Learning Accounting: Debit And Credit Basics

By: Peter Lenkefi

When learning accounting for the first time, the terms ‘debit’ and ‘credit’ can be a bit confusing. Why? Because when you go to the bank and deposit money, the teller will tell you, “I am crediting your account X amount of dollars,” but if you are taking money our of your account, the teller will tell you, “I am debiting your account X amount of dollars.” Also, with debit machines all over the place, and credit cards in everyone’s pocket, the two accounting terms take on a whole new meaning.

However, what we’ve learned about these two words so important in the accounting world, debit and credit, have to be unlearned quickly. Why? Because in accounting, the term debit is used to describe a bank account and that money owed are actually credit accounts – the exact opposite of what we’ve been taught elsewhere.

In accounting terms, neither credits nor debits are ‘bad’, but they need to equal each other in order to balance themselves out in the end. Every itemized transaction, no matter if it’s a deposit or a bill to be paid has both a debit and credit posted in the accounting world. This is what is called ‘double-entry accounting’ – so when you go to the bank, and the teller says, “I am crediting your account X amount of dollars,” she is also debiting an entry of a similar amount without telling you this. The same goes for when the teller tells you, “I am debiting your account X amount of dollars,” – the accounting will show that a credit of the same amount is being made elsewhere at the same time.

The easiest way to figure out debits and credits in accounting terms is to figure out the following: what did you receive, and where did it come from. The debit is what you received, and the credit is where you received it from, in accounting terms. So for demonstration sake, let’s say you bought a CD with your credit card. The CD is what you got, so it will be a debit in the accounting world, and the credit will be applied to the liability you carry on your credit card for the exact same amount.

The bank can easily confuse people learning about credits and debits in the accounting sense of the words, especially when discussing liability. For instance, when you put money in the bank, the bank’s liability to you increases, and since liabilities are credits, they are crediting your account (in accounting terms). And when the bank lowers their liability to us (by us taking money out of the bank) the banks are debiting the liability account, from an accounting perspective.

Basically it comes down to being able to figure out what you got and where exactly it came from; if you can figure these out for every transaction, then you’ve got the accounting terms of credit and debit down pat.

       

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7 Things To Consider Before Buying Small Business Accounting Software

By: William Siebler

The world of small business accounting software can be a minefield for any business owner. However, choosing the right package is one of the most critical business decisions you will make.

Here are the seven things you must consider before making a purchase that will help you achieve your businesses goals.

1. Scalability

Businesses change over time so it's critical that the small business accounting software you choose can change too. Some things that often change are the number of products and services offered and the number of employees. When you choose your package try and imaging the business in 5 years or 10 years time and how different it will be. Use this information to guide your purchase decision. It may well be better to pay a little more now for the software knowing that it can be easily upgraded when needed with minimum disruption and cost to your business.

2. Support

It is important that any software has great support for when something goes wrong (and it always does). Most major companies offer support but you also need to think about support in your local area. It's often much easier to have someone locally come in and do things you need done with your software than have someone trying to help you over the phone. Make some enquiries with other businesses about the package they use and who helps them.

3. Accountant Interface

It's most unlikely you will handle every aspect of your businesses accounting. Your accountant is an important factor in making the right decision. What software are they used to working with and what do they prefer? Can you easily supply them data and reports from your package without the need for any extra work (which you'll have to pay for). Don't be afraid to ask their opinion as they live and breathe this stuff.

4. Best Value For Money

Once you have selected the right package for your business you may as well get the best value. Shop around as the price can vary greatly and the product is exactly the same. Online merchants such as Amazon may offer better pricing because of the sheer volume of products they sell. However, price is only one part of the equation so if their is great merchant locally with support or installation assistance this may be far more valuable.

5. Major Brands

There are two major players in the small business accounting software market. They are QuickBooks and Peachtree. Microsoft is expected to enter the market soon. I recommend choosing a major brand so that you can get regular updates and you know the company will be around as long as your business needs them.

6. Ease of Use

Ease of use is a personal thing but it is worth trying the software before you buy it if you can. Remember to get the person who will be the main user to test the software as well. Also consider how well the package can interact with other software you use. This is an advantage the Microsoft package may have when it's available.

