As published in ConnectIT News

By: Barb Anderson, Groups Sales and Marketing Manager Intuit Small Business

If there was a single word that small business owners would use to sum up 2009, it would likely be "challenging." The recession proved to be an overwhelming experience for many but, while headlines spelled doom and gloom, the flicker of entrepreneurialism was unmistakable.

Economic predictions peg 2010 as a year of growth and small businesses will play a key role but success is not automatic. One of the leading causes of bankruptcy among small businesses is poor financial know-how so, while the entrepreneurial spark burns brightly, it needs to be matched by accounting savvy.

Fortunately, there are ways small businesses owners can strike this important balance. Managing back-end processes like accounts receivable, payroll and invoicing doesn't have to be intimidating. As 2001 fast approaches, the following tips may prove useful in helping small business newcomers and veterans alike get a jumpstart on the coming year.

Track finances

Like a wallet, it's crucial for small business owners to know how much is going into and coming out of their business. Experts often point out that one of the most common ways small businesses get into financial trouble has to do with improper accounting processes and consistency. Forgetting crucial costs or, even worse, failing to invoice a customer can set off a domino effect that takes up time that would otherwise go toward more important matters. Buttoning down accounting procedures and sticking with a strict schedule will ensure the business coffers remain at appropriate levels and bills get paid on time. Affordable accounting software takes much of the guess work out of day-to-day operations and allows owners to concentrate on more pressing issues.

Reduce overhead costs

Careful management of overhead costs should be a top priority for all small businesses. Small business owners should periodically take a step back from daily operations and assess costs, such as rent, maintenance fees and even insurance. If a better deal can be found without negatively affecting operations, take advantage of it. In reducing expenses, however, small business owners need to ensure they only tackle non-essential items and safeguard investments crucial for the present and future needs of their businesses.

Manage relationships

A healthy business relationship can also be lucrative one. Regularly talk to banks, suppliers and customers to make sure everyone is happy and where necessary, make changes. Things like interest rates, payment schedules and contract terms can be adjusted if small business owners take the time to look them over. Extending a payment term can keep a client happy and feeling appreciated while discussing interest rates with banks can bring more money back to the business.

Reduce bills

Now is the time to shop around and determine if there are ways to save on such expenses as utility bills. The same applies to bank and even credit charges. If customer service or performance at a bank is below expectations, it might be time to arrange meetings with other institutions. If switching utility providers means a smaller bill, the money saved can go toward more critical needs.

What's the forecast?

Any small business owner who's tried borrowing money will know that banks often want to know where funds will come from to cover the cost of the loan. This hasn't gotten any easier over the past year as most financial institutions have tightened their lending. Cash flow forecasting may sound like a daunting task but accounting software features make it relatively easy. Once a small business owner can show what money is coming in and out, it becomes easier to work with a bank to unlock capital, transform the bottom line and safeguard a company's future.