Know the Game You Are In: Keep Score

Did you spend hours pulling together your tax records in preparation for filing your October tax return? It was agonizing watching one of my clients, a CPA, trying to get his clients to get him last year’s work?  Or worse yet hearing his frustration in the 11th hour when a client owed the IRS more money because they had failed to confer with him ahead of time to plan the right strategies.

Where is your business now in relation to this year’s financial goals?  Is your business surviving or thriving? Do you have your finger on the financial aspects of the business?  As a small business owner with so many conflicting priorities, and so much information out there selling you the next most important idea, gadget, or technology, how do you make good decisions and concentrate on the critical matters?

Creating a successful business, demands focus on the truly essential areas, in particular the effective and strategic management of your business finances.  This can be straightforward and simple.  The challenge is often more in establishing the routine and habits of a good financial manager. The reason most small businesses fail is because of poor accounting practices. In other words, you have never taken the time and planning to do what a wise owner should do: monthly take account of the revenues and expenses, the cash flow, and the budget forecasts, this is crucial

It does not require a degree in accounting or an MBA, but the basics must be in place and practiced! To be a truly effective “manager” of your business, you should organize your information so it is easy to review and even easier to present to your Tax accountant at year end.

Knowing the state of your cash flow and expenses at all times, gives you the clarity of how much money you are actually earning, and the profitability of your business.  Once you have established good accounting practices you can sleep better and make wiser decisions based on your knowledge.

The Challenge:  Take time now to organize your accounting records and make an appointment to review them with your tax person sooner rather than later.