05.20
12
by admin ·
- excess of receipts over payments – with negative figures shown in brackets
- opening bank balance
- closing bank balance
It is important to base initial sales forecasts on realistic estimates. If you have an established business, an acceptable method is to combine sales revenues for the same period 12 months earlier with predicted growth.
Find the most suitable software for your accounting requirements, talk to Caloundra Book Keeping.
Note that all forecast figures must relate to sums that are due to be collected and paid out, not invoices actually sent and received. The forecast is a live entity. It will need adjusting in line with long-term changes to actual performance or market trends.
Accounting software:
Accounting software will help you prepare your cashflow forecast, allowing you to update your projections if there’s a change in market trends or your business fortunes. Planning for seasonal peaks and troughs is simplified and you can also make ‘what if’ calculations. Most banks require profit and balance sheet forecasts as well as cashflow. Many accounting packages will assist with preparing these documents.
MANAGE INCOME AND EXPENDITURE
Effective cashflow management is as critical to business survival as providing services or products. Below are some of the key methods to help reduce the time gap between expenditure and receipt of income.
Customer management:
- Define a credit policy that clearly sets out your standard payment terms.
- Issue invoices promptly and regularly chase outstanding payments. Use an aged debtor list to keep track of invoices that are overdue and monitor your performance in getting paid.
- Consider exercising your right to charge penalty interest for late payment. Use legislation regarding late payment legislation, and use software’s tools to calculate statutory or contractual interest you may be able to charge on an unpaid debt.
- Consider offering discounts for prompt payment.
- Negotiate deposits or staged payments for large contracts. It’s in your customers’ interests that you don’t go out of business trying to meet their demands.
- Consider using a third party to buy your invoices in return for a percentage of the total.
Supplier management:
Ask for extended credit terms. Giving your suppliers incentives such as large or regular orders may help, but make sure you have a market for the orders you’re placing. Alternatively, consider reducing stock levels and using just-in-time systems.
Taxation:
You may be liable for several different taxes including income tax, corporation tax, VAT, business rates and stamp duty. It is important to keep good records to help you calculate your liability and complete your returns accurately.
Use interactive tools to get an indication of the business rates payable on your business premises.
If you are registered for VAT, it makes sense to buy major items at the end rather than the start of a VAT period. This can often improve your cashflow, because you can set the VAT on the purchase off against the VAT you charge on sales. This may help plug a temporary cashflow gap.
You can use official business support services (HMRC in UK for example) dedicated usely to help businesses struggling to meet tax, National Insurance or other payments … If you are concerned that you may not be able to pay these amounts I hope that you can discuss in your country temporary payment arrangements tailored to your business’ circumstances.
Asset management:
Consider leasing fixed assets, eg equipment, or buying them on hire purchase. Buying outright can result in a huge drain on cash in the first year of business.
CASHFLOW PROBLEMS AND HOW TO AVOID THEM
No matter how effective your negotiations with customers and suppliers, poor business practices can put your cashflow at risk.
Look out for:
- Poor credit controls – failure to run credit checks on your customers is risky, especially if your debt collection strategy is inefficient.
- Failure to fulfil your order – if you don’t deliver on time, or to specification, you won’t get paid. Implement systems to measure production efficiency and the quantity and quality of stock you hold and produce.
- Ineffective marketing – if your sales are stagnating or falling, revisit your marketing plan.
- Inefficient ordering service – make it easy for your customers to do business with you. Where possible, accept orders over the telephone, email or internet. Ensure catalogues and order forms are clear and easy to use.
-Poor management accounting – keep an eye on key accounting ratios that will alert you to an impending cashflow crisis or prevent you from taking orders you can’t handle.
- Inadequate supplier management – your suppliers may be overcharging, or taking too long to deliver. Create a supplier management system.
- Poor control of gross profits or overhead costs.
USING YOUR CASHFLOW FORECAST AS A BUSINESS TOOL
A cashflow forecast can be an invaluable business tool if it is used effectively. Bear in mind that it is dynamic – you will need to change and adjust it frequently depending on business activity, payment patterns and supplier demands.
It’s helpful to set up a regular review of the forecast, changing the figures in light of your sales, purchases and staff costs. Legislation, interest rates and tax changes will also impact on the forecast.
Having a regular review of your cashflow forecast will enable you to:
- see when problems are likely to occur and sort them out in advance
- identify any potential cash shortfalls and take appropriate action
- ensure you have sufficient cashflow before you take on any major financial commitment
Using a cashflow forecast to avoid overtrading:
Having an accurate cashflow forecast will help ensure that you can achieve steady growth without overtrading. You will know when you have sufficient assets to take on additional business – and, just as importantly, when you need to consolidate. This will enable you to keep staff, customers and suppliers happy.
It is important that you incorporate warning signals into your cashflow forecast. For example, if predicted cash levels come close to your overdraft limits, this should sound an alarm and trigger action to bring cash back to an acceptable level.
Ideally, you should always have a contingency plan, such as retaining a minimum amount of cash in the business, perhaps in an interest-earning account. This ‘rainy day’ money can be used to meet short-term cash shortages.
CASH MANAGEMENT IN ACTION
The following simple example shows how a small, profitable business can run into unforeseen cashflow problems when it takes on a new large order.
XYZ manufacturer is a small but profitable gift designer and supplier with three full-time staff (including the two owners). It outsources production, but supplies the raw materials itself to save on costs. It then finishes and packages the final product on site.
XYZ does not have any loans or overdrafts. It has a long-term customer base of small gift shops and visitor centres.
XYZ suddenly wins a large order to supply bespoke wall plaques for a chain of stores. The contract promises to double its turnover.
The team takes on an additional employee and works flat out to meet the deadlines. It doesn’t notice an impending cashflow crisis resulting from a fall in repeat orders from existing customers combined with a jump in raw material costs.
To make matters worse, the new client keeps changing its mind about designs. A misunderstanding means the first run of goods is rejected, causing a delay in payment and increased production costs. XYZ orders additional materials to make up the shortfall in the run.
By the time the order is complete, XYZ is running an expensive overdraft. Profit margins have been squeezed to the limit and it has lost several of its existing customers. A downturn in the fortunes of the retail chain means that it doesn’t place any further orders.
After a lot of hard work, XYZ finds itself back where it was five years earlier.
Tighter cashflow management would have highlighted the fall in repeat orders and rise in raw material costs. XYZ would also have benefited from a client contract that included:
- milestone payments and penalty provisions for changes such as those to designs – eg increased fees
- sharing the cost of additional materials with the new client or getting the client to pay for them.
REFINEMENTS TO A SIMPLE CASHFLOW FORECAST
There is no single best way to set out a cashflow forecast. However, some refinements to the most basic ways of setting out the information will give you a more sophisticated view of your business’ situation.
You could, for example, separate cashflow for business operations from funding cashflow. This gives a clearer picture of the actual performance of your business and is a format that many accountants prefer.
