is for... Accounting!
David Peterson - 2006
believe the process of keeping track of your business
accounting is one of the reasons why businesses in
fail at such a high rate. Let's face it... Accounting is very
confusing. Accounting has Debits, Credits, Invoices, Purchase
Orders, Timesheets, Reports, Taxes, Payroll, etc. The list
seems endless and it is just flat out easier to avoid the
whole subject than getting down to work and figuring out
exactly what are your business finances.
I understand, I have been there, accounting is confusing. It's
scary. It's a down right pain in the you know what. Do
you know what is scarier than accounting? It is having your
business fail! You will fail if you do not have a good handle
on your business finances.
In my first job out of college I was a Retail Store Manager at
a large paint company. I learned the cycle of bad business
finance management from the new contractorís point of view.
The cycle consisted of landing the big job, getting the first
draw and then going out and buying a new truck for the
business or a new car for the family. The next step in the
cycle would be the painting contractor running up their store
credit for their painting supplies. Finally when the large job
was over they would run and hide as we tried to collect the
money for the painting supplies they purchased from the store
for that particular job.
was always the same bad business financial cycle, especially
from the ambitious painting contractors that wanted to
"grow" their businesses. They would get the large
contract, go buy something big, spend all their money, then
default and disappear. I specifically remember one contractor
showing me his brand new truck and telling me to wait until
tomorrow because it will be covered in paint - he did not
disappoint me, it was trashed.
Are new painting contractors bad painters, or bad leaders, or
bad humanitarians? Of course they are not. They are just like
every other start up business. Start up businesses regardless
if they are a home-based business or a new law firm see a
little money coming in and assume that:
There will always be more revenue then expenses.
There aren't too many expenses that a new business will
incur. They will just do without those items.
should put this line in bold... Not only can you not count on
the revenue coming in but you will have expenses! The trick is
to know how much revenue is coming in, how much people owe
you, when that money is due, and finally how much you owe to
first glance it sounds pretty simple. You make $100 and you
spent $80 on supplies so you earned $20. Business is not that
simple. Business isnít that simple even if you are running a
Multi Level Marketing company. Luckily there is software that
can help you with your business accounting. However my
suggestion is that you go take a two or three day class at
your local trade school on how to run the software.
As an example Peachtree Software comes in a variety of flavors
and it works like a charm but if you don't know the difference
between an invoice and a sales order then your business is
already in trouble. I hear a lot of people say "... just
give it to my accountant and they do it for me..." Well
that is one option but I would say that the accountant is just
one more of those expenses that you probably didn't count on
when you started your business.
is an interesting expense that happened to me when I started
business; in one year I went from an $80 accounting software
package that was perfect for my business when I bought it to a
$300 package with another $60 month payroll solutions. By my
third year my accounting fees in my business approached
$5,000! I have sense gotten that number way down.
"A" is for accounting. You will have to learn
the basics of accounting as well as learning how to become
intimately familiar with your accounting software if you plan
on beginning successful. You can do it you just have to take
the time to learn it.
Been There - Done That
Peterson's Search Engine Optimization Guide
send all correspondence to: firstname.lastname@example.org