Most solopreneurs dread doing their bookkeeping. Some give every piece of paper to an accountant at tax time. Some don't open their bank statement when it arrives every month or cringe as they look at the balance. Let's face it. If we had wanted to become an accountant, we would have, We didn't. But you can find more reasons to keep up with your monetary record-keeping than holding creditors at bay.

Monetary reports are excellent advertising tools. Money flow keeps your "doors open" but how do you get that money to the door. Here's how to have a marketing mindset about your accounting.

1. Accounts Receivable Collection This really is some thing really few sole practitioners want to deal with. Try this: Discuss your payment terms correct up front. Much better yet, get a deposit or full payment prior to you start. If you have to turn out to be a bill collector, turn this into a sales opportunity. Ask if the product or service has worked for them. Have an "add-on" that you simply present at this time. Introduce a new product that you have just begun to sell. Get off the phone with your payment and a new order.

2. Inventory Control If you sell products, be sure they are correctly valued on your books. This really is especially critical to artists and artisans. You purchase supplies to produce your pieces and charge the supplies as expenses. You add your time to turn them into finished goods. Set a value on the final creation. Know what you've in your inventory. Check in at least bi-monthly. See what's selling and what's not. Have a sale or featured item promotion to move old inventory.

Produce special promotions to feature the items that market well - so that you simply can sell a lot a lot more! If your books are set up with an inventory figure in them, it will remind you that you have money sitting right there in front of you (or in the basement)

3. Profit Centers Most people have more than a single product or service. Should you haven't then you ought to. If you're just starting out, then you're probably trying several things to see which one brings earnings fastest. Once your income becomes steady, you are able to focus on some from the others. Experienced business owners have three or four different streams of income they have developed. Do you know which item brings you one of the most profit from the least effort? There is a very easy way to find this out- every month - even if you're not an accountant.

Have your books set up on something like QuickBooks which can then have a separate category (class) or profit centre for every product and service. * Whenever you do your bank deposit, set the name of this category beside each item on a deposit. * Do the same when you write a cheque. Record where the money went. This really is isn't always straight forward but make an estimate. The resulting Profit and Loss report will show a separate column for every category- its own income and expenses. And you'll know where to spend your time and sales and advertising efforts at a glance.

4. Customer Revenue History There are three methods to increase your sales: get a lot more customers, get your clients to buy more frequently. You don't have to do this through an accounting system while your client list is short, but it’s the most essential aspect from the financial management of your business after cash flow. If you wish to build your company easily, then you are able to begin today.

Draw a chart by answering the following questions.

How many clients do you've? How much did they every buy from you in the last 12 months? (total dollars)? Don't worry concerning the pennies. Approximate figures will work. What products or services did they buy? How numerous times did they buy from you? How many new clients did you have within the last 12 months? Do you see any surprises? Do 20% of your customers account for the 80% of your company? Be aware of the risks if a single or two of them account for 80% of your sales.

Take this info and set it with what you've learned about the most profitable areas of your business and you are able to evaluate your existing marketing activities or look for new ones in very specific areas. For example, If you've been performing yellow page ads and only a very few new customers came from there, compared with the ad you placed within the newspaper, you are able to make an informed decision. Try this with your chart. Calculate the average sale for every client (total sales divided by total number of clients) What would it take to obtain each of them to purchase 10% a lot more within the next year. How simple would it be to get them to do this? Simple, correct?

Numbers do not need to be intimidating. And they certainly aren't just for accountants. With a various approach and attitude, you can love reading those financial statements because you know how to obtain them to become a sales tool.