CASHFLOW FROM OPERATIONS
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05.20
12
by admin ·
Number of employees: We are a workforce of 750-plus.
Number of years in IT: More than 27 years — back when Lincoln used punch cards and COBOL
Educational background: MBA, University of Maryland University College; M.S., Health Care Administration, University of Maryland University College; B.S., Leadership, Northeastern University; MIS, Pace University
Find the most suitable software for your bookkeeping needs, talk to Caloundra Book Keeping.
First job: I was an inventory control supervisor at a high-end specialty retailer.
What’s the best advice you’ve ever received?
I was living in New York City many years ago, and someone on the subway told me, “A journey of a thousand miles begins with a single step.” Then he got off at Times Square. I never saw him again, so I’ll attribute the quote to its author, Lao-tzu.
What is your alter-ego career?
If I weren’t a CIO, I would be a national park ranger at Yellowstone National Park in Wyoming. And I’d do it for free. I’ve been to Yellowstone several times, and it still amazes me.
An excerpt from Gianna’s nomination
As a leader, Jamie is as authentic as they come. He was able to produce exceptional results with vigor, tenacity, self-confidence, and an ethical, compliance-based stance that nurtures respect and supports healthy growth and profit.
He serves as “the missing link,” where the CIO must simultaneously steer operations, workforce, and technology to better achieve customer/client satisfaction. He blends a unique set of executive competencies that focus on the organizational mission, vision and values challenging the “we have always done it this way” mentality.
What are you currently reading?
I read multiple books at a time; my reading list currently contains two books: The Alchemist, by Paulo Coelho; and Understanding Michael Porter: The Essential Guide to Competition and Strategy, by Joan Magretta.
Describe the best technology decision you ever made.
Giving my wife the remote. Seriously, moving one of our Tier 1 mission-critical applications from the data center and into the cloud as Software as a Service. We reaped a huge cost savings, and gained better efficiencies across the organization.
What’s the biggest challenge you face in IT today?
Hiring qualified staff that has the right stuff: technology and business acumen.
What’s your prediction for the next big technology?
Start preparing for the disruptive trifecta of mobility, cloud and social media technologies. What we’re experiencing now is just the tip of the iceberg.
What was your best career move?
My best career move was moving into the health care field. It’s a very powerful feeling, knowing that at the end of every day I’m helping to solve some of humanity’s problems.
Great combination of business and technical leadership. Focus on business value — revenue generation in addition to cost savings. Changed the way technology is perceived.
SearchCIO-Midmarket.com IT Leadership Awards judges
Describe your biggest career influence.
Coffee and my wife — she keeps me going strong and makes me want to be the best I can be, while the coffee just tastes good.
What is the biggest problem you see with corporate cultures today?
Two challenges affect corporate cultures: first, lost leadership, and second, not having the correct strategy in place. Leadership is no longer unidirectional or “top down”; it should flow across the organization wherever needed. Second, you must not only have a sound strategy in place but also be able to execute it flawlessly. These are the linchpins to being successful and staying competitive.
What’s your advice for IT pros coming up the ranks?
Here are the three pieces of advice I give all the time:
Get a business degree. Technology has become so consumerized and ubiquitous in the workplace that you need to speak the language of business to find those opportunities which allow technology to deliver value.
Become as well-rounded as possible. You’ll need to be able to speak with anyone about anything at anytime. And you never know who that anyone will be. People aren’t one-dimensional.
Keep a sense of humor.
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05.19
12
by admin ·
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THE PROFIT LINE Reprinted with Permission
With the rash of recent media stories about bookkeepers defrauding their employers, we thought it was time to offer a few tips that could keep the same thing from happening to you.
If your searching for a great accountant, look no further than Bookkeeping Services Caloundra.
First of all, realize that the person who defrauds you could be the person you least expect. Would you think a church bookkeeper who had held her position for close to 20 years was a fraud? No? Neither did the church. And the bookkeeper bilked the organization for hundreds of thousands of dollars.
Since you can’t live your life in a state of constant paranoia, suspecting every person who crosses your path, here are a few safeguards you can use to minimize the chances of fraud happening within your organization:
Never give your online banking information to anyone, period. Password access to your account is just an engraved invitation for someone to dip his hands into the cookie jar. By the time you realize the money is gone, your bookkeeper could be too.
Never have blank signed cheques anywhere. This is a common mistake; many business owners leave signed cheques with their bookkeeper or staff for the sake of convenience. But it means that cheques to unknown payees and in unknown amounts can easily be made out – and the fraud doesn’t even have to forge your signature!
Never give signing authority on your bank accounts to a bookkeeper. You open yourself to abuse if your bookkeeper has legitimate power to write cheques without your knowledge.
Be the first person to open and check your bank statements each month. Question any entry or cheque that you don’t recognize. Bookkeepers often go years without being detected simply because they are the only ones who actually watch what goes through the bank accounts.
Separate your bookkeeping and accounting roles. Two pairs of eyes on your books can provide a critical set of checks and balances. The accountant can review the bookkeeper’s records and vice versa, ensuring each person is held accountable and deception is more likely to be caught.
Be smart and be aware. With a little caution, you can dramatically reduce your chances of being victim to fraud.
Fern Gordon is the owner of The Profit Line. Making sound business decisions means having a clear picture of your financial situation in front of you at all times – yet the daily demands of running a small enterprise can be overwhelming. As a result, financial record keeping and reporting often don’t get the attention they truly deserve.
The Profit Line changes all that. We are your bookkeeping partner, helping you stay on top of your finances so you can make better, more informed business decisions.
In addition to taking paperwork off your plate, we also pinpoint the key numbers critical to the performance of your specific enterprise, and make sure you have them in hand whenever you need them.
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05.18
12
by admin ·
6. Sage Simply Accounting First Step (Windows)
Sage Simply Accounting First Step
Simply Accounting First Step is from Sage, the same company that sells Peachtree Accounting. While it lacks quite a few features found in higher versions, Simply Accounting First Step includes support for bill payments, invoicing and tracking expenses, and more fully-featured versions are available.
Budget BAS and GST specialists Accounting Services Caloundra will take care of you now.
Simply Accounting is included in About.com Small Business: Canada top accounting software picks .
Cost: Simply Accounting First Step retails for $69.99 and has a free 30-day trial, and you can download Simply Accounting First Step to give it a try for free. Another $120 buys job tracking, inventory functions and more features in Simply Accounting Pro.
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05.16
12
by admin ·
Compare Software by Application
Business software solutions allow businesses to streamline their processes while meeting their specific needs. Within each type of application listed below, there are multiple solutions that offer the necessary tools to increase business productivity while reducing operational costs.
Budget BAS and GST specialists Accounting Services Caloundra will take care of you today.
Compare the leading accounting software , ERP software , and CRM software solutions that incorporate user-friendly tools that are customized to meet every unique business. Review in-depth product information, white papers, and case studies for the best industry-proven business software solutions. Download our free interactive CRM Buyer’s Guide , Manufacturing/ERP Buyer’s Guide or Business Intelligence Buyer’s Guide to avoid common mistakes and help make your technology evaluation process more efficient.
