Smart Money Choice$

Most businesses have at least a few ways to accept payment from their customers. It may be in the form of collecting cash, debit or credit cards, or by check, either up front, at the time of delivery of the product or service, or sometime after the sales transaction has been completed.

But more and more businesses, like everything else, are collecting their payments online as well. How about you? Have you jumped on the online business bandwagon yet?

On the Internet, nearly everything is faster. Collecting your money online is no exception. And that’s a great reason to accept payment from your clients online as well.

What Are Your Options?

Being paid for products you sell can be handled with the help of an online shopping cart. Payment is usually made using a credit or debit card, and products are delivered either electronically or via postal mail.

And now, even if you sell services, you can make it very easy and convenient for your clients to pay you too. In fact, with online services like PayPal, you don’t even need to have your own merchant account to accept credit cards and electronic checks.

But the latest development I’ve stumbled upon for collecting your money online is a new, free service provided by Intuit, the makers of QuickBooks. It’s called Intuit Billing Manager.

It is an ideal service for service professionals who are just getting their business rolling. While I’m obviously an advocate of keeping complete bookkeeping records, using a program like QuickBooks to handle both your bookkeeping and your invoicing function, if you want to just jump in and get your business rolling and pulling in payments from your  clients, this is an easy and economical way to do it.

How Does It Work?

Now I’ll tell you up front, this free online billing solution is Intuit’s way to entice you to sign up for their Merchant Services. But it’s certainly not necessary to sign up for a merchant account, and they really are making it easy for the little guy or gal who operates what they call a “micro-business” to get their billing organized and functioning well – for free.

As the name implies, it is a way to create and manage your invoicing. With a free account you can…

• Easily create professionally designed estimates, invoices and billing reminders

• Print out your invoices for postal mailing, or send them by email

• Manage your customer information

• Use the service from anywhere you have web access, including an iPhone

If you want to accept credit card payments or electronic checks, you will need to upgrade to their merchant services for Billing Manager, but as of this writing, the rates are more reasonable than a regular Intuit Merchant Services account, with all the capabilities needed for a very small business.

If you’re just getting your business going, or if it has been a challenge for you to get your invoicing done and keep them organized, I highly recommend you use this new online billing program.

You can’t beat the price, and it really doesn’t appear that there are any sneaky back-door ways for them to suck you into a commitment you don’t want down the road. But when you are ready for a full-fledged bookkeeping program, you can easily export your Billing Manager information into QuickBooks Online Edition and grow from there.

And of course, the sooner you get your invoices sent to your clients, especially if it is handled via the Internet, the quicker you will get your money. And in this economy, faster cash flow is what will grow a stable business that lasts.

By the way – If you want more tips on not only maximizing your Accounts Receivable procedures, but kick-butt strategies for maximizing your business cash flow in the new economy. Go to the Cash Flow Mastery course website now.

Bonus Resources

Review of Intuit Billing Manager by PC Magazine

Intuit Billing Manager Fact Sheet (2009) – Please note that the services included in a free account have been expanded since the publication of this fact sheet.

Q: “Gabrielle, I’m in the market for bookkeeping services. Any suggestions for what to look for and what to expect in pricing?”

This is a typical inquiry I receive through my website. And for good reason. It’s a great question! Let me tell you why.

Doing the bookkeeping in your business won’t make it an amazing, profitable success. But NOT keeping up with the books properly, or not keeping track of your finances at all, can definitely kill your business. That’s why sooner or later, most entrepreneurs realize that it makes sense to get someone else to handle their books for them.

But that’s easier said than done.

When it comes to hiring a bookkeeper, whether in-house or virtually, there are many choices. The most popular options, however, can cause you BIG headaches and cost you thousands unnecessarily.

The biggest problem: Hiring someone who is not competent enough to handle the job.

Yes, you may already have QuickBooks software (admittedly designed for non-accountants) and a willing wife / girlfriend / friend of a friend who is ready to do the “data entry” for you. But that does not mean that you can simply hand over your financial information and get on with running your business. At least not without some nasty consequences down the road.

In fact, even if you search for and find someone who claims that they are a “qualified” freelance bookkeeper, you are not guaranteed clean financial reports for management, and accurate tax reporting. It’s just not that easy.

