Financial Essentials All Businesses Need
Posted by Checkbook on Jul 05, 2022
For all of you listening to the daily grind of stock market collapse there is good news: The entrepreneur spirit is alive and well and it will once again propel us to higher value creation than ever before. It is now easier, more than ever, to develop a product or tech and launch it to the masses. According to NPR, in 2021, 5.4 million business applications were submitted. While some of these applications were partly due to many people losing their job due to COVID, overall, small businesses, defined as having fewer than 500 employees, accounted for 32 million businesses in 2021 (according to Small Business Association).
What is a Business Application?
According to the Small Business Association, “most small businesses need a combination of licenses and permits from both federal and state agencies”. Federal licenses are only required if the business activities are regulated by the federal government (e.g. agriculture and/or commercial fisheries). All business license fees (federal or state) will vary depending on business activities and location. And the applicant will determine the type of businesses - Sole Proprietorships, Partnerships, Corporations, S Corporations, Limited Liability or Company (LLC). Even with the proper licenses and approvals, there is no guarantee or specific way to determine any particular company's future size or success rate. Follow these next steps and take advantage of these financial essentials to increase the chances of success.
Businesses that have obtained the proper licenses and permits will have to decide next steps; consider asking these questions:
- Should I hire staff?
- Are there any apps I need to learn or implement?
- Should I get office space?
- Are there investors who might be interested in my business?
- How will I keep track of my revenue and expenses?
A company's finances will usually determine the answers to the above questions. Properly tracking a company's finances will dictate the trajectory and longevity of said business.
Financial Essentials for Every Business
Tracking - Every business should know where the money is coming and going. We suggest opening a business account (business checking or credit card). Link these accounts to helpful apps that will automatically record your expenses (e.g. mileage, meetings, travel, rent)
Reporting - For investors and stakeholders to make informed decisions, businesses need to provide reporting. These reports (most commonly reported yearly) include the audited financial statements: balance sheet, income statement, and statement of cash flows.
Analytics - Many helpful tools will forecast and enable financial experts at the company to properly take risks, save and/or know when to get money (e.g., loans or investor contributions). Some of the most highly rated business intelligence tools will provide insights for growth, resolve urgent issues, and have predictive models to forecast future outcomes.
Accounts Payable - Paying vendors on time will eliminate late fees and save the company money in the future. Additionally, research shows that paying employees on time will keep retention rates high. For payments of any kind, we suggest using a payment platform that can send payments, instantly, ACH, printed checks, and virtual cards, and has the capability to track all payments/expenses and include team members for approval.
Checkbook Integrates With Sage Intacct
Sage Intacct pushes payment information for transactions logged within the system to Checkbook.io and then pulls payment status in real time from Checkbook.io to update and reconcile that on its system.
How To Maintain The Security Of Your Bank Account
All money now is virtual and all of it is stored in the hands of our fiduciary partners, banks. Maintaining the security of your bank account is imperative now.
Checkbook lets you email anyone a Digital Check and deposit it free
"If you’re sick of running out of paper checks and stamps or hassling with routing numbers to send zero-fee payments, you can bank on Checkbook.", says Josh Constine of TechCrunch