With free product demos and Buyer’s Guides, at 2020software.com you will find all the necessary information and resources you need to select the best software solution to streamline business processes, adapt to ever changing business needs, and increase business value .
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05.16
12
by admin ·
microsoft
Microsoft Office Accounting Professional is a good accounting software program for small businesses. A basic version called Office Accounting Express is available free of charge. Unfortunately, Microsoft will be discontinuing these accounting programs on November 16, 2009. Data integration with Ebay, Equifax, online banking set up and tax line mapping will be discontinued after December 15, 2009. The remainder of the software should still be functional.
Budget BAS and GST specialists Accounting Services Caloundra will take care of you now.
Outlook-Style Design and Bilingual Interface
Office Accounting 2008 boasts more features, tighter integration with other Microsoft Office applications, and data sharing capabilities with eBay and PayPal. Both the free version and the paid full version offer bilingual English and Spanish interfaces. This could be a real boost for Hispanic businesses and their accountants.
Office Accounting Express is available for free, so it’s worth trying out to see if you like it. Microsoft Office Accounting Professional is recommended for small business users who demand tight integration with Microsoft Office applications such as Excel or Outlook’s Business Contact Manager. Small businesses that process payroll in-house will find Peachtree or Quickbooks a better fit for their needs.
Microsoft Office Accounting Express includes all the essential accounting features for service businesses. Office Accounting Professional adds features such as creating purchase orders, tracking inventory, assessing finance charges, support for foreign currencies, manual payroll, and managing fixed assets. Businesses with inventory, merchandise, international sales or payroll will need the extra features in the Professional version.
Importing data from another accounting program can get tricky. Office Accounting will import data from Quickbooks, from Excel, and from Microsoft Money. However, my data from Quickbooks didn’t fully import into Office Accounting Professional. As a reminder, be sure to back up all your data before migrating to a new accounting platform.
Features in Microsoft Office Accounting 2008:
Office Accounting includes most of the essential accounting functions, such as:
Creating invoices,
Recording purchases, receipts, bank deposits, and bill payments,
Generating financial statements and other reports,
Downloading bank information.
In addition Office Accounting integrates with other Microsoft Office applications, for example:
Using Word to create custom templates for invoices.
Exporting reports to Excel or Access.
Processing payroll manually in Excel, and then importing the data into Office Accounting.
Emailing invoices with Outlook.
Sharing customer information with Outlook Business Contact Manager.
Personal Observations when using Microsoft Office Accounting Professional:
Office Accounting allows businesses to import their accounting data from the 2002 through 2007 versions of Quickbooks. To import Quickbooks data, you’ll need to download a separate add-in from the Microsoft Web site. My data did not fully import though.
Office Accounting has a very clean software interface. It is very reminiscent of Microsoft Outlook with various tabs on the left-hand side. If you like the look-and-feel of Outlook, you will like the layout of Office Accounting.
Office Accounting uses the task flow chart as a navigation aide. The task flow chart is similar to those found in Quickbooks and Peachtree.
Office Accounting integrates with Word, Excel, Access, and Outlook.
In order to process payroll, you have to set up a link between Office Accounting and Excel, and then process payroll manually in Excel. The only other option is to use ADP to process your payroll, and then download the transaction data into Office Accounting.
Product Versions:
Microsoft Office Accounting Express (free)
Microsoft Office Accounting Professional ($199 MSRP)
On the Web:
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05.15
12
by admin ·
Step One: Gain the Knowledge
If you’re going to be in business, you must know how to keep score. To gain this knowledge will require that you go to school to learn both accounting and computer software that is used to support your particular business. With this knowledge, you can talk intelligently about your accounting needs with employees, bankers, and your own accountant.
Find the best software for your bookkeeping requirements, talk to Caloundra Book Keeping.
The financial matters you will confront in your own business are little different than those of large corporations. Financial tools, coupled with an understanding of how to use them, will assist you in the proper management of your business. Without this understanding and without a dedicated commitment to using financial tools, you reduce your chances of success.
Your business will be judged by the classic financial measures: the balance sheet, the profit and loss statement, and the cash flow statement. These three measurements will define the financial health of your company. In this session you will learn how:
The balance sheet tells how much the business is worth.
The profit and loss statement tells if your business is profitable or not.
The cash flow statement predicts your cash balances into the future.
As a business owner, you need to feel comfortable with the values portrayed by each measurement. Understanding these three measurements will whet your appetite to learn more, which in turn will lead to your strategic use of credit and ability to make choices tying operational activities to the best use of funds. They will help you make better decisions.
You will also need to gain knowledge of accounting in order to evaluate your competitors or businesses you might wish to acquire (or be acquired by). While information about companies may be obtained from stock brokers or interviews with key executives, the best source to learn about your most successful and publicly owned competitors is to read their annual reports. You will need to understand accounting to draw intelligent conclusions. Accounting courses at your local community college will give you most of what you need to know.
Step Two: Select an Accountant
Stan Henslee
CPA
If someone doesn’t know anything about accounting, how would you suggest they go about learning it?
You should consult an accountant before you start. This could be a Certified Public Accountant (CPA) who is a sole practitioner or a large accounting firm that can offer expertise in many areas (and whose fees tend to be higher). Another type of accountant is an “Enrolled Agent” (EA). EAs must pass a taxation test administered by the Internal Revenue Service.
You will need to decide how your accountant will prepare your annual financial statement. There are several levels of audit to select from. They are listed in our session 1 on Financial Controls in Building My Own Business course.
At present, there are no national certification standards for bookkeepers like there are for CPAs or EAs. So, it may be best to look for referrals when selecting a bookkeeper. Many CPAs and EAs will refer you to people they have confidence in to help you with your accounting needs. Bookkeepers range from those who only pay bills or process receipts to “full charge” bookkeepers who can summarize bookkeeping activity for your CPA or EA to prepare tax returns.
On the other hand, if you want someone to advise you on business organization and prepare income and payroll tax returns, you will probably want a CPA or EA to help you. The more “routine” bookkeeping you know and do yourself, the better it is, because you can then afford a higher level of expertise.
You will need to determine what accounting software program will work best for your business and your accountant can help decide this. Some good ways to determine this:
Ask others in your industry whose judgments you trust about their experience with software.
Look for ads in trade magazines for software and visit booths at industry trade shows for ideas.
For QuickBooks users, have a look at MyBizHomepage which offers a great tool allowing users to view important financial snapshots of their business through any Web browser. Click here to learn more.
Payroll accounting and reporting is increasingly complex. If you will have employees, look up the “Payroll Accounting Service” providers in your area. Your accountant may have a recommendation. This complicated function can be outsourced at a reasonable cost.
Maureen Costello
Why is a good understanding of accounting important for running your own business?