The scary reality is that anyone can call themselves a bookkeeper, and proceed to really screw up your books…and your business. I see it all the time. My clients pay me thousands as a QuickBooks consultant to come in and untangle their financial data after they’ve tried (unsuccessfully) to do their own bookkeeping, or hired a so-called “bookkeeper” to do it for them.

So, what’s the answer to the question above on what to look for when hiring a bookkeeper so you can save yourself from all the potential heartache?

Ask Questions, lots of them.

Just because someone says they run a bookkeeping service business or that they use QuickBooks doesn’t mean that they are qualified to do so.  Be proactive and ask the following questions:

* What training or experience do you have with double-entry bookkeeping? How do you keep your skills up to date?

* Do you hold any certifications for bookkeeping and/or QuickBooks?

* What type of businesses do your clients have? Are you familiar with my type of business or industry? Can you provide references?

* How do you handle transactions that are incomplete or unclear? (HINT: You do NOT want someone who simply codes everything to a “miscellaneous” account. They should be proactive, communicative and have a system for gathering all the needed information, taking responsibility for preparing complete records.)

If you are considering an in-house employee, I also recommend that you give that person a test to assess her skills. Don’t just accept whatever is listed on the resume. The American Institute of Professional Bookkeepers has a free test available for employers through their website (see Resources below).

What about pricing?

The cost for hiring outsourced bookkeeping services can run anywhere from around $25/hr. to $75/hr. or higher, depending on your location, the services provided, and how they are administered (on-site, virtually, or online).

When it comes to bookkeeping services, however, price is not always an indication of quality. If the most important factor in your decision is low price, realize that you may be setting yourself up for a mess that will cost much more to clean up later. Pay closer attention to true qualifications than the hourly rate.

If Your Budget is Too Tight and You Need to Do It Yourself

QuickBooks is the best software choice because of the user friendly interface. But you need to understand the key basics of the program to use it correctly. So you will need to investment in education.

There are inexpensive books, videos and in-person training classes available. Use what suits you best, just don’t wing it. Get the training needed to handle the basics adequately, or you will have problems later.

The investment you make now in starting the new year off right, whether by hiring a qualified bookkeeper or by learning how to do it right yourself until you can hire someone qualified, will give you a solid foundation for building and managing a solid, profitable business.

It’s just a smart choice.

Resources:

Where to find freelance bookkeepers:

QuickBooks ProAdvisor Database

American Institute of Professional Bookkeepers

Craigslist.org

Bookkeeper Hiring Test (for screening an employee):

QuickBooks Online Video Training:

QuickBooks Basics: New User Essentials

QB QuickTips Video Blog

This year is quickly coming to a close. It’s been a choppy one for most small businesses, especially in the cash flow department. How about you? Well I’ve got some good news for you.

There’s still time to make this year go down easy and pull in some fast cash. Here are five fast-results tips to boost your bottom line and end the year in the black.

1.  Ask for your money.

This the best time to start cleaning up your books and get caught up on outstanding invoices. Review your Accounts Receivable summary report and determine who owes you what. Then send out statements right away to remind your clients that they owe you.

With any luck, they’ll be in the process of cleaning up their books too and be glad to pay you to get all the tax deductions they can find.

If you’re already sending out statements regularly, encourage the slow pokes to pay you by credit card. They’ll still get the tax deduction for this year, and pay their credit card off later. But the point is, you’ll get your money now.

If you don’t already have a merchant account in order to accept credit cards, get a free PayPal business account. It’s fast and easy.

When all else fails with slow payers, simply pick up the phone to give them a friendly nudge. Getting in touch personally will not only remind them to pay you, but you may remind them that they’ve been meaning to contact you about additional products or services they need. So you may even get additional business out of the deal.

2.  Require a deposit on new projects.

If your slow-paying clients are looking for additional services or products, it’s the perfect time to implement a new policy. Start collecting deposits (also known as retainers) on new orders.

Starting with your slow payers is a great way to weed out the deadbeats. They won’t go for it. But your best clients (those who appreciate the value you provide) will.

Start charging a 25%-50% deposit up front on all new projects coming in. You will be amazed at how little resistance you will encounter both from new and existing clients. By doing this, you raise your clients’ perception of your professionalism and repel those who don’t truly value your services.

