One might be resulted in believe that profit is the main objective in a business but in reality it is the dollars flowing in and out of a business which will keep the doors open. The concept of profit is somewhat narrow and only talks about expenses and income at a particular point in time. Cashflow, however, is more dynamic in the sense that it is worried about the movement of profit and out of a small business. It is concerned with enough time at which the movement of the amount of money takes place . Profits do not necessarily coincide with their associated income inflows and outflows. The net result is that funds receipts often lag cash obligations and while profits may be reported, the business enterprise may experience a short-term income shortage. For this reason, it is vital to forecast cash flows and project likely gains. In these terms, it is very important learn how to convert your accrual earnings to your money flow profit. You should be in a position to maintain enough cash on hand to run the business, but not so much as to forfeit possible earnings from other uses.

Why accounting is needed

Help you to operate better as a business owner

Make timely decisions
Know when to hire a team of employees
Discover how to price your products
Understand how to label your expense items
Helps you to determine whether to increase or not
Helps with operations projected costs
Stop Fraud and Theft
Control the largest problem is internal theft
Reconcile your books and inventory control of equipment
Raising Capital (assist you to explain financials to stakeholders)
Loans
Investors
What are the Best Practices in Accounting for Small Businesses to address your common ‘pain points’?
Hire or consult with CPA or accountant
What is the best way and how often to get hold of
What experience do you have in my industry?
Identify what is my break-even point?
Can the accountant assess the overall value of my business
Can you help me grow my company with profit planning techniques
How will you help me to get ready for tax season
What are some special factors for my particular industry?

To succeed, your company must be profitable. All of your business objectives boil down to this one simple fact. But turning a profit is simpler said than done. So that you can boost your bottom line, you have to know what’s going on financially always. You also have to be committed to tracking and understanding your KPIs.
Do you know the common Profitability Metrics to Track in Business — key performance indicators (KPI)

Whether you decide to hire an expert or do it yourself, there are some metrics that you should absolutely need to keep track of at all times:

Outstanding Accounts Payable: Remarkable accounts payable (A/P) shows the total amount of cash you currently owe to your suppliers.
Average Cash Burn: Average income burn is the rate of which your business’ cash balance is certainly going down on average every month over a specified time period. A negative burn is a superb sign because it indicates your business is generating income and growing its cash reserves.
Cash Runaway: If your organization is operating at a loss, cash runway can help you estimate how many months it is possible to continue before your organization exhausts its cash reserves. Much like your cash burn, a negative runway is a wonderful sign that your business keeps growing its cash reserves.
Gross Margin: Gross margin is really a percentage that demonstrates the total revenue of your business after subtracting the expenses connected with creating and selling your enterprise’ products. It is just a helpful metric to identify how your revenue comes even close to your costs, enabling you to make changes accordingly.
Customer Acquisition Cost: By focusing on how much you spend typically to acquire a new customer, you can tell how many customers you have to generate a profit.
Customer Lifetime Value: You should know your LTV so as to predict your own future revenues and estimate the total number of customers you need to grow your profits.
Break-Even Point:How much do I need to generate in sales for my company to create a profit?Knowing this number will show you what you must do to turn a revenue (e.g., acquire more customers, increase prices, or lower operating expenses).
Net Profit: This can be a single most important number you must know for your business to be a financial success. In the event that you aren’t making a profit, your organization isn’t likely to survive for long.
Total revenues comparison with previous year/last month. By monitoring and comparing your entire revenues over time, you can make sound business judgements and set better financial ambitions.
Average revenue per employee. It’s important to know this number so that you could set realistic productivity objectives and recognize ways to streamline your business operations.
The following checklist lays out a recommended timeline to take care of the accounting functions that may continue to keep you attuned to the operations of your business and streamline your tax preparation. The reliability and timeliness of the figures entered will affect the key performance indicators that drive business decisions that need to be made, on a daily, monthly and annual foundation towards profits.
Daily Accounting Tasks

Review your daily Cashflow position so you don’t ‘grow broke’.
Since cash may be the fuel for your business, you won’t ever desire to be running near empty. Start your entire day by checking how much cash you have on hand.
Weekly Accounting Tasks

2. Record Transactions

Record each transaction (billing customers, receiving cash from consumers, paying vendors, etc.) in the proper account daily or weekly, depending on volume. Although recording dealings manually or in Excel linens is acceptable, it is probably easier to use accounting program like QuickBooks. The benefits and control far outweigh the cost.

3. Document and File Receipts

Keep copies of all invoices sent, all funds receipts (cash, check and charge card deposits) and all cash repayments (cash, check, charge card statements, etc.).

Start a vendors record, sorted alphabetically, (Sears under “S”, CVS under “C,”and so forth.) for easy access. Create a payroll data file sorted by payroll time and a bank statement data file sorted by month. A standard habit is to toss all paper receipts into a box and make an effort to decipher them at tax time, but if you don’t have a small level of transactions, it’s easier to have separate documents for assorted receipts kept organized as they can be found in. Many accounting software systems enable you to scan paper receipts and avoid physical files altogether

4. Review Unpaid Expenses from Vendors

Every business should have an “unpaid vendors” folder. Keep a record of each of one’s vendors which includes billing dates, amounts due and payment deadline. If vendors make discounts available for early payment, you might like to take advantage of that if you have the cash available.

5. Pay Vendors, Sign Checks

Track your accounts payable and also have funds earmarked to cover your suppliers on time in order to avoid any late fees and keep maintaining favorable relationships with them. When you are able to extend due dates to net 60 or net 90, the better. Whether you make payments online or drop a sign in the mail, keep copies of invoices delivered and received using accounting software program.