Ways that your accountant can help in dealing with your banker:
Sooner or later, you will need financing in addition to your start-up sources. It is important to establish banking relations BEFORE future needs arise. Your accountant can help you:
Prepare cash flow control statements that will estimate what the cash needs of the business will be in months to come.
Prepare a personal financial statement, including a balance sheet of your personal assets and liabilities along with a statement of income and expenses showing how much cash flow you generate each month. Banks will usually require a personal guarantee.
Locate a banker. This can be helpful because the banker has had prior dealings with the accountant.
Polish your business plan for your banker.
Organize as much information as possible including financial statements in a neat and orderly fashion.
Methods of Accounting
Before you start, you will need to decide what form of accounting your business will use. There are two major types:
Cash Basis Method: This is what the name implies; you recognize income when you receive the cash and you recognize expense when you pay the bill. Most service businesses operate on the cash basis because it is much simpler to understand.
Accrual Method: Here you match revenue with expense regardless when the cash may or may not be collected. If you sell a product to a customer and he doesn’t pay you for 30 days, the sale is recorded in the books on the day that you made the sale. When the money comes in the “accounts receivable” is then turned into cash. The same with expenses: if you incur an expense on one month but don’t pay until the next month, the expense will be recognized in the month in which you incurred the expense. If you’re in manufacturing or deal with inventory, the Internal Revenue Service generally requires that you be on the accrual basis.
Keeping Separate Business Records
Even in a small business you should, before you start, set up a business account even if you’re a sole proprietor. It will be important to keep your business records separate from your personal records. This will make it easier for you and your accountant to pull records together for income taxes when the time comes. Your accountant can help you prepare and set up your company accounts, including establishing your checking accounts and or savings account for operating your business.
Ken Blake
How should an accountant be selected for a business?
Tax Liability Issues
There will be a number of tax liability matters that you and your accountant will need to deal with:
Income Taxes. If you start as a sole proprietor you will be reporting your business activity on a schedule that is attached to your IRS form 1040, called Schedule C. Not only will the sole proprietor pay income tax on business income, but the sole proprietor will also pay social security tax on this income. This is reported as a separate item on the income tax return. The social security tax can be quite a surprise for the new small businessperson who does not expect to pay roughly 15% of net income for social security tax on top of the income tax. Operating as a partnership or LLC does not relieve a partner of the obligation of paying self-employment tax. Your accountant can help set up estimated tax payments that will lessen the burden of your final tax bills as well as avoid penalties for not paying taxes as you go along.
Payroll Taxes. If you have employees, your accountant can help you apply for necessary state and federal payroll numbers that you will need to file payroll tax returns. The federal number is called a “federal employer identification number” or FEIN, and these are obtained by form SS-4. Also, in every state there are local and state taxes that are required. For instance, in California you need to apply for a state identification number that will establish an account for you to pay the state withholding tax that you withhold from employees and the state disability insurance monies withheld. There is also a state unemployment tax that you pay. There may be other taxes that may be unique to your local situation.
Financial and Technical Assistance
Many times, there are sources of financing and technical assistance available to start-up businesses that are given by various organizations and agencies that wish to spur the development of small business. Your accountant may or may not be familiar with these sources, but this might be a question you would pose to a prospective accountant before you hire him or her. Financial and technical assistance may be available from:
SBA-guaranteed loans to businesses, handled through banks
Local community banks, funded by the federal government
Tax incentives available for hiring minority employees
Trade organizations
Service Corps of Retired Executives (SCORE), which is a nonprofit organization whose goal is to help small businesses become successful. SCORE offers workshops and seminars on various business topics and may give you the opportunity to talk to someone who has been down the same road before.
David Lohr
Knowledge of accounting and tax issues were big lessons for me.
Internal Controls
“Internal controls” refers to what is needed in the handling of funds, where money in the form of cash, checks or credit cards, is exchanged for goods and services. The goal is to make sure that the business receives all of its income without any of it being siphoned off by waste, fraud, dishonest employees or just through carelessness. Even a business that is healthy in all other respects can be very vulnerable to failing from the inside through lack of internal controls. Your accountant can help set up appropriate controls for your particular business.
Damage control planning is an important part of internal controls. You will need to be prepared for adversities.
If you are in a manufacturing or retail business you will need to set up inventory policies and controls because inventory, similar to cash, can disappear very rapidly through carelessness or employee dishonesty. You need to have safeguards in place very early on in the process by setting up controls as to who can sign for goods and services and who controls the release of goods and services out the door after the processing has been completed.
You are probably getting the idea by now that in your selection process of retaining an accountant, it is a good idea to get one with experience in your industry.
Quarterly Returns
Quarterly returns are primarily payroll tax returns and sales tax returns. Start-up businesses need to file quarterly payroll tax returns and send the money that has been withheld from the employee’s check as well as the employer’s share of social security taxes to the federal government. Likewise, state income taxes that are withheld and state unemployment tax that the employers pay to the state must be accounted for. These are matters you need to get right from the beginning, so that these taxes are paid in the appropriate time frame and you’re not penalized for late payment or non-payment of your tax obligations.
It is a common occurrence for start-ups to be short of cash. And it is very tempting to hold off paying certain obligations to conserve cash. Yet, you should not fall into that trap with your government obligations because governmental agencies have little patience with delinquent taxpayers.
Similarly, the sales tax money that you collect, in states that charge sales tax, needs to be forwarded to the state, either on a monthly or quarterly basis depending on the volume of your sales. Quarterly reports will be required to show how much you have collected and that you have submitted this money to the state in a timely manner.
Bank Account Reconciliation
We suggested earlier that you set up separate business accounts to make it easier to track expenses and business income. This bank account needs to be reconciled at least once a month when you receive your bank statement. You can save money by learning to do this yourself, and your accountant can teach you if you don’t know how.
Reconciliation refers to taking the balance in your checkbook and reconciling or mathematically comparing it to the bank balance. You must also take into account any difference in those two balances that are due to checks that you have written that have not yet cleared the bank. If this is the case, your checkbook balance will be lower than the bank statement because the bank has not yet seen some of the checks you have written. So it is important that these outstanding checks get subtracted from the bank balance and the resulting number be compared to the number in your checkbook. When the two match, we say the account has been reconciled.
Employee Benefits Policy
As you add employees to your business, you will need to decide
How many hours people will work.
What holidays they are entitled to.
What your vacation policy might be.
If you elect to cover employee medical expenses or provide medical insurance, you will need to give some thought to what type of policies you will provide. This might be an HMO, PPO, or pick your own doctor policy.
What sick leave policy to offer. Will you pay employees when they are sick or will this time be considered unpaid time off? Be sure to refer to the Fair Labor Standards Act when making this determination. There are different requirements for hourly vs. salaried employees.
There are a number of sources to give you some help in deciding these issues:
Start with your accountant and lawyer.
Your own experience in your particular industry will help determine your policy. What has worked for similar companies in the past is very likely a good way to consider going with your own company so you are competitive with other firms in your industry.
