expenses and assets, so by recording those in proper form will give you your financial statements. It?s that easy.

Once you?ve taken the time to master the basics in bookkeeping and creating accurate financial statements ? that?s when the fun begins and you can start to manage your business. You don?t have to wait for bank statements to arrive in the mail; you already know your bank balance and no more surprises at the end of the year when your accountant finishes you taxes.

The first step is to set up your accounting system. The second part is to understand basic bookkeeping and different categories. Once you?ve mastered the basics of keeping your books and having accurate financial statements, the fun begins when you start to make changes and seeing the result on your financials. You no longer need to wait for your bank statement to arrive in mail because you?ve already entered your cheques and deposits.

Some people think of bookkeeping as an exercise that they go through for one reason, the tax man. No wonder everyone leaves the bookkeeping to the end of the year and they scram to get the information together. You have to keep accurate books for yourself and the health of your business. 1- Price your product or services accurately. 2- Know if you?re making or loosing money ? over all or just on specific projects. 3- Understand your cash flow. 4- Get to know a banker

Pricing your product is the most important thing in your business. We all know the equation that says, you have to charge more than it costs you. But how about considering the rent, telephone or labour that you have to pay every month? Nearly anyone can figure out the direct costs of their products. This is where a good set of books will come in handy to show you the overhead that needs to be considered in the equation. This is the difference between making a profit or a loss. Now you have priced your product. You have to know how it compares with the market. Do research on market trend and peoples buying habits. Consider all your overhead, loans and government liability into your pricing. Maybe you?re overpriced, check the staffing, or maybe the advertising your doing is not reaching the right customers. Adjust your cost first before reducing your sales price.

Cash flow, I can?t say enough about cash flow and the importance unless I share this story with you. Joe is a house painter. First summer starting his business there was always money in the bank from his customers. By winter business slowed down and Joe was happy he made a profitable business in his first year. After two weeks, Joe looked at his bank statement and revised his profit down. A month later Joe had to revise it down again to account for the workers compensation bill, HST bill, and the $5000 error he made in his deposit. Joe visited his banker and got a loan to tie him over the winter months with a promise of paying it back in 3 months. One of the most important things you will learn from keeping your books is how to understand and mange cash flow.

You may not need a banker yet, but a banker whom you can trust, will work with you and help you learn about business while your growing your business is very beneficial. When you need to see a banker have your numbers organized on a cash flow sheet and your banker will take you more seriously knowing you have done your homework and you understand your business. Keep your banker informed of your business activities. Develop a meaningful business relationship and they will support you.