Archive for the ‘Small Business Accounting’ Category

The Pros and Cons of Different Approaches to Funding

January 25th, 2012 webkriti

There are many different sources of funding for companies. We look at the pros and cons of the various funding options available to businesses.

 

Venture capital

 

Venture capital is typically used by companies when they need an alternative to public markets and banks. Venture capitalists provide cash investment in return for company shares, which then gives them an active participation in running the company they have invested in.

 

In addition to finance, venture capital investors often have consultants who can provide specific expertise in the market and offer additional services such as mentoring, alliances and facilitate exits and trade sales. Venture capitalists may also provide other resources such as legal, payroll and tax help.

 

Company owners who use venture capital as a source of funding have to be prepared to not only sell a stake in their company but also to hand over a degree of control and responsibility for decision making. Venture capitalists may also agree to invest x amount of money but only release the money to the company when certain targets set out in the company’s business plan have been reached.

 

One of the biggest concerns for entrepreneurs who wish to take on venture capital is that decision making is not entirely theirs alone to make any longer.

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Credit Cards: Using them the Smart Way for Your Small Business

May 11th, 2011 webkriti

Even if you have a business that doesn’t rely on your personal credit to function, opening and using business credit cards can be a little intimidating.  After all, you may have learned some hard lessons in the past where your personal credit was concerned (a situation that no doubt took some time to clear up – we’ve all been there) and you certainly don’t want to make the same mistakes with your company’s line of credit.  But there are actually several benefits to using a business credit card (not the least of which is keeping your personal credit separate) as long as you go about it in the right way.  Here are just a few ways to get smart when it comes to using credit cards for your small enterprise.

1.       Hold all the cards.  If you want to know exactly what is being purchased with your cards, you have to keep track of them yourself.  In general, it’s just better not to give them out to employees.  However, this may not always be feasible (especially if you’re purchasing goods and services online from vendors that you don’t hold accounts with).  You’re going to be dealing with things that are a lot more important than ordering more paper for the copy machine.  So if you have to turn the responsibility over, simply give a card to a trusted manager (and set a limit on usage), and then monitor activity frequently via online banking.

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Deducting Car Expenses for Your Business

April 28th, 2011 webkriti

There are many possible deductions that can ease the burden on your small business when the tax man comes to collect his due.  You can deduct the cost of your office space (whether it’s in your home or you hold a lease); the cost of paying employees, contractors, or sub-contractors; the cost of research and development; and of course, related business expenses such as entertaining clients and so on (you can even write off gifts to clients as part of the cost of doing business).  But one area that many small-business owners overlook is the expense of an automobile.  That is probably because this type of deduction can be negligible if you don’t have a dedicated work vehicle, which many small businesses mistakenly believe they cannot afford.  But if you are self-employed or own a small business and you use a vehicle for work, even if it is just your personal vehicle, you can find ways to deduct at least a portion of the expense for mileage and maintenance.  Here are a few good ways to use your vehicle as a business deduction.

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