Organizations such as SCORE can be helpful in determining policies and procedures.
Step Three: Do Your Own Bookkeeping!
Ken Blake
CPA
What are the dangers of not having effective internal controls?
Up to now, you have consulted with an accountant and have gone to school to learn basic accounting. The next step in getting to know how accounting and cash flow works is to do your own bookkeeping in your start-up mode. This is invaluable because as you do the bookkeeping and understand the records that are involved, you are in a much better position to bring in employees and train them as the business grows. You can then devote your time to more of a manager level. If you have a willing spouse or trusted friend, they can be invaluable in doing the bookkeeping. If you are doing your own bookkeeping, it is very important that you choose the right software. A good program that’s easy to use can help make your life a lot easier. The two best programs on the market are Quickbooks and Peachtree . We have an agreement for 20% off Quickbooks .
Making entries into a software program does not require a trained bookkeeper but it is important that you, the business owner, have a full understanding of double entry accounting.
There is one aspect of bookkeeping that you could consider delegating: payroll and payroll reporting, which can be handled by Payroll Service Providers at a low cost.
If you are in a partnership, it is especially important that you have knowledge of the accounting as well as what is happening in the other areas of the business. Remember that in a partnership, all the partners have authority to commit to the partnership. If a partner in charge of accounting doesn’t do a good job, it can affect all the partners.
Major Financial Statements and Software
Balance Sheet
The balance sheet is a “point in time” statement. Think of it as a snapshot. It is a listing of all of your assets as well as your liabilities, and the difference between these two numbers is your equity in your business. You will see in the example that the balance sheet is divided into two major sections. The first section is “Assets.” The second section is “Liabilities and Owner’s Equity.”
The general order of a balance sheet is to go from the most liquid to the least liquid. In other words, under “assets,” you see the heading “current assets” and the first item is cash, because cash is the most liquid of your assets. After cash are receivables, representing money owed you from customers. When you receive the money, the receivable turns into cash. Next in assets are “inventories.” Since inventory is not as liquid as either cash or receivables, this falls below them on your balance sheet. Following current assets are property and equipment that are typically carried at cost.
You will also notice “depreciation” on a balance sheet prepared by an accountant. Depreciation is a non-cash expense and is nothing more or less than an attempt to record that these assets go down in value over time. IRS Publication 946 “How to Depreciate Property,” contains information that will give you a better understanding of depreciation.
One reason this particular financial statement is called a “balance sheet” is that assets always equal your liabilities and owner’s equity. This is called double-entry bookkeeping, and is the type done in nearly every business. The reason double-entry bookkeeping is the accounting gold standard is that it serves as a check to make sure a transaction has been properly recorded. For example, let’s say the first thing you buy is a desk. You have an asset of office equipment. If you paid cash, you don’t owe any liabilities so your interest in that desk is called your equity (on the other side of the ledger).
Similarly, other transactions will give rise to an increase in assets and/or an increase in liabilities or equity. For example, looking at our balance sheet example under current liabilities (again, from most liquid to least liquid) your account payables are the first item listed. After that there are items called “accrued liabilities,” which usually refers to payroll taxes and sales taxes that may not be due for another month or two.
Also under current liabilities is debt that is due within a year. So, the current 12 months of payments for equipment would be shown as a current liability. Following that we have long-term debt, which are items that are due after the current year.
Following total liabilities is the section called “owner’s equity” which is the owner’s interest in the business. If we take all the assets of the business, $37,000, and subtract the total liabilities, $18,000, there is a difference of $19,000. Of this $19,000 amount, $13,000 is from past income and $6,000 is from income earned during the current accounting period, thereby balancing out $37,000 for both assets and liabilities and owner’s equity.
When bankers look at a financial statement, they are interested in various financial ratios. Ratios help indicate the financial strength of a business and how the business can handle payback of loans. For example, current ratio is current assets divided by current liabilities. If your current assets are less than your current liabilities, a red flag will go up because it would indicate a risk of insolvency during the present year. Various industries will have different levels of ratios. You can track your ratios with others in your industry to see how your business compares. Your banker will probably be most interested in your owner’s equity.
Income Statement
The income statement (also called the “Profit and Loss” statement), unlike the balance sheet, covers a period of time, usually monthly or quarterly. Usually year-to-date figures are also presented to show how the business is doing during the current accounting year. In the example shown here, the financial statement covers a six-month period and shows the activity for the current month as well as the year-to-date total of the prior five months plus the current month, for a total of six months.
The income statement and the balance sheet tie together. Look back on the balance sheet and you’ll see current earnings of $6,000. The income statement shows this same $6,000, which was the profit for the last six months.
Your income statement will disclose valuable information. You will see a section for sales as well as a breakdown of all your expenses, leading down to the net profit for the period. The more current your financial statement, the greater will be its value. If you see a bad trend developing, you can take action at once.
Computer programs can produce financial statements with a keystroke, which is why you need to acquire the computer skills and software that are appropriate for your particular business.
Cash Flow Control
Cash fuel drives you in business just as jet fuel keeps a plane aloft. A pilot is very careful to accurately predict the fuel requirements. You should place the same importance on cash flow control because if, at any point in the future, you run out of fuel, like the pilot, you’ve got a BIG problem.
Cash flow control is a simple method of projecting your future needs for cash. It is an income statement covering future periods of time that has been changed to show only cash: cash coming in and cash going out and what your balance of cash is at the end of designated periods of time. This is a great tool because you can predict your future needs for cash before the needs arise.
In cash flow control, for each of a number of intervals of time, you make conservative estimates for your future sources of cash (IN) and future expenditures (OUT). Use low, conservative figures for IN items and use high estimates for OUT items. For the initial period, say a month, you start with the cash you now have. To this you add IN items and subtract the OUT items, which results in the cash at end of the month. The cash at the end of month becomes the starting cash for the next month.
The attached cash flow control spreadsheet shows that ending cash for this first period becomes the starting cash for the second period. The ending cash for the second period becomes the starting cash for the third period, and so on. Your projection should be made for an upcoming 12-month period. The projection will be a useful tool for you to arrange financing before it is required by showing your banker that you are sophisticated enough to provide for future cash in order to preserve liquidity.
You can use this simple cash flow format to make up your own cash flow projection for the business you have in mind. It is so simple, yet can be so valuable!
Ken Blake
CPA
What should a business be doing on a monthly basis to stay on top of their accounting?
Accounting and Cash Flow Punch List
Prepare frequent financial statements, at least monthly or even weekly.
Keep track of key income statement percentages. If you’re in manufacturing, your cost of goods sold percentage should be relatively the same as competitors in your industry.
Compare your income statement with prior periods.
To start with, you won’t need certified financial statements. Accountants have three levels of statements: certified, reviewed and compiled. For most startups, the compiled type will work; that is, your accountant prepares the financial statement with a letter stating that the numbers are based on the information you have provided.