7. Features Needed

I touched on this earlier when talking about thinking ahead as to where you business will be in 5 or 10 years time. Most accounting software packages come in several different versions. If you don't need certain features now and can't see a need for them in the future then don't buy them. The major differences are usually - number of users allowed, inventory management capability and number of reports available.

To sum up think ahead when planning your purchase of small business accounting software. You will make a much smarter business decision that will save you plenty of trouble and money in the future

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Accounting Methods - Cash And Accrual

By: Richard Chapo

When starting a business, you have to determine the method you are going to use for accounting and paying taxes. The two choices are the cash method and the accrual method.

Cash Method

If you are looking for simplicity, the cash method is probably your best accounting choice. Generally, income and deductions can be claimed when payment is actually received or made. This is best shown with an example.

I open a small business and have to order business cards and stationary. I receive the products and pay the invoice on November 18, 2005. Under the cash method, I can deduct the cost on my 2005 tax return.

Some businesses are restricted from using the cash method. C corporations may only use the cash method if they have less than $5 million in gross revenues for a particular year. Professional Service Corporations can use the cash method without limit, while farming corporations can due so if gross revenues are less than $25 million. Tax shelters are prohibited from using the cash method.

Accrual Method

The Accrual Method of accounting is a bit more complex. Under this method, the focus in on the date the expense is incurred, not paid. Although this may seem a small difference, it can play havoc with your books and piece of mind.

Using our previous example, assume I order business cards and stationary on the December 18, 2005. I receive the products on December 30th, but don’t pay the invoice until January 20, 2006. When can the expense be claimed? It depends on when economic performance occurred.

Generally, economic performance occurs when goods or services are provided to you. In the above example, economic performance would arguably occur when the business cards and stationary were delivered with the invoice on December 30th. Thus, I would be able to deduct the expense for the 2005 tax year.

In Closing

As you can see, the cash method is the easier of the two accounting methods. To determine the best method for your business, speak with a tax professional.

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Accounting And Billing Procedures For Small Business

By: Lance Winslow

No matter how small your small business is, it is essential to have some sort of accounting and billing police and methodology. This will prevent you from making mistakes and upsetting vendors or even bouncing checks. Most sole proprietor and single employee companies do not have a plan of attack for accounting and billing procedures until there is a crisis. There is no sense in allowing a crisis to take hold, especially when a few procedures are set in place to prevent it. Remember Noah built the Ark before the rain.

Below you will see a simplistic outline to help you and guide you along as you develop your own accounting and billing policies to insure you are paid on time and pay your bills when they are due. Now then, my business will be slightly different than your business so you may wish to slightly modify this outline to fit your own unique business. I recommend that you print this article and then modify it to specifically help you in your business. Once you have re-written and/or modified your outline then start listing items and make a few paragraphs describing how you will be handling such things. Once this is complete you will be well on your way to having a complete and first class manual for accounting and billing. Continued success and may your business grow to its full potential and take full advantage of your new procedures.

ACCOUNTING AND BILLING

I. CHECK BOOKS

II. JOURNALS

III. CREDIT CARD STATEMENTS

IV. ACCOUNTS RECEIVABLE

V. BILLING

A. Discounts For Prompt Payment

B. Terms Of Contract

C. Unit Numbers And Days

VI. EMPLOYEE WITHHOLDING

A. Book Keeping Services

VII. BOOK KEEPING SERVICES

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2 Basic Methods Of Accounting

When you're working in accounting, there are two basic methods. You have your cash basis and accrual basis. Whichever methods you choose will depends on your type of business. Cash basis is the simpler method. It is mainly use by service businesses that do not maintain inventory or startup businesses that do not offer credit. The accrual method is used by businesses that provide for credit sales or maintain an inventory.

In cash basis accounting, your record sales when cash is received and expenses when they are actually paid. Using the cash basis method is like maintaining a checkbook. Under this method, account receivable are not recorded as sales until they are collected. Account payable are not recorded as expenses until the account is paid.

