One might be resulted in believe that profit is the main objective in a small business but in reality it’s the income flowing in and out of a business which will keep the doors open. The idea of profit is somewhat narrow and only talks about expenses and income at a certain point in time. Cashflow, on the other hand, is more dynamic in the sense that it’s concerned with the movement of profit and out of a small business. It is concerned with the time at which the movement of the money takes place. Profits do not necessarily coincide with their associated income inflows and outflows. The net result is that funds receipts often lag cash repayments and while profits may be reported, the business enterprise may experience a short-term income shortage. For this reason, it is essential to forecast cash flows in addition to project likely revenue. In these terms, you should understand how to convert your accrual earnings to your cash flow profit. You need to be able to maintain enough cash on hand to run the business, however, not so much concerning forfeit possible earnings from some other uses.

Why accounting is needed

Help you to function better as a business owner

Make timely decisions
Know when to employ a team of employees
Discover how to price your products
Learn how to label your expense items
Allows you to determine whether to extend or not
Supports operations projected costs
Stop Fraud and Theft
Control the largest problem is internal theft
Reconcile your books and inventory control of equipment
Raising Capital (enable you to explain financials to stakeholders)
Loans
Investors
What are the GUIDELINES in Accounting for Small Businesses to handle 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 assess the overall value of my business
Can you help me grow my enterprise with profit planning techniques
How can you help me to prepare 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 inescapable fact. But turning a profit is easier said than done. In order to boost your bottom line, you should know what’s going on financially at all times. You also have to be committed to tracking and understanding your KPIs.
Do you know the common Profitability Metrics to Track in 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: Remarkable accounts payable (A/P) shows the total amount of cash you right now owe to your suppliers.
Average Cash Burn: Average income burn is the rate of which your business’ cash balance is certainly going down on average every month over a specified time frame. A negative burn is a superb sign because it indicates your business is generating money and growing its funds reserves.
Cash Runaway: If your organization is operating at a loss, cash runway can help you estimate how many months it is possible to continue before your organization exhausts its cash reserves. Much like your cash burn, a negative runway is a wonderful sign that your business keeps 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 connected with creating and selling your business’ products. This can be a helpful metric to recognize how your revenue compares to your costs, allowing you to make changes accordingly.
Customer Acquisition Cost: By focusing on how much you spend typically to get a new customer, it is possible to tell exactly how many customers you should generate a profit.
Customer Lifetime Value: You must know your LTV so that you could predict your future revenues and estimate the full total number of customers you should grow your profits.
Break-Even Point:Just how much do I have to generate in revenue for my company to make a profit?Knowing this number will highlight what you need to do to turn a profit (e.g., acquire more buyers, increase rates, or lower operating expenses).
Net 物流 : It is the single most important number you should know for your business to be a financial success. If you aren’t making a profit, your company isn’t going to survive for long.
Total revenues comparison with last year/last month. By monitoring and comparing your complete revenues over time, you can make sound business selections and set better financial goals.
Average revenue per employee. It is important to know this number to help you set realistic productivity ambitions and recognize ways to streamline your business operations.
The next checklist lays out a suggested timeline to take care of the accounting functions that will preserve you attuned to the functions of your business and streamline your taxes preparation. The accuracy and timeliness of the quantities entered will affect the key performance indicators that drive business decisions that need to be made, on a daily, monthly and annual base towards profits.
Daily Accounting Tasks

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

2. Record Transactions

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

3. Document and File Receipts

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

Start a vendors file, sorted alphabetically, (Sears under “S”, CVS under “C,”and so on.) for easy access. Develop a payroll data file sorted by payroll date and a bank statement data file sorted by month. A common habit would be to toss all paper receipts into a box and make an effort to decipher them at tax time, but if you don’t have a small level of transactions, it’s better to have separate files for assorted receipts kept organized as they come in. Many accounting software systems let you scan paper receipts and steer clear of physical files altogether

4. Review Unpaid Charges from Vendors

Every business must have an “unpaid vendors” folder. Keep an archive of each of one’s vendors which includes billing dates, amounts credited and payment due date. If vendors make discounts available for early payment, you might like to take advantage of that should you have the cash available.

5. Pay Vendors, Sign Checks

Track your accounts payable and also have funds earmarked to pay your suppliers on time in order 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 better. Whether you make payments on-line or drop a sign in the mail, keep copies of invoices delivered and received using accounting software.