From the beginning, maintain good internal controls. Learn from the practices used in your industry to prevent dishonesty and shrinkage. Shrinkage includes shoplifting and other types of stealing, which results in the “shrinkage” of your inventory.
Do not delegate the authority to sign checks or purchase orders.
Don’t use money that you have withheld for payroll taxes or sales taxes for other purposes. You will be a trustee of funds belonging to the Internal Revenue Service, Social Security Administration and your state’s sales taxing authority. A “payroll service provider” can be used to manage these responsibilities.
Keep in mind that liquidity is not the same as making money. You can be making a profit and still go broke by running out of cash. Learn and practice cash flow control.
Look ahead and write out your list of projected financial requirements including premises, equipment, staff and working capital.
Arrange for financing well before the need arises.
Top Ten Do’s and Don’ts
THE TOP TEN DO’S
Learn basic accounting before you go into business. Go to school if necessary.
Consult and retain an accountant familiar with your industry before you start.
Determine what accounting software program works best for your business.
In the beginning, do your own bookkeeping to gain knowledge of your accounting.
Set up inventory policy and internal controls including safeguards against dishonesty.
Reconcile your bank account at least once a month when your bank statement is received.
Maintain and update your cash flow control spreadsheet monthly.
Plan to outsource your payroll and payroll reporting to a payroll service provider.
Prepare financial statements at least monthly.
Keep your business records separate from your personal records.
THE TOP TEN DON’TS
Delegate the authority to sign checks to anyone.
Use money withheld for payroll taxes or sales taxes for other purposes.
Commingle personal assets with your business assets.
Delegate cash flow projections–your lifeline to liquidity.
Be optimistic in sales projections or conservative in expense projections.
Rely on verbal agreements on any important matter including purchases.
Pay an invoice without matching it to your purchase order.
Delegate your relationship with your lending sources.
Wait to establish credit sources until you have a need for financing.
Overlook seeking advice from your accountant and lawyer on important financial matters.
Business Plan for Session 11: Accounting and cash flow
We heartily recommend that you download the individual business plan template for this session and complete it now:
Section 11: Accounting and Cash Flow
Instructions on filling in the business plan template:
Each box has a permanent title in CAPITAL LETTERS.
Below each title is a sentence starting with an “Insert here” sentence. This will suggest information to insert. The boxes will expand as you take up more room so use all the space you need.
After completing each box, delete the “Insert here” sentence, which will leave only the permanent title of the box and the information you have inserted.
We suggest that you fill in each section of the business plan
as you proceed through the course.
The full template for all sessions 1-15 can also be downloaded into your computer as a single document:
Section 1-15: (Full Business Plan Template)
Include sufficient research findings and background materials. Make it interesting by the use of background data, your biography, charts, demographics and research data. When your business plan is completed, print off and assemble the 15 sections.
Many other business plan formats are available in libraries, bookstores and online.
Further Learning
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05.14
12
by admin ·
How to Write a Financial Analysis of a Cash Flow Statement
How Is the Statement of Cash Flow Used in a Financial Statement Analysis?
Perhaps the best way to analyze a company’s financial statement is to ask the perennial question: Is the business making money? Although a query focusing on profitability does not cover the full spectrum of corporate operations, it gives investors and financial analysts the information necessary for better decision-making. Cash-flow and financial-position statements also provide valuable data to investors, the public and regulators — especially when it comes to gauging companies’ liquidity.
Find the most suitable software for your accounting needs, talk to Caloundra Book Keeping.
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Financial Statement Analysis
Investors usually like a company that is forthcoming with performance data, especially when it conveys to the marketplace a clear and specific conclusion about its financial standing. By analyzing the firm’s financial statements, various groups attempt to lift the veil on corporate operations and understand how the business is able to make ends meet. Financial-statement analysis is a systematic evaluation of corporate accounting reports with the ultimate goal of pinpointing such items as performance and solvency. A complete set of financial statements includes a statement of cash flows, a statement of financial condition, a statement of shareholders’ equity and a statement of profit and loss.
Cash-Flow Statement
Also known as a liquidity report or statement of cash flows, a cash-flow statement recognizes the importance of liquidity management in a company’s strategic vision. It tells investors how well top leadership manages corporate funds and what investments get the bulk of the firm’s cash. A liquidity report includes cash flows from operating, investing and financing activities.
Ratio Analysis
In the competitive landscape, the main question may no longer be: Is the firm financially sound? The broader interrogation may be whether the business is reaching its full potential with the resources it has, and whether its existing business plans are still viable for bringing in revenues and spurring customer loyalty. Ratio analysis enables investors to read between the lines of financial reports, helping them make sense of strategies to increase corporate profits. The practice makes extensive use of such cash-related metrics as working capital and current ratio. Working capital evaluates short-term cash and equals short-term assets minus short-term debts. Current ratio, a liquidity indicator, equals short-term resources divided by short-term liabilities.
Horizontal Analysis
Horizontal analysis enables cash-flow reviewers to see how a company’s funds change from one period to another. For example, financial analysts may compare customer remittances over a three-year period and determine that payments have steadily increased over the time frame. They can then conclude that these positive changes result from the effective collection tactics management has implemented over the years.
Vertical Analysis
A cash-flow reviewer who vertically analyzes a liquidity report attempts to see how all accounting items compare with one specific item, also called the benchmark. For example, the reviewer can compare annual customer remittances with total operating cash flows to determine how much collection and sales efforts contribute to the firm’s overall cash balance.
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05.14
12
by admin ·
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This is a collection of startup tips covering software engineering, infrastructure, PR, conferences, legal and finance. They describe best practices for an early-stage startup. We hope that you will find these tips useful, but also please remember that they are based on subjective experiences and not all of them will be applicable to your company.
If your looking for a great bookkeeper, you have found one at Bookkeeping Services Caloundra.
These tips originally appeared as separate posts on the BlueBlog , the blog of AdaptiveBlue. [Ed: Alex Iskold is founder and CEO of AdaptiveBlue, as well as being a feature writer for RWW.] Since the posts were quite popular, we decided to share them with the ReadWriteWeb audience during the holiday season.
8 Software Engineering Tips for Startups
Since software is at the heart of every modern startup it needs to be elegant, simple and agile. Instead of having an army of coders it pays to have a handful of smart, passionate engineers who love what they are doing instead. A small, passionate team can generally accomplish more than an army. Even as the company grows you can still accomplish a lot with a small team.
Tip 0: You must have code
Working code proves that a system is possible, and it also proves that the team can build the system. Having working code is a launchpad for your business. After it is ready, the business can happen. In the old days, tech companies were funded based on an idea written on a piece of paper, but those days are long gone. Today, a startup needs to have not only working code, but an assembled system and active users in order to land venture capital money. Software engineering transitioned from the post-funding exercise to the means to being funded.
Tip 1: You must have a technical co-founder
Any startup starts with an idea and just a few people. A lot of startup co-founders these days are techies, passionate about technology and life. It was not always like that. Just a few years back a purely technical founding team would have had a hard time raising money because there was a school of thought that only people with MBA degrees could run a company. Now, having a technical co-founder is a benefit.
