How to Save Money on Bookkeeping Fees

Many times people will use their business account for personal use. For a bookkeeper, having to wade through pages of bank statements figuring out what is personal and what is business is a very time consuming exercise, and you are paying for it. Your personal transactions are completely separate to your business transactions, so it is a good idea to keep them separate.

Manage the Pennies and the Dollars will Follow

 Your business may be small, but it helps to think big. By thinking big I mean why not manage it with the same principles as a large business. A professionally run business would pay the owners or director's a wage who would then use a personal account to transact personal transactions. A professional business would have a budget. They would not hope for the best and spend money when there seems to be some extra in the bank account. They would have a budget in place from the start of the financial year, with anticipated income, expenses and profit.

Small Business Formula

I am often observing small businesses that are successful or not. Often times it is quite evident in the restaurant industry. Recently a small cafe started up in Southport. It is a very basic model, with a nicely designed warm atmosphere, affordable, fast, healthy and delicious food. The cafe itself could barely fit ten people, but the takeaway food style set up is a formula that is working. The things I notice when entering a new cafe or restaurant are the following

1) How does it make me feel. Does it have an attractively designed look that makes me enjoy being there? 
2) Are the staff efficient and friendly?
3) Is the product they are selling (ie food) consistent and reliable. There is nothing worse than having a good meal one visit and a bad meal the next.
4) Are the prices good value? It’s one thing to pay good money for an upmarket meal with a luxury atmosphere but quite another to pay top money where there are fluro lights and paper napkins.

I think the formula of a successful cafe or restaurant is something we can all take to our businesses. People are still spending but where and why? At the end of the day, with more ‘tightening of the belt’ going on, customers are after value for money and a great experience.

Keep an Eye on the Books

Many small businesses are still struggling  or closing down. There are many vacant offices and shops all over the place and some business sectors where it is plain tough to make money. Many in the business community are still feeling the ripple effect of the GFC.  It is a time when you need to keep a really good eye on your books and how your business is performing.

Some of the things you should be keeping an eye on are: a) staff performance and costs in proportion to your sales, b) how fast are your debtors paying you in proportion to your terms, c) how much stock do you have and is what you are buying sitting on the shelf for a while, d) are you getting the best price for what you are buying, e) are your expenses too high, f) are you drawing too much money out of the business for personal use.

The other thing to keep an eye on is your debt levels. Banks are and have been getting tougher on lending. If you have high levels of debt and high interest payments, slower sales and cash flow will make your debts more difficult to repay  – banks don’t like this and won’t easily lend more money if you are in trouble. This can ultimately be very detrimental to your business.

Whilst we have been lucky in our area to be free from the problems of natural disasters, having contingency plans in place seems like a good idea because you just don’t know what can happen.

Self-talk

Have you ever done an audit of how you talk to yourself? Do you find that you talk to yourself in a positive manner or is it mostly negative? Have you observed how others talk – if their talk is negative or uplifting?

Try to become more aware of how you are talking to yourself and see if you can turn those negative thoughts into something more positive. Try it for a day and see how you feel, put it into practise and see if your life changes – or at least your attitude towards life.

Favourite Quotes & Thoughts from Og Mandino.

• Always do your best. What you plant now, you will harvest later. 
• All your problems, discouragements, and heartaches are, in truth, great opportunities in disguise. 
• Every memorable act in the history of the world is a triumph of enthusiasm. Nothing great was ever achieved without it because it gives any challenge or any occupation, no matter how frightening or difficult, a new meaning. Without enthusiasm you are doomed to a life of mediocrity, but with it you can accomplish miracles.

• I will make love my greatest weapon and none on who I call can defend against its force. …My love will melt all hearts liken to the sun whose rays soften the coldest day.
• Realize that true happiness lies within you. Waste no time and effort searching for peace and contentment and joy in the world outside. Remember that there is no happiness in having or in getting but only in giving. Reach out. Share. Smile. Hug. Happiness is a perfume you cannot pour on others without getting a few drops on yourself. 
• Take the attitude of a student—never be too big to ask questions, never know too much to learn something new. 
• Treasure the love you receive above all. It will survive long after your gold and good health have vanished. 
• Work as though you would live forever, and live as though you would die today.

Synergy

Synergy is a concept that was noted even before the advent of cars. Originally one horse power was what you got when you put one horse in front of a buggy. So how many horsepower do you get when you put two horses in front of the same buggy? If you think it’s two, you’re way off. Even if horses aren’t trained at running together, you’ll get four or five horsepower. If they’re trained, you can get as much as ten. This is synergy. Think about how much easier your life can be when you allow this phenomenon to take place in your life. Going it alone gives you one horsepower. Working with others allows you to achieve much more. The challenge is to allow others to share in your life.

Why do People Work For You?

According to Abraham Maslow, a human relationist, people are motivated to satisfy needs at five levels.

PHYSIOLOGICAL NEEDS – This translates to the need for things like food, water, air.
SECURITY NEEDS – Desire for housing, clothing, free from worry about money and job security. Knowing their job will be there if they get a mortgage on a new home.
BELONGING NEEDS – These include the need for love, affection and to be accepted by one’s peers. A manager can help satisfy these needs by allowing social interaction and by making employees feel part of a team.
ESTEEM NEEDS – The need for positive self-image and self-respect and the need for recognition and respect from others.
SELF ACTUALISATION NEEDS – This involves realising one’s potential for continued growth and individual development. These are the most difficult for manager’s to address. A manager can help to achieve this by promoting an organisational culture in which self-actualisation is possible.  Some of the ways this could be done is by giving employees the chance to make decisions about their work and the opportunity to learn new things about their jobs and the organisation.

Budget is Not a Dirty Word

 Budget is often negatively associated with tight restrictions on how much a business or a person can spend, however a good budget can leave plenty of room for planned movement. By planning anticipated income, you can then plan for anticipated expenses such as cost of sales, telephone, rent, staff and owner's wage, marketing, office furniture and profit. By planning you can generally get a good idea of how much you will earn, spend and have to pay in tax. By not dipping into your business account for personal expenses, there should be money left for the tax bill at the end of the year. A visit your accountant before 30 June is a great idea to plan for any tax issues that may arise. Depending on your plans for the following year, your accountant can usually give businesses some good advice on what to do to avoid any huge tax bills.

Preparing a Budget

 The great thing about preparing a budget is you can generally be prepared for things that normally often surprise. It is important to plan and prepare. To plan a budget, start with how much you anticipate earning, this can generally be estimated on past yearsÕ income and planned marketing for the year. You can then calculate your cost of goods (not applicable to all businesses) which is generally a percentage of income, depending on what type of business you have and can generally be estimated from last year's cost too. Whatever is left is what you can plan to spend on the business or keep as profit. Generally your previous year's profit and loss report can give you a good idea of how much and what you are spending on the business and can also help you see where you could save money.

Things to Consider When Preparing a Budget

Some of the expenses to consider when budgeting are: income, cost of goods sold, wages/salaries, owner's payments, contract labour, phone, electricity, insurance, postage, office supplies, rent, rates, marketing, advertising, accounting, bookkeeping, motor vehicle fuel, motor vehicle repairs, motor vehicle insurance, new office furniture or computers.

Bookmarx business services can help you plan and prepare a budget as well as help you manage your business finances.

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