Bad dept, accruals and deferrals are not appropriately recorded under cash basis because they are examples of outstanding credit or business notes. The cash basis method is not appropriate for businesses that extend credit.

In accrual basis accounting, you report income and expenses as they are earned or incurred rather than when they are collected or paid. Record credit sales as accounts receivable that have not yet been collected. The accrual basis also provides a method for recording expenditures paid in a single installment but covering more than one period. For example, interest may be paid semi-annually or annually, but it is recorded on a monthly basis.

The accrual method satisfies the matching concept, i.e., matching income with related expenditures. Consequently, it can provide a clear and accurate view of business operations for a given period.

Sales Manager Coaching

By : Adam Mussa

Sales management training with coaching is the ideal program to foster new creativity in your company. A sales manager coaching reps can have great success stories to relate to the team; furthermore, sales manager coaching is fabulous for introducing fresh ideas to team members. Sales management training with coaching can also be a way to spark new team work and communication among staff. Sales manager coaching will assure the very best company leaders. With a sales manager coaching reps, valuable information can be shared, much of which will work to increase your company's revenues and profits.
Sales management training with coaching can be utilized within your company in several different manners.
However the transition from that of a sales team member or even a manager to that of a sales manager coaching reps can be a difficult transition for some if you do not take the right steps.
A program such as this will generate conversation among team members who may have never had opportunities to work together.
A sales manager coaching reps should further be able to relate war stories for his reps. This will encourage teambuilding, communication, and can even demonstrate sales techniques that can work for others.
Sales management training with coaching will also provide managers with the ability to determine the sales skills of others on the staff, and to help them make any necessary improvements.
Sales management training with coaching can further be a useful tool for soliciting feedback from your staff. They may become at ease with informing you of any problems in the field with a sales manager coaching reps at the helm.
A sales manager coaching reps will do wonderful things for your company. Implementing a policy that supports sales management training with coaching is quite beneficial. Overall, you can find many benefits for your business with sales manager coaching in place.

Sales Process

By : Adam Mussa

The theory of sales process improvement focuses on several aspects, all of which will make your company a bigger success. The fundamentals of the sales process involve much of which revolves around both customer and company satisfaction; therefore it can be a premium to invest in some sales process consulting to make a stronger work environment. Sales process improvement is beneficial for any company, and it is highly recommended by many to stress the importance of the sales process to your sales team staff.
The sales process can be dealt with in various manners. The key is to develop strategies which work to meet the individual needs of your clients.
One of the best tools for sales process improvement is to really focus on those with whom you wish to work, and who conversely choose to work with you. Stop wasting time on others who are not going to be won over by your products.
Have your advertising and public relations appeal to a wide audience. Yes, focus upon your target; however, do not limit the demographics of that audience. Make your marketing appealing to all.
Tweak your communication and presentation skills so that these never fail you. Have ready information about your company at all times. Remain current about product knowledge, and be able to communicate clearly with your clients and prospects.
Sales process consulting will further encourage your business to train and hire only the best in your field. Let your company develop a reputation as the best by putting your well-educated staff in the field. Business will certainly follow.
Finally, really utilize the strategies stressed in sales process improvement. Put the methods into practice and you are sure to see increases in revenues.
The sales process is tough. Businesses are forever devising new ways for sales process improvement. With just the right sales process improvement, however, you are sure to head straight to the top.

Sales Structure

Selling EMS: strategies continue to evolve; Your sales structure should align with your business model.(Focus on Business): An article from: Circuits Assembly

By : Adam Mussa

Developing a useful sales plan for your company can be quite a useful tool. Sales planning will not only help you manage the growth of your company, but it can also show where you can take your company in the future. Sales' planning is difficult, what with all of your goals and objectives to specify. But with the right sales plan, you will certainly see marked improvement within your business.

Sales plans, when done right, can be a valuable tool for any company, large and small, established and new. Sales' planning helps everyone to get on the same page and encourages enthusiasm throughout the company.

One of the best starting points for a sales plan which will work is to state clearly what your business is about. Know your reputation, and certainly, identify clearly what it is that you have to offer. This can be goods or services.