Tip 2: Hire A+ engineers who love coding
Until recently, building a large scale system that worked was like black magic. Most software projects languished for years, and had large engineering teams who had little consensus on what needed to be done and how to accomplish it. The resulting systems were buggy, unstable, and hard to maintain and extend. The problem was that there were just too many people who were not that good working on writing software. Startups cannot afford to have less than A+ engineers.
Tip 3: Keep the engineering team small and do not outsource
A team of 2-3 rockstar engineers can build pretty much any system because they are good at what they do, love building software, focus on the goal, and don’t get in each other’s way. A team of 20 so-so engineers will not get very far. The mythical man-month book debunked the notion of scaling by adding more programmers to the project. The truth is that most successful software today is built by just a handful of good engineers. Less is more applies equally to code and to the number of people working on it.
Tip 4: Ask tough questions during the interview
There is nothing worse than being soft during an interview with a prospective employee and hiring the wrong person into the company as a result. This is bad for you, but more importantly bad for the person. In the end you will end up parting ways, but it would be best to just not make this mistake to begin with. So be tough and ask a lot of technical questions during the interview.
Tip 5: Avoid hiring non-technical managers
You do not need these type of people on a small team. If everyone is sharp, knows what they are doing and executes on a task, why do you need a manager? People who try to overlay complex processes on top your objectives are going to slow you down and make you frustrated.
Tip 6: Cultivate an agile culture
Modern startups need to move very quickly. There is no room to plan for 6 months and then execute because someone else will get there first. The new approach is to evolve the system. Of course you are doing planning for the next release, but you are iterating quickly, doing frequent builds, and constantly making changes. Coding becomes sculpting.
Tip 7: Do not re-invent the wheel
A lot of startups go overboard with their infrastructure. This includes two types of things – rebuilding libraries and building your own world-class scaling. On the first point – there are so many fantastic open source libraries out there that it just does not make sense to write them in house. Whether you are using JavaScript or PHP or .NET or Python or Ruby, there are likely already libraries out there that can help you. Re-writing existing libraries is a waste of your time and you are not likely to do it better.
Read the complete post on BlueBlog
5 Infrastructure Tips for Startups
It is much easier to build web-scale startup these days because of great hosting services like Rackspace, web services from Amazon, and tracking systems like Google Analytics. In this post we take a closer look at these solutions from the perspective of a startup.
Tip 1: Use the best hosting provider you can afford
As a startup, you are always looking for ways to keep costs down. One of the first areas that seems to be a good place to trim costs and save money is on web hosting. However, skimping on hosting is a mistake that will cost you a lot of time, which is more valuable than the money you will spend. It is okay to go with a cheaper provider when you are just developing the code, but your production needs to run on a rock solid system.
Tip 2: Use Amazon Web Services
You are still likely to need a regular hosting provider, but you should be aware of an increasingly important alternative – Amazon Web Services. This offering from the e-commerce giant is a must-consider piece of infrastructure for any startup. Specifically, four services make it easier to build large-scale web applications: Simple Storage Service, Elastic Compute Cloud, Simple DB, and Simple Queue Service.
Tip 3: Use Google Analytics in standard and creative ways
Early on, startups need to track things. Tracking results are useful for metrics, which in turn help measure growth and success of the company. Without tracking, it is difficult to determine what is going on. Google Analytics is packed with features, but more importantly it has an API. The reason this is important is because you can actually build your own dashboard that offers a different, customized view of the same information.
Tip 4: Start with defaults, then tune the system
In 99.9% of cases you are better off starting with defaults, and in 99.9% of cases you are not going to end up where you started. The trick is to go from those defaults to custom settings in the proper way. Probably the worst thing you can do is premature tuning. Like premature optimization of source code, this leads to ugliness. Why guess before you even know what is going to happen to the system?
Tip 5: Hire or contract a good system administrator
This is the simplest tip of all. Like programming, business development and accounting system management is a specialty best left to professionals. I know my way around Unix, I even used to be a system administrator 15 years ago, but I am not up to par. When you reach a certain size and scale, you need a dedicated person running the hardware and OS show.
Read the complete post on BlueBlog .
11 PR Tips for Startups
PR is a tough game. When the market is red hot, it’s hard to get noticed because there are a lot of companies competing for air time. When the market is cool it is hard to get people to pay any attention because they are not interested (tired after the hot market). And for startups it’s even tougher to have effective PR because a startup can’t throw a lot of money at the problem. In this post we look at how startups should approach PR.
Tip 1: Hire a PR firm
This may come as a surprise, but you do need a PR firm. An early stage startup can’t always afford one, but that does not mean that it is not necessary. The number one reason you need a PR firm is because of their connections. They know people, because this is what they do – network.
Tip 2: Do not expect PR people to intimately learn your product
This is not their role. They are connectors, they are the bridge between you and the media. They are responsible for putting you in front of the right press. This is their job. It is your job to pitch your product, to explain why it is so awesome and why everyone should be using it.
Tip 3: Get PR people who understand your space
PR companies have specialties, not all of them are right for you. For example, if you are in the consumer Internet space, do not hire a PR firm that specializes in mobile technologies – they’re not the same thing. If you are a consumer Internet company, you need a firm that knows blogosphere inside out, because this is how you reach your early adopter crowd.
Tip 4: Launch your product at a conference
The reason for this is that you are likely to get a lot more media coverage and instant attention than if you launch just any old time. But the conference needs to fit. For launches, you can do one of two things: launch at a specialized conference such as DEMO (which we recommend) or you can launch in a non-startup conference which has a launchpad feature. For example, Web 2.0 events typically present 10-15 startups, as do conferences like Supernova. It does not make sense to launch at a conference that does not have any startup participation because it won’t be the proper context for your launch.
Tip 5: Create demos, videos, pictures, and slides
A newsflash: press releases are dead. We have found them to be completely ineffective. To the point of zero leads. Zero. Instead, you need to prepare a new kind of media. Remember that people are spoiled these days, so they will have high expectations. If you think you can show up and tell them that you got the best new technology, hand wave, and then expect a write up, you are dreaming. You need to prepare. You need to distill your product and the message into something easily digestible, and you need to be very clear.
Tip 6: Do not launch or release big news on Monday or Friday
This may or may not be obvious but there are only 3 days when things get done: Tuesday, Wednesday, and Thursday. These are the best days to launch your product, in that order. Monday could work, but in the afternoon, because in the morning people still can’t believe that the weekend is over. Fridays are really bad for PR – everyone is just waiting for the weekend.
Tip 7: Emailing after an introduction is more effective
One thing you have to understand about A-list bloggers like Michael Arrington, Richard MacManus, Om Malik and their colleagues is that they are getting thousands of emails each day from startups. It is physically impossible for them to process and respond to all that email. You may find that unfair, but this is just a simple fact. So once again, this is where a PR firm or at least a friendly connection via LinkedIn will come in handy. If you are introduced, the chances are far better that you will be heard. (No guarantees that you will be written up.)
