Personal Finance guide

Dr. Duncan gets in his office and checks his email for a status update from his bookkeeper Kathy. An email from Kathy has an attached statement generated using QuickBooks which includes invoices waiting for Dr. Duncan’s approval and hours to be billed to his clients for services. Dr. Duncan contacts Kathy over instant messenger and tells her to (a) pay the invoices, and (b) send bills for services clients. Kathy immediately acknowledges and goes on to pay off invoices using Dr. Duncan’s online Bill Pay system. She then emails and faxes bills for services provided to clients.

Who exactly is Kathy and where is she located? Kathy is a virtual assistant – virtual bookkeeper to be specific – working from India for Maxim Liberty, Inc. which provides online bookkeeping services for various clients in the USA. As Ms. Prabhukumar, President of Maxim Liberty, Inc. remarked, “We are our client’s best kept secret. Every firm has tasks that can be handled via virtual assistants. And, if these tasks can be done better than on-site bookkeepers at a fraction of the cost, the explosive growth of our bookkeeping services shouldn’t be surprise. Since our virtual assistants work with various businesses and specialize on a specific process or task such as bookkeeping or word processing, they can draw upon best practices of operating a small business.”

Online virtual assistant and bookkeeping services are an outsourcing strategy that can be used to gain competitive advantage. As a result, they have shot to prominence and firms of various sizes are utilizing them. The recession has made businesses more prudent about how they spend their operating budgets making virtual assistants a hot commodity.

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Online bookkeeping services and virtual assistants are an outsourcing strategy that can be used to gain competitive advantage. As a result, they have shot to prominence and firms of various sizes are utilizing them. The most recent recession has made businesses more prudent about how they spend their operating budgets making virtual assistants a hot commodity.

How exactly does using an online bookkeeping service help crush the competition? Paying as low as $5 per hour for online bookkeeping services vs. the typical $30,000 for an in-house bookkeeper yields tremendous cost savings for a small business. A small business owner can use the money saved to (a) beat the competition with lower prices for products and services, (b) invest in additional advertising to outgrow the competition, and (c) prepare better strategic plans.

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Keeping good financial records has its payoff. In fact, it’s one of the key steps in building a good, and more importantly, successful business. Accurate bookkeeping makes it possible for a business owner to determine the exact financial condition of his company. More significantly, accurate bookkeeping from a small business is often the first step into the realm of top competitors in the ever changing market place.

Large and medium-sized companies have the resources to form an internal accounting department to do the books, which gives management enough time to do the more important parts of business management like formulating marketing strategies and creating new networks. But for small businesses who have limited budget and number of staff members, monthly bookkeeping just seems like such a daunting task, especially if you add it to the list of other duties to keep everything running.
Fortunately, small business bookkeeping doesn’t have to be so grueling anymore. Monthly bookkeeping services are now available online and are quite affordable. This cheap yet effective means of bookkeeping provides the same efficiency and accuracy a private accounting firm gives its clients. Online bookkeeping is a practical way for small businesses to get to where they want to be, when they want to. It’s like professional bookkeeping made to-go!

Online bookkeeping is exactly like doing the books on paper except it’s done faster. It gives the small business owner the same standard set of bookkeeping reports a big company would get from an accounting firm. A basic bookkeeping report, when done correctly, should be able to answer these questions:
1. How much income are you generating every month, and how much will you be expecting in the future?

2. How much cash is under your list of receivables and when will they turn to actual cash?
3. Which of your product lines or services are bringing in the most amount of profit, breaking even, and/or draining your resources?
4. How do the data compare with last year or the last quarter?
5. How do the data compare with projections?
6. How do all these information compare with the competition? Are you leading or falling behind?

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Too often business owners make common mistakes that cost time, money, effectiveness, and profitability. Identifying the five most common management mistakes can help you increase your company’s productivity.

1. FOCUS ON YOUR CORE BUSINESS

The single best way to better manage any firm is to focus on the business at hand and on your customers. You are skilled at what you do; that is why you started your business. Typically, as the company grows and the client base increases, owners and managers try to wear too many hats. They become accountant. Network administrator. Office manager. Think back to that first job, the one that inspired you to go out on your own. All your focus was on the client, on your specialized product or service. That inspiration and success is why your business grew. To maximize your potential now, every customer should be treated that way. You cannot do this unless you focus solely on your specialty and leave the accounting, network administration, and office work to other trained professionals.

2. DELEGATE

Delegating non essential jobs will allow you to better manage your time, make you more effective, and increase your profits. You must delegate some responsibilities so that your time can be dedicated to your own area of expertise. The best way to do this is to work with people who are extremely competent at what they do, just as you are at your profession. In many cases it is best to go outside your company to manage details such as payroll, accounting, and bookkeeping. Outsourcing this will save you money.

3. DOWNSIZE AND CUT COSTS

Cutting payroll saves both time and money and also increases your profitability. Frequently, business owners hire full-time office and accounting staff when they really need someone only 10 or 15 hours a week. Why not just outsource this work? You pay for only what you need, when you need it. Downsizing in this way saves money on costly overhead, while it also makes you more effective and your business more profitable. You save valuable time because you do not need to find busy work, train, or supervise staff. Think of how much more time you can devote to your clients!

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Have you ever seen a business running without an accounting system? I bet there is none otherwise the business is doomed to fail. Every business from small home based venture to major corporations has accounting needs because it is the barometer of every business. It tells you whether your business is gaining substantial profits or losing revenues. Such important function in the business must not be taken for granted.

Unfortunately, not all business owners have the skill and expertise to carry out accounting functions in their own companies. Also, the resources to fulfill these functions are very limited in small to mid-scale businesses unlike in multibillion corporations. Oftentimes the owners run the business operation while trying to meet its accounting needs. It is not quite a smart choice because you fail to solely focus on the critical needs of the company, an essential step to sustain your business. More so, not all businessmen are good accountants.

This is the reason that outsourcing your accounting needs is highly recommended. The advent of outsourcing the accounting services such as bookkeeping to third party surges in the recent years because of the unbeatable benefits it offers to you and your company.

Outsourcing your accounting needs allows you to save up to 40% from your payroll and employee related expenses. In a typical business structure you require the basics such as desk, office chair, stationery supplies and computer for your staff. Also, onsite employees entail a portion of your expenditure to be allocated for employee benefits such as health insurance, social security system and so on.

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