Don’t apologize. Just do it!

My own clients and colleagues who have had the courage to follow my advice on this higher standard are usually surprised by how easy it really is and the immediate increase in cash flow it ignites.

This tactic seems riskier than it really is. If you take the leap of faith, you’ll see an instant increase in cash flow and build a higher quality customer base.

3.  Stay in touch, run a special and ask for referrals.

Are all your clients aware of the different services (or products) you provide? Send out a year-end newsletter by snail mail and even include a small gift for your best clients.

Be sure you let them know about anything new that’s going on in your business, such as your new Web site, a new service offering, or specialized products you now carry. Include a card that lists all your services and products, along with your contact information for their easy reference. You want them to hold onto this information and keep it handy.

Consider running a special end-of-the-year promotion, or make a special offer to your best clients to encourage a final burst of sales for the year.

Tell your clients how much you enjoy working with them. Mention that you would love more clients just like them, so you’d welcome any referrals they could send your way. Offer a reward as a token of your appreciation too. Usually a small gift card will do the trick.

Just reminding your clients about who you are what you do will usually bring in some business. It will also alert them to the idea of sending you referrals. They won’t know unless you tell them.

4.  Invoice promptly.

I’m often amazed at how often I’ve seen my clients delay in sending out their invoices for services rendered or products delivered. That’s dangerous, especially in this economy.

Ideally, make it a practice to deliver your invoices along with your products or services. But if that is not practical, do it as soon as possible thereafter. Have  a set schedule / procedure to handle all your invoicing promptly.

The longer you wait to send out your invoices, the longer you’ll wait to be paid (and the less likely that you will get paid). Don’t let your client’s “forget” how valuable you are to them. Invoice often and promptly!

5.  Prioritize based on cash flow.

Keep your day everyday focused on doing the work that will bring you the most cash in the least amount of time. That means, if you have several internal administrative tasks that need to be handled, but also two large client projects that are nearing completion. Do the client work first! It takes some discipline, but the rewards are worth it.

The sooner billable work is completed, orders are fulfilled, or anything else that brings cash into your business is done, the sooner your cash flow will increase.

Learn to delegate the lower priority tasks, or do them at a less productive time. Use your best energy on cash-pulling projects. You won’t regret the results that show up in your bank account.

By implementing these five strategies over the last few weeks of this year, you’ll not only boost your cash flow in the short term but build a stronger and healthier business, setting you up for a stronger 2010.

Resource:

If you’d like to learn how to build a simple system to boost your business cash flow year round, then you will want to take a look at my special report, Cash Flow Kick-Start.

WANT TO USE THIS ARTICLE IN YOUR OWN BLOG OR E-ZINE? You have permission to re-publish it, as long as you include the following author’s bio and link:

Gabrielle Fontaine, PB is a freelance Professional Bookkeeper and Advanced Certified QuickBooks ProAdvisor who specializes in assisting Internet-savvy entrepreneurs to get control of their books and maximize profits. Get more information at http://www.BookkeepingDirect.com

Most entrepreneurs give little thought to the legal structure of their business, especially in the early days. But not knowing the risks of just “winging it” can come back to take a painful bite out of your bottom line. Even worse, it could put you at very real risk of losing more than your business, without warning.

Why your business structure is worth your attention

Usually the biggest reason to go into business is to turn a profit. And a lot of hard work is involved in building a profitable business, without a guarantee for success.

The difference between wasting your time and getting into big debt, or financial freedom and prosperity, has much to do with building on a solid foundation. Your choice of business structure is a key component when it comes to your business stability – now and for the long term.

What effect does choice of business entity have on your finances and business operations?

Fact is, your profits will be taxed based on your business structure. And, of course, navigating the applicable tax laws is no easy task. The government knows this, so most new businesses are, by default, the type of entity that generally pays the most in taxes – a sole proprietorship or partnership. Thank you Uncle Sam.

In reality, besides employees, taxes will often be your largest business expense, especially for service-based companies. So educating yourself about which business entity and it’s tax advantages are best for your situation can significantly affect how much of your profits you get to keep and how much you are forced to hand over to the government.