Tip 8: Set an embargo and stick with it
This is something that we had to learn over and over again. Everyone wants an exclusive. Each blog that does news, wants to be first with the news. This is just the name of the game. If you do give an exclusive to one, you are running a big danger of not getting coverage in others. The way around this issue is to setup an embargo (meaning they can’t blog about your launch until certain time) and then brief everyone prior to that and give them time to write about you.
Tip 9: Make sure people do not write without a brief from someone in your company
There has been a trend lately of writing based on a press release. While this does get you coverage, it is likely to do more bad than good. It is not just that you want to be heard, you want to be heard correctly. The key to that is to get a chance to tell your story directly to a reporter. A post based on a press release is likely to be wrong and harmful, while a post based on a one-on-one interaction is more likely to get it right.
Tip 10: Understand that major media coverage will not happen overnight
Chasing an article in a major magazine or newspaper like Wired or MIT Technology Review or the New York Times is not worth it. Their reporters will not write a feature until it becomes crystal clear that you are a huge success and are worthy of a feature. Instead of spending efforts on that, you are better off making the product really great and getting people to use it and evangelize it for you. The mainstream media will find you.
Tip 11: Community is the best PR strategy
It is very difficult to achieve continuous PR unless you do it via your own users. A thousand passionate users who have blogs and social network profiles can promote your product and expose you to more people than coverage on top blogs and magazines. For better or worse, news today is cheap. A post stays on the main page of a blog or newspaper site for a few hours and then scrolls out into a black hole. Google occasionally brings an old post to those who seek it, but realistically, news just flies by and no one wants yesterday’s news.
Read the complete post on BlueBlog .
7 Conference Tips for Startups
We have been to quite a few conferences already and more than a few people have asked me which conferences are good. The problem is not that some conferences are bad, it’s just that some conferences may not be the right venue for your startup. In this post we are going to share with you our experiences in the tech conference world.
Tip 1: Launch at DEMO
DEMO is a great venue because its sole focus is to launch companies. Despite the fact that you will be one of over sixty participants, you will be given the stage and attention. The show is very intense, as it takes place in only two days. Each company is given exactly 6 minutes. The stage presentations are mixed with pavilion presentations which are a few hours long.
Tip 2: Sponsor/attend a few high impact conferences
ETech, SWSX and Defrag are our top picks so far. Make sure there is a fit between the conference and your product. Check out who else is sponsoring, and get feedback and blog posts from last year’s attendees before signing up.
Tip 3: Rent the best equipment you can afford
Whatever it takes to make your product look good. It simply does not make sense to spend money on the sponsorship and try to save on the equipment. Save on the hotel and airfare instead.
Tip 4: Save money by staying in a hotel near by
You can stay anywhere reasonably close. The only thing you’d be missing is hanging with the people at the bar in the evening. Then again, that could be useful because drunk people talk more.
Tip 5: Don’t grab people to look at your product
Some people do it, I am against it. How would you feel if you were grabbed and pressured into watching a demo?
Tip 6: Don’t tolerate upsells
This is a sensitive topic, but it is a very important one. Unfortunately a lot of people at these events are not there to see you, they are there to use you. Consider people who are looking for a job. It is perfectly reasonable for someone to come over and hand you a resume. It is not reasonable for them to take up a lot of your time or to ask a lot about your company. Get their information quickly and tell them you will be in touch.
Tip 7: Organize PR around the conference
Conferences are a great and maybe rare chance to interact with reporters and bloggers face-to-face. However, it is not a straightforward practice. Reporters are humans and as such, they play games. If you approach them head on they will say no for no particular reason. Somehow you need to make them feel special, which is not easy. It is a good idea to get a press list and contact reporters in advance and arrange appointments. You may get a no over the phone, but they might just come by your booth anyway when they have a free minute. If this sounds like dating, it very much feels that way too.
Read the complete post on BlueBlog .
5 Legal and Finance Tips for Startups
You are unlikely to think about lawyers and accountants when you dream up a piece of software that will change the world. Yet, if you want to build a real company you need to take care of the basics. While not the primary focus of your business, administrative functions are very important because they have impact on your daily life and the long term growth of your business. The main trick is to be aware of what needs to be done and do it quickly and effectively.
Tip 1: Setup a real company
The first step to setting up a business is to declare it to the world. Lots of startups in the garage might think that setting up a company does not make sense until you get the business off the ground. The idea of first writing the code and then incorporating is just plain wrong. First you need to figure out what kind of company are you creating and what is the ownership structure. Setting up a company is cheap and quick and it is an important starting point for your business. What you get in return is: legal protection, alignment of everyone’s expectations, and basic knowledge about how companies work.
Tip 2: Get a Delaware LLC or Inc.
Likely the best way for you to setup a company is to create a Delaware Limited Liability Corporation (LLC) or a full C-Corporation (Inc). Delaware has traditionally been an attractive place for companies to set up shop because of its tax laws. The important difference between an LLC and an Inc is in how they treat taxes and the number of shareholders. The LLC is generally much simpler to maintain and it allows pass through taxes, which is good for companies that have income in the early days. Revenue can be treated as income to shareholders and only taxed once. In an Inc the tax is paid twice, first by the corporation and then again by the employees, as part of their regular withholding.
Tip 3: Don’t save money on a lawyer
A lawyer? Are you kidding me?! Why would we need a lawyer for our brand new startup in a garage? As it turns out, there are a whole bunch of reasons and there is not much wiggle room here. Because a company is a legal entity having a lawyer is essential. For starters here is the list of things and documents that your lawyer should do for you in the first days and months of your business:
Incorporate your business
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05.13
12
by admin ·
Financial Finesse Special Report: Financial Stress Among US Employees
By Financial Finesse, May 13, 2011
An estimated 60% of illness is directly or indirectly caused by financial stress, costing most large and medium sized companies millions of dollars per year in health care expenses. Because of the serious health risks that employees with financial stress face, and the potential effects this has on employers and our economy as a whole, we have compiled this report to gauge employees” perceived levels of financial stress and their causes. Click to see summary of findings
Find the most suitable software for your bookkeeping needs, talk to Caloundra Book Keeping.
Financial Finesse Trends in Employee Financial Issues Q1 2011
By Financial Finesse, April 29, 2011
Financial wellness is continuing to improve for most employees, particularly in the areas of money management skills, but retirement preparedness is still at dangerously low levels, with a drop in retirement confidence from Q4 2010 to Q1 2011.
Key Trends from the Report
- Employees are improving their cash management skills, making improvements since the first quarter of 2010 in all areas of cash management:
72% of employees report having a handle on cash flow (up from 64% in 2010)
54% of employees report having an emergency fund (up from 48% in 2010)
88% of employees report paying bills on time (up from 82% in 2010)
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