Eight Tune-up Tips for your Business
 Summertime isn't all R&R for small business owners. While monitoring your daily account balances can be a quick way to judge your financial health, periodically you need to take a closer look at other aspects of business management. QuickBooks, the IRS, and the Small Business Administration each offer several tools to help tune up your business. Use these 8 tips to help gauge your midyear performance and make adjustments that may lessen any risks and boost your chance of success in 2004.
Collect on overdue accounts.
Many small business owners experience cash-flow problems because they have difficulty collecting the money due from their customers in a timely manner.
The first step in staying ahead in collections is to maintain an accurate record of your overdue accounts. Several different reports in QuickBooks can help you monitor and manage your receivables, including the A/R Aging Summary and A/R Aging Detail reports.
As a midyear to-do item, run the QuickBooks Collections Report. This report shows you which customers are overdue and how much they owe. Since it also includes contact names and their phone numbers, you can call and remind customers that payments are overdue and set up payment schedules that work for you and your customers.
Compare your profit and loss for 2004 to last year.
If you've been in business for several years, running year-to-date comparisons between selected years can be useful indicators of your performance, revenue, and spending habits.
Run the Profit & Loss Previous Year Comparison report in QuickBooks to compare income and expenses for this year to last year. You can customize the report to include previous years, too. In this report, QuickBooks automatically calculates the percent change as well as the dollar amount difference for each line item. This report can help you find out exactly where your income — or spending — may be over for the year and where you may need to cut back.
Perform a full backup of your critical business information.
Don't put your business information at risk. Every business owner should back up valuable data weekly or even daily, including information that changes often such as QuickBooks data, your address book, e-mail folders, calendar, browser bookmarks, and any other ongoing projects. You should also back up all other files — those that you change less frequently — at least twice a year.
If you back up on disks or CDs, consider sending your backup media to another location or keeping it in a fireproof safe or bank safe deposit box, particularly if the data is critical to your business. Using an extra hard drive isn't the best place to store your backup files. If your system fails, then your extra drive will likely fail. It's best to create backups off your system and, if possible, store
them offsite.
 Read this QuickTip to learn how to backup your Company data to CDs.
Find out about QuickBooks Online Backup Service.
Change your passwords to minimize the risk of fraud or intrusion.
Information thieves and computer hackers tend to be opportunists. If you have strong defenses, they'll move on. One way to help avoid intrusion is to frequently — at least twice a year — change your QuickBooks password to protect your data.
When changing a password, try to use password "best practices" such as the following:
- Include a combination of upper and lower case letters.
- Include a combination of letters and numbers.
- Make the password at least six characters long.
- Do not allow blank passwords.
- Do not use obvious passwords, such as the user's name or the word "password."
To make it difficult for intruders to hack into your business information system, consider using a firewall. A firewall is a mechanism — software or hardware, such as a router — that protects the company network from untrusted or suspicious traffic while allowing the flow of authorized traffic. Microsoft Windows XP operating system comes equipped with firewall software that cable and DSL users can turn on.
Since hackers are constantly finding new ways to enter networks, you should download and install up-to-date network security and operating system updates and patches when they are released. And every PC in your company should run up-to-date anti-virus software. According to an Ipsos-Reid survey, 36 percent of U.S. Internet users have been hit by a computer virus, so do all you can to avoid attacks.
Grow your retirement accounts now.
Don't wait until April 15th to make your retirement account investments for this tax year. Waiting until the deadline may cause an extreme burden to your cash flow in April, especially if you owe a significant amount in taxes.
If you haven't opened a retirement account for your business, consider starting one. Even minimal contributions each year can yield respectable tax savings and help boost your retirement nest egg.
Your accountant and investment advisor can help you determine the right type of account by evaluating your business profitability and your employee base. Small businesses typically choose SEP IRA, Simple IRA, and/or 401(k) plans. With SEP IRAs, the plans are funded by employer contributions, and the business contributes the same percentage for you and any eligible employees. Simple IRAs and 401 (k) plans are usually funded by employee deferrals and employer contributions. These plans allow employees to defer part of their salary to their retirement plans on a tax-advantaged basis. Find out more by visiting QuickBooks Retirement Solutions.
To help you make an informed retirement fund decision for your business, take this short survey. Based on your responses, you'll be directed to more detailed information on retirement packages that meet your needs.
Don't do it all yourself.
Even the most knowledgeable business owners need help with finances. And summertime can be the best time to get advice from a local Certified QuickBooks ProAdvisor, as accountants are typically less busy in the summer than during tax season.
You can choose from thousands of Certified QuickBooks ProAdvisors — CPAs, enrolled agents, accountants, bookkeepers, small business advisors, trainers, or computer consultants who have been tested on QuickBooks. A ProAdvisor can help you with any number of financial management tasks and can help answer your QuickBooks and accounting questions. Some ProAdvisors also offer one-on-one training on QuickBooks and can teach you timesaving tips and tricks.
Search the Pro Advisor database.
Use the free tax resources at the IRS.
The IRS offers a multitude of resources and educational tools to help you maximize your tax savings during the year. Use these resources to determine if you need to make any midyear tax adjustments.
Get organized.
Last but not least, the U.S. Small Business Administration, in its Managing Your Business guide, recommends that you take time at the end of each day to organize your work and make reminder lists of tasks for the next day or week.
To help you stay organized each day and remember to perform certain tasks throughout the year, use QuickBooks to track your To Do's. Remind yourself of tasks you want to complete by a certain date. You can look at your notes in the To Do list at any time, or you can use the Reminders list to see the notes with upcoming due dates.
- From the Company menu, choose To Do List.
- From the To Do menu button, choose New.
Enter the text of the note as you want it to appear on the To Do list.
Tip. If you have a lot of detail to put into the note but you want the entry in the To Do list to be short, enter a short title, press Enter, and then enter the rest of the note. Only the title will appear on the To Do list.
In the "Remind me on" field, enter the date you want the note to appear on your Reminders list. For example, if you enter August 15, the note will not appear on the list until August 15.
- Click OK.
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