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Business Builders: Book Report -“Accounting for the Numberphobic”

By January 19, 2016January 20th, 2016No Comments

Part of running a business is being able to do everything at first – sales, marketing, office management, and bookkeeping. Now, eventually you want to outsource at least partially some things, and not be a one man or woman show – or you will stagnate and become overwhelmed.  But it is imperative that you understand how to do basic bookkeeping and understand revenue, profit, and other key concepts about managing the finances of a business.

Reading Accounting for the Numberphobic by Dawn Fotopulos is the one book to read in order to do this. It moves quickly, it’s engaging, and explains things simply so anyone can understand. Most importantly, it relates how many financial concepts affect your business, and how to evaluate the services or products you sell – so you can adjust the pricing, discard, or re-engineer said services to boost your profit.

Key takeaways you’ll find inside:

  1.  Why booking all your leads is a bad sign
  2. Why a higher-priced service may NOT be a moneymaker for you
  3. How to read your balance sheet
  4. Invoicing. You must invoice your clients a few days before their payment is due; or you will have significant cash flow issues.  Fotopulos explains some other excellent advice for invoicing properly.

Another tip I’ll throw into the mix – hire a great bookkeeper to polish your Profit and Loss report at the end of the year and process your 1099s; and then use Quickbooks.com or other online bookkeeping software that syncs with your bank account for nearly brainless reconciliation of your books on a daily, weekly, or monthly basis.  This system allows you to have that professional oversight so you don’t screw up fatally, but avoids the cost of a full on bookkeeper which can be hard to afford the first few years of a business.

And, read this book!  It will ease any fears or confusion on accounting, and strengthen your business.