financial data
policy and control are the key ingredients of any successful business. policy establish what your business will do. control measures the accomplishment of policy goals. the heart of the operation is in the accounting system. before you start your business, it is essential to give you adequate accounting records. if you can't afford this, you are simply too undercapitalized to be in business. if you don't have enough managment experience to be starting a business this is a common problem area for many small business. control is essential. if you don't control your business it will control you. the overriding policy of your business is to find out what your markets want, to satisfy those wants, and to make a profit while doing so. the implementation of your policy depends on planning arid using your plan as a means of controlling your business. The first step toward managing your business for profits is to establish a bookkeeping system that provides you with the raw data {or the five control documents (balance sheet, break-even analyst. income statement, cash flow analysis, and deviation ; analysis) that will be developed in this section. Your bookkeeping system should be simple enough for you or an employee to keep up to date on a daily basis with provisions made for weekly, monthly, quarterly and yearly summaries. The system must contain cash controls (a checkbook and a cash register tape are part of your bookkeeping system). Beyond this, your method of bookkeeping should be suited to your specific needs. Since your bookkeeping system is the basis of your business information (control) system, and since only you know what kind of information you will require beyond the demands of this section, no attempt is made in this handbook to set up a system for you. i i There are three resources for setting up your bookkeeping system : 1. You or an in-house bookkeeper, 2.business service firms 3, Accountants. Each has advantages and drawbacks. You should decidc which suits your needs best. The do-it-yourself stems are lowest in cost but require more time and alien provide less information than professional business service firms and accountants provide. However. business service firms and accountants cost considerably more. Your best bet is to check out all three before making your decision. Keep in mind that business service firms and accountants act as outside staff (management consultants) for your business as pan; of their services. This extra service alone often justifies their higher costs. The Kind of insights a good accountant (whether with a business service firm or a CPA firm) can bring include analysis and interpretation of your financial statements, wide experience with many other small. businesses, lmowledge about people and markets, advice or choosing and using upfto-date computer power, and other general managerial tools. They also provide tax advice-which should be the least of your worries. (Sometimes a good tax accountant can actually nake you more money in tax sayings than he or she costs in fees). The two control documents
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