Next, determine your target audience. A good sales plan calls for you to know exactly to whom you wish to sell, and to make good on this objective.

You must be ready to introduce your products to the market at a specified time, and always, you should form a strategy to make all of this happen.

Finally, a good sales plan encourages the development of strategy and tactics. Let your strategy dictate why and how your company will work. Your tactics should then be the ways that you intend to make all of this happen.

Sales planning will help you devise a strong strategic plan; that is, state clearly how and why your sales plan and business will work. Furthermore, you will formulate tactics, or ways to achieve these goals.

Create a well-oiled machine with effective sales planning for your company. Team members will work hard to meet and exceed the expectations presented in the company sales plan, which will serve all positively in the well-traveled path toward success.

Training In Negotiating

By : Adam Mussa

Providing sales negotiation training to your company can be beneficial for your staff. Sales negotiation training in the United Kingdom can be found via multiple venues. Seminars and simulations are both examples of the sales training in the UK which can be located. Sales negotiation training is a crucial element for making your company a success. Find the right sales negotiation training in the UK for your company and you are certain to develop a winner.

Sales negotiation training is beneficial in many facets of your business. It can help you understand the process of being a wise negotiator as well as learn new techniques of sweetening the deal to meet the demands of all.

Work effectively with a client, gain his trust, and show how you can benefit his business. This trick is taught in multiple sessions regarding sales negotiation training in the UK.

Furthermore, sales negotiations in the United Kingdom will depend upon creating a strategy for your business which leads to your desired outcome.

Sales negotiation training in the UK will encourage that you take the negotiation process as an opportunity to learn more about client needs.

Listen without prejudice to his needs and concerns and develop a deal which will address these. In addition to this, caring for this customer will help you better prepare for future sales negotiations with others.

Sales negotiations in the United Kingdom also call for you to approach all negotiations in a positive manner. Separate your personal feelings from those involved with business, and always be prepared to turn a negative into a positive.

Sales negations in the United Kingdom, as anywhere, can be daunting. However with the right sales negotiation training in the UK, and sales negotiation training elsewhere, you are sure to devise a winner every time.

4 Step Dynamic Sales Letters

By: Allyn Cutts

You, like all marketers have a million and one things to do today! At the top of your priorities is marketing... finding more customers and raking in greater profits. If you're looking for a simple, proven model to create sales content without spending hours hunched over the computer, try the AIDA (Attention, Interest, Desire, Action) model. You'll be amazed at how fast you can create an effective salesletter.

1. Attention

What captures a reader's attention more than an exciting list of things that will benefit THEM? Think about the affects of starting right off with 6 of the most appealing benefits of your product or service.

A Multi Level Marketer might start a sales letter like this:

Experience the freedom of ...

Being your own boss

Financial independence

Benefit 3 and so on ...

That gets their attention, and compels them to read on.

2. Interest

Here's where we sneak in the basic facts that might otherwise be uninteresting. The nitty gritty details of the product features won't hold the customer's attention for long, so keep it short and sweet. Hey, it's great that your swimming pools have filters, etc., but let's face it... there's not a lot of excitement going on here!

3. Desire

Whet their appetite, but give them some cold, hard logic to back up their purchase. Most consumers buy on impulse, then ask themselve whether it was the right choice. Don't make them second guess! Preparing them to face the doubts with a solid logical reason they got the best deal for their buck might include:

The advantages of purchasing from YOU.

Testimonials from other satisfied customers.

An unconditional money-back guarantee.

A good deal!

4. Action

Order now! Hey it says move it, but it doesn't pack the wallop of a stronger action statement like this one:

Hurry! Don't miss out on this LIMITED TIME special offer. Call now to place an order, or visit us at www.....

Be sure to give details of how to order. Make it a part of the command... make it easy to do... provide several options.

The 7 Step Challenge - Does Your Marketing Company Measure Up?

By: Peter Lawless

All companies are set up with one key goal in mind - to make money. Owners and investors put money into a company based on a business idea and plan. However, without continued and profitable sales they will fail.

