One of the most important elements to financing a business is having the proper infrastructure. Generally speaking, many entrepreneurs fail to understand that lenders are looking for good systems and reporting. If you do not have an environment that provides financial information at your fingertips, you may stand to lose out in any opportunity to fund your business properly.
What do I mean by ‘proper infrastructure’? Every business should have a proper set of books and records which enable the business to run efficiently and effectively. A proper set of books is not recording sales on your shirtsleeve or a note pad, paying all business expenses by cash, or reporting your profit by email.
Be savvy and ensure your business is set up with accounting software which is user friendly. It should primarily allow the owner to record all sales invoices and all deposits received against those sales invoices, record all bills and payments against those bills and most importantly provide the owners and those requesting information with accurate and timely Financial Statements.
The benefit of utilizing reputable and widely known accounting software is that there are so many other benefits such the ability to track all unpaid sales invoices in a sub-ledger, all unpaid payables in a sub-ledger, tracking all employee pay cheques in a sub-ledger and manage your cash flow through automated reconciliations of your bank accounts. Most accounting software systems are user friendly, integrated and real time as they enable those seeking accurate information to make decisions faster.
For more information on how to build a proper infra-structure speak to your accountant. Proper books of record will help you take advantage of financing opportunities if and when the need arises.
Lino A. Fera,CGA.,B.Comm.,B.A.