Your choice of business structure can also have a big impact on how you need to run your business. There are legal requirements that must be followed, depending on your choice of business entity. When these are ignored (and they often), serious consequences can raise their ugly head, some of which can put you out of business instantly.

Most often, business owners who pick some sort of corporate structure (with or without the advice of qualified professionals) don’t know what the requirements are, leave themselves without any liability protection. That’s a very scary, but extremely common scenario.

How can the risks be minimized sensibly?

The best way to avoid falling into these costly traps is education. Admittedly, understanding the different business entity choices (and there are many of them) is not an easy path to navigate for most of us. But who said starting and running a solid, profitable business was going to be simple? It doesn’t, however, need to be difficult. All it takes is some research to get the needed facts before making a smart choice.

How to make smart choices about business entity

Here’s my four-step action plan for getting the information you need to make a smart choice about the best business structure for your business sooner rather than later (or too late):

1. Know where your business is going. You should have at least a basic business plan laid out that describes what your ultimate goals are, how you’re going to get there, and include an exit strategy. Block out a full day or two on your calendar to either review or map out where you want your business to be in 3-5 years, and what it will look like when you’re “done” with it.

2. Educate yourself first about the different business structures available to you. This should be your own research via books, the Internet or any other means available for credible, unbiased information. Define your priorities (based on your business plan) and identify the basic advantages and disadvantages of each entity choice. Identify the business structure that appears to be best for your goals.

3. Engage a qualified professional. AFTER you’ve done your research, consult with either an attorney or accountant who specializes in small business and discuss your plans. Your objective is to start moving toward a definite decision based on what’s going to give you the best overall protection and tax savings (as well as other key considerations) for your unique business situation.

4. Make it happen. Lay out what needs to happen next to implement your plan to build or  maintain a solid foundation for your business success. Then put it on your calendar and do it!

Take-Action Resource

Straight Talk About Business Entities – multi-media training that investigates the different entity types, their tax advantages and disadvantages for making an informed choice based on your own unique business situation and priorities

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WANT TO USE THIS ARTICLE IN YOUR OWN BLOG OR E-ZINE? You have permission to re-publish it, as long as you include the author’s bio and link

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Gabrielle Fontaine, PB is a freelance Professional Bookkeeper and Advanced Certified QuickBooks ProAdvisor. She specializes in assisting Internet-savvy entrepreneurs get control of their books and maximize profits. Gabrielle also publishes the business-boosting online ezine, Smart Money Choices. Get more information at http://www.BookkeepingDirect.com

One of the best things about the shift in our economy, is it’s forcing us to do what we should be doing anyway – managing business more effectively.

The pinch just about everyone is feeling right now can actually serve us. That’s because it provides powerful motivation to trim the fat and maximize all our resources and opportunities. It’s do or die time.

So let’s choose the positive approach to this so-called “new economy,” and take a look at three areas of your business that may need a tune-up to get your bottom line moving in the right direction again.

1. Accurate Recordkeeping

Yes, I know. Recordkeeping is not sexy. But it is vital to maximizing your business’ potential for sustainable profits. Let’s face it. Without profits, you won’t have a business for long.

So, whether your business goals are lofty or humble, priority #1 must be to make money. Period.

To make money, you must be able to see where you are right now, profitable or not. You need the whole picture. Then, with accurate and up-to-date bookkeeping records you will have the ability to realistically and deliberately move forward to navigate this bumpy, unpaved economic road we’re on and reach your final destination successfully.

Accurate financial records help you answer questions like…

• Are you pulling in a profit each month?
• How do your numbers look compared to last year at this time?
• What’s changed?
• Which expenses are directly tied to sales?
• What’s selling most right now…and what’s not?
• What’s your asset to debt ratio? In which direction is that headed?
• Are new customers still coming in? How much are they buying?
• How much are your existing customers still buying?

Answers to these types of questions reveal important trends you can’t spot any other way. Weaknesses will emerge, as well as opportunities on the road ahead that can make or break you financially.  You’ll be able to see them and use them to your advantage, instead of being caught by surprise.

But the only way to see through your business binoculars is by putting a good recordkeeping system in place.

So how do you do it? You probably already know.