It is essential that business owners realize how crucial it is to plan their sales and marketing effectively. This means understanding why people buy their products, who buys them, what problems purchasing those products solve, and what solving those problems enables the purchaser to do. Finally understanding how customers will put a value on the ownership of the product, as well as understanding the cost of not buying them.

In line with this, it is also very important to know the decision making process and also who their competitors are. This will impact the sales and marketing strategy, as well as pricing.

If you are not an experienced Sales or Marketing Manager, or indeed do not have the time to do everything yourself, you should look to investing in some services to compliment your own skill set. Below are some criteria, you should consider, before deciding on someone to help you generate additional business;

Experience -

Do they have relevant experience in my type of business - Do they have satisfied customers?

Understanding -

Do they understand what my issues and problems are - More importantly, do they understand my target market's issues?

Methodology -

Do they follow and implement proven processes - Will they work for my business?

Measurement -

Do they track all results - Can I see exactly what I am getting for my money?

Shared Risk -

Do they work on a flat or fixed Fee - Or is their remuneration part based on my actual sales?

Credibility -

Do they sound believable - Am I prepared to trust the future of my business with this firm?

Integrity -

How honest are they with me - Are my customer contacts, plans and aspirations safe?

And finally

Passion -

Do they have a passion to succeed in their own business, which will reflect on what they do for my Business?

Any engagement with an outside firm should be based on partnership. You need to share common values, and beliefs. While all businesses should operate to make a profit, there also needs to be a guiding principle of care and customer service.

Fishing for Leads - The 5 Steps

By: Peter Lawless

The first thing that I noticed when I got onto the small boat at the harbor in Ennis crone, Co. Sligo, was the cleanliness and order of the boat. The skipper in charge had all of the rods, upright, with their lines neatly tucked away, in holders. The holders were made out of piping, about 30cm long, which had been welded to the side of the boat.

A simple, inexpensive aid had made me sit up and pay attention. This skipper thought about his customers, and this device left a strong impression. We then got a very short lecture on safety, checked we had our life jackets on, and off we went. About 12 of us!

Finding your target market

About 12 minutes later, the skipper stopped the boat, and told us we should find some mackerel here. He explained that the lures on the hooks looked just like what mackerel wanted to eat. It certainly was not something I would have fancied!

He explained that through his experience and the help of a little sonar gadget on his boat, that he knew there was a shoal of fish below. We all slung our rods over the side and dropped our lines.

Reeling in the sale

Now I don't know about you, but this was totally new to me. I wound up the line frantically, as soon as I felt a tug, and hey presto, there were three fish dangling off the hooks. I started flailing about, one jumped off before I even got it in over the side, and when I was trying to reel it in the final bit I lost an other one. The one that I got in, I lost down the gutter when I finally got it off the hook.

The skipper explained to me, that once a fish took the bait, I should give a quick tug on the rod, to make sure it was firmly hooked. I should then take my time, to reel it in. Secure the rod in the holder, with the fish hanging over the bucket and deal with them one by one - I did, and I ended up with 20 fish, which delighted me, as I had set a target of 10, since my friend had caught 9 on his first time

So what are the lessons for marketing - if you are still with me, and have not already got most of them, here they are in business speak;

1. Set goals and targets that are realistic, and based on some valid foundation or research.

2. Have simple procedures set up, to make it easy to operate and for your customers to conduct business with you.

3. Speak in your prospects language, about what they want - it's a bit like the fish bait, unlikely that strawberries and cream will catch many mackerel!

4. Once you know what your prospects like, find out where they are, do some research and target them accordingly - as in our example, not much point in putting down shark bait in a shoal of mackerel.

5. Once you get your customers attention, or have a lead, qualify it, and ensure you follow up at all time to close the sale. Again the use of a good sales process is essential here.

The bottom line, if you know what problems or desires your customers have, and you can solve or fulfill these, while providing value for money, you will always be a winner.

And if you don't know the answer to that question, go ask the people who have already bought from you - they do!

