The new year means that NYC accounting firms would be helping out small and medium enterprises (SME’s) kickstart their fiscal operations right. If their clients previously had bad accounting methods or misaligned business strategies, now is the time to begin anew.
2014 is expected to bring some drastic changes into the world of accounting; with technology and management leading the forefront of these transformations. Aside from accountants themselves pursuing higher education to serve their clients better, businesses themselves should also seek to enhance their performance.
Here are some helpful tips for SME’s to begin their fiscal year on the right foot:
Problem: Trouble saving for quarterly tax payments.
Depending on the nature of the venture, most businesses need to make quarterly estimated tax payments. Some owners find it hard to acquire the needed amount before deadlines; so they resort to loans or by withdrawing from personal finances. Often, this could be due to lack of organization or proper bookkeeping methods.
CPA’s from major accounting firms suggest making them monthly payments instead. Just like utility bills, it is generally easier to meet these payments because money for them is set aside for in advance.
Problem: No or low company growth.
This is most likely caused by entrepreneurs with no end in mind. It’s rare to find a business that only seeks to operate in its current situation. Many would want their ventures to move forward; to improve and perhaps expand into other locations or product lines. SME’s who show no signs of progress need to be re-evaluated about their objectives as well as future endeavors.
Create a three- to five-year business plan. If owners are not looking into how their companies are going to be like within that given time frame, it would be pretty useless to continue their enterprise. For one, businesses should be an ever-growing entity. Two, today’s commercial environment is highly competitive that having no future goals can be detrimental.
Problem: Inability to make quick or sound financial judgments.
It’s often the case that SME owners are too busy with other affairs they sometimes overlook the financial aspects of their company. When they do get to speak with their accountants, it’s either only during tax season or when a problem arises. If they ever see their bank statements or balance sheets, they are sometimes bewildered about its contents.
CPA’s should encourage frequent financial performance reviews, particularly for important fiscal documents like sales, expenses, and inventory. This helps owners keep track of where their money is going. In effect, this allows them to make good decisions on issues and other monetary concerns regarding their business. Advise them to look back at those statements in order to measure efficiency and productivity.
Knowledge Is Key to Success
Knowledge is indeed power. If accountants and entrepreneurs work hand in hand, they can definitely learn more from each other while generating creative ideas for company improvement. Small business owners should also start embracing technology and its advantages. It won’t be too long before the thin line between accounting, science, and commerce is blurred – by studying the trends and creating careful plans, SME’s can be a step ahead of the crowd.