Get QuickBooks software and learn how to use it effectively. It’s a powerful program that will give you the insight you need.

2. Create Cash-Sustaining Systems

As with our physical bodies, fear and pain can serve as powerful motivators to get us into action. But they can also become recurring energy-draining aches that only subside momentarily if you react with temporary, short-term “pain killers” to get past the immediate discomfort.

You wouldn’t just take aspirin to treat a toothache and think it will fix the problem. So don’t do the same with your business.

Financial pain must be identified and eliminated at its source to grow a strong and healthy operation. Otherwise, the problem, and the pain, are only going to get worse and more serious. Cash-sustaining systems must be put in place to prevent and cure those pain-causing areas in your business.

The cure? A shift from short-sighted, rollercoaster cash management habits, to long-term business growth systems that provide cash flow stability and health.

How to do it? Use what you’ve learned from your financial reports in Key #1. Maximize what’s working in your business to pull in more sales, and remove what’s dragging you down. This includes implementing both cash-generating strategies and cash-savings tactics.

Once you’ve laid out an action plan, put it to work immediately by scheduling it on your calendar and stick to it for at least six months. Keep track of your results. Documenting what you’re doing and measuring your progress is one of the best ways to build custom-made systems that turn your business into a consistently productive and profitable machine.

3. Reduce your tax burden

There’s no getting around it. Taxes are a significant obligation we all must bear. But it has been conservatively estimated that small business owners and self-employed taxpayers are unnecessarily overpaying by more than 160 BILLION dollars each year. Wow!

Can you really afford to be paying more in taxes than you need to right now? Consider this eye-opening bit of information I stumbled upon the other day…

In a recent report conducted for the Small Business Administration, it was found that tax debt for small businesses is a significant factor in bankruptcy.

“…more than half of individual small business owners [in bankruptcy] reported owing some tax debts. Individual small business owners in bankruptcy proceedings who are encumbered with high tax debts are generally in a precarious financial condition and are worse off financially.”

Why are so many small business owners in such a precarious financial condition?

At least one big reason is they only pay attention to their taxes as a “once-a-year” annoyance, usually sometime around April 15th. I see this all the time. Sound familiar?

If you’re only paying attention to your taxes during tax season, then guess what? You’re probably paying too much tax.

So what can you do about it? You need to do tax planning BEFORE the end of the year (that means NOW), while you can still take advantage of whatever tax breaks may be available to you. Yes, this may mean you need to spend some time doing a bit of research, or at least making an appointment with your tax professional. But this is some of the smartest time and money you can invest for your business longevity.

A significant possible tax-reduction strategies to consider seriously is your choice of business entity, also known as your legal structure. That is, whether your business is a sole proprietorship, partnership, corporation or LLC. Your business structure can have a HUGE impact on the way your income is taxed.

So pick up the phone an make an appointment with your tax professional, or set aside a few hours this week to research the tax breaks that are available to you. One obvious place to start is at the IRS website.

Okay, so I’ve thrown a lot of information at you in this article. And quite honestly, you probably can’t put it all to work for your business immediately. So pick just one of the three keys above and run with it.

The vital message is – make the “new economy” pinch work for you by getting into action now to streamline your business. You’ll emerge a stronger entrepreneur well on your way to manifesting your vision for your business and your life as a result.

Take-Action Resources

Recordkeeping

QuickBooks software – It’s #1 for small business for good reason

QuickBooks Basics: New User Essentials – an economical video crash course for learning how to use QuickBooks software effectively by yours truly

Quicken Home & Business – If you don’t want to learn QuickBooks and you’re already familiar with Quicken, this may be your best bet in the short term for your business recordkeeping

Cash-Building Systems

Cash Flow Kick-Start – My no-nonsense special report that gives you a quick, effective way to get your cashflow moving without breaking the bank

Instant Cash Flow – highly recommended book for building a solid cash flow system in your business, one step at a time.

Tax Reduction

Straight Talk About Business Entities – multi-media training that investigates the different entity types, their tax advantages and disadvantages so you can make an informed choice based on your own unique business situation and priorities

My Corporation – online resources for those who know what they want and want to do it themselves

The Tax Reduction Toolkit – information for small business owners on how to save the most possible in taxes, legally.