The Top 5 Features of CRM (Customer Relationship Management) Software

The importance of the customer has been emphasized time and again, making it important for any business to know the top 5 features of Customer Relationship Management (CRM) software. In today's mature economy, it is the relationship with the customer that matters most to the success of a business. And CRM software combines the power for information technology with marketing to improve and maintain business-customer relationship; so as to have maximum customer retention. In general, CRM software provides the following:

1) Sales Force Automation: This involves automating the processes and work that typically is the job of the sales people. The feature enables automating account management, contact management, opportunity management, and sales analysis. This includes both collecting customer data including date, time, value, and item at every point of interaction. This data is used to predict customer behaviour also acts as input for effective campaigns and is vital for business software.

2) Marketing: These features involve designing and implementing marketing campaign which involves promotion of their products through various channels such as email, internet, telemarketing, social media sites etc. The features include campaign management, lead management, email with trackable links, integration with pay per click sites or search engine etc. The analysis of campaign results and effectiveness is also included.

3) Groupware Integration: The feature offers integration with other systems such as Microsoft exchange, blackberry, and outlook. Considering the popularity of smartphones and importance of social media networking sites, and their use in the mobile phones, this is a great advantage. You also have to be sure when you buy CRM software that it provides integration with all your software and hardware as well as any third party software you may have.

4) Customer Service: You have a much better chance of customer retention if you service your customer better. If they do not have to wait for your service and have problems afterwards. The features in the CRM software enable you to do that. They help with raising the ticket, routing, escalation, customer surveys, and self service portal. The processes being automated, there are lesser chances of glitches and needless waiting on the customer's part.

5) Information Analysis: The features provide report writing and advanced report writing functions. Regular reports are of course necessary for effective campaigning, since you need to know if the campaign is really working and if the customer is responding as needs be. You should also know about customer complaints, and how effectively they are solved etc. All this contributes to better customer relationships.

Customer Relationship Management became necessary when businesses understood that they could no longer ply the market with products of their own choosing with no care for the customer. The role and reduction in cost of customer retention over customer acquisition was understood and thus CRM became important.

CRM software, along with your strategic work force gives you detailed data about your customers making it easy for your team to understand the customer's individual needs and preferences thus making it possible for you to know when a customer is likely to purchase your product and how much they might buy. This also provides you information to revise and improve your products so as to make it better suited to your customers.

Also, this data allows you to do cross selling or up-selling. Like when someone purchases a car, you can also sell them a better car stereo; or encouraging the customer to buy a more expensive and higher category product.

These advantages make these among the top features of CRM software.

Marketing analytics software-Used it in the growth of your business

There are large numbers of marketing analytics software today that are specialized in number of industries.

Google Analytics is the king of marketing analytics software which is ready to install, easy to use and it is a widely used online software package. Google allows a website creator to easily track the site statistics. There are good numbers of software available now days in the market but the most common is the Marketing analytics software that helps people to understand complex information in easier and simpler way.

If you are not sure what a Marketing calendar software is, then here's a brief explanation. It is simply a calendar that keeps track of your marketing methods and helps you measure your return on investment. Marketing information is the best source for marketing. Writing is an art one that brings joy to its creator. The biggest advantage to a Marketing calendar software is that it makes you think and focus harder as well as makes the planning easier. First you write down the exact results you want or expect. If you value solid relationships with your prospects and customers then you should having all the marketing information in a secure, reliable database system. There are a great many companies offering Brand Asset Management Services so competition is keen. Even if our company is the best you still have to compete with others who offer lower prices and might appear to be cheaper.

Another recent advancement in advertising software email advertising is the talking email. Voice or music can be added to the email file by which the advertiser can talk to the receiver. Create a Marketing calendar software. Spend some time mapping out what you want to do over the next month or so. For those tasks you need to do weekly assign a day of the week and how much time you want to spend on it. Links is the best and most convenient feature of the internet. Events are not as much as easy to organize without marketing information. We are having different event production software available today which work on the event planning.

Marketing information is the best source for marketing. Writing is an art one that brings joy to its creator. There are a certain things to get the words on paper and lastly have it printed on a book. Create a Marketing calendar software. Spend some time mapping out what you want to do over the next month or so. With the advancements in getting marketing information. It is now much easier for website owners to add an interactive Marketing calendar software on their website.