One might be resulted in believe that profit may be the main objective in a business but in reality it is the dollars flowing in and out of a business which will keep the doors open. The concept of profit is considerably narrow and only looks at expenses and income at a particular point in time. Cashflow, however, is more powerful in the sense that it’s concerned with the movement of profit and out of a business. It is concerned with enough time of which the movement of the amount of money takes place. Profits do not necessarily coincide making use of their associated cash inflows and outflows. The web result is that dollars receipts often lag cash payments even though profits may be reported, the business may experience a short-term money shortage. For this reason, it is vital to forecast cash flows and project likely gains. In these terms, it is important to know how to convert your accrual revenue to your money flow profit. You have to be in a position to maintain enough cash readily available to run the business, however, not so much concerning forfeit possible earnings from other uses they said.

Why accounting is needed

Help you to function better as a business owner

Make timely decisions
Know when to employ a team of employees
Learn how to price your products
Know how to label your expense items
Allows you to determine whether to develop or not
Supports operations projected costs
Stop Fraud and Theft
Control the biggest problem is internal theft
Reconcile your books and stock control of equipment
Raising Capital (help you to explain financials to stakeholders)
Loans
Investors
What are the GUIDELINES in Accounting for Small Businesses to address your common ‘pain points’?
Hire or consult with CPA or accountant
What is the best way and how often to get hold of
What experience do you have in my industry?
Identify what is my break-even point?
Can the accountant measure the overall value of my business
Can you help me grow my company with profit planning techniques
How will you help me to get ready for tax season
What are some special factors for my particular industry?

To succeed, your company must be profitable. All your business objectives boil down to this one simple fact. But turning a profit is easier said than done. In order to boost your bottom line, you must know what’s going on financially at all times. You also have to be committed to tracking and knowing your KPIs.
What are the common Profitability Metrics to Track running a business — key performance indicators (KPI)

Whether you decide to hire an expert or do-it-yourself, there are some metrics that you ought to absolutely need to keep track of at all times:

Outstanding Accounts Payable: Exceptional accounts payable (A/P) shows the balance of cash you now owe to your suppliers.
Average Cash Burn: Average funds burn is the rate of which your business’ cash balance is going down on average each month over a specified time frame. A negative burn is a great sign because it indicates your business is generating income and growing its money reserves.
Cash Runaway: If your business is operating baffled, cash runway can help you estimate how many months you can continue before your business exhausts its cash reserves. Much like your cash burn, a poor runway is a wonderful sign that your business is growing its cash reserves.
Gross Margin: Gross margin is really a percentage that demonstrates the full total revenue of your business after subtracting the expenses associated with creating and selling your business’ products. It is a helpful metric to recognize how your revenue comes even close to your costs, enabling you to make changes accordingly.
Customer Acquisition Cost: By knowing how much you spend on average to get a new customer, you can tell how many customers you should generate a profit.
Customer Lifetime Value: You must know your LTV so that you can predict your future revenues and estimate the total number of customers you have to grow your profits.
Break-Even Point:Just how much do I need to generate in sales for my company to make a profit?Knowing this number will highlight what you must do to turn a earnings (e.g., acquire more buyers, increase prices, or lower operating expenses).
Net Profit: This can be a single most important number you have to know for your business to become a financial success. . If you aren’t making a profit, your organization isn’t going to survive for long.
Total revenues comparison with last year/last month. By monitoring and comparing your total revenues over time, you’ll be able to make sound business selections and set better financial objectives.
Average revenue per employee. It’s important to know this number to enable you to set realistic productivity goals and recognize methods to streamline your business operations.
The following checklist lays out a suggested timeline to take care of the accounting functions which will keep you attuned to the functions of one’s business and streamline your tax preparation. The reliability and timeliness of the quantities entered will affect the key performance indicators that drive organization decisions that require to be made, on a daily, monthly and annual foundation towards profits.
Daily Accounting Tasks

Review your daily Cash flow position so you don’t ‘grow broke’.
Since cash may be the fuel for your business, you never desire to be running near empty. Start your day by checking how much cash you have on hand.
Weekly Accounting Tasks

2. Record Transactions

Record each transaction (billing buyers, receiving cash from consumers, paying vendors, etc.) in the correct account daily or weekly, based on volume. Although recording dealings manually or in Excel sheets is acceptable, it is probably simpler to use accounting program like QuickBooks. The huge benefits and control far outweigh the cost.

3. Document and File Receipts

Keep copies of most invoices sent, all cash receipts (cash, check and charge card deposits) and all cash repayments (cash, check, charge card statements, etc.).

Start a vendors data file, sorted alphabetically, (Sears under “S”, CVS under “C,”etc.) for easy access. Create a payroll record sorted by payroll date and a bank statement file sorted by month. A standard habit is to toss all paper receipts into a box and try to decipher them at tax time, but if you don’t have a small volume of transactions, it’s easier to have separate documents for assorted receipts kept arranged as they come in. Many accounting software systems enable you to scan paper receipts and prevent physical files altogether

4. Review Unpaid Bills from Vendors

Every business must have an “unpaid vendors” folder. Keep a record of each of one’s vendors that includes billing dates, amounts credited and payment deadline. If vendors make discounts available for early payment, you really should take advantage of that should you have the cash available.

5. Pay Vendors, Sign Checks

Track your accounts payable and have funds earmarked to pay your suppliers on time to avoid any late fees and maintain favorable relationships with them. In case you are able to extend due dates to net 60 or net 90, the higher. Whether you make payments on-line or drop a check in the mail, keep copies of invoices directed and received using accounting application.g