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How Does Business Culture Affect Business Success?

A flourishing company is built on its strong corporate or business culture. An organization’s values, beliefs, and practices as a whole define it and have an impact on how its members interact with one another and with their objectives.

With that said, let’s discuss how much corporate culture affects corporate success. Let’s also cover how toxic environments can sabotage even the biggest and most profitable companies.

Business Success Requires a Non-Toxic Business Culture

Engagement, contentment, and retention of employees are all facilitated by a strong corporate culture. In other words, continued success and achievement requires a healthy business culture.

  • Worker Morale: While a bad corporate culture may lead to low morale and high turnover rates, a good one may increase employee engagement and retention. The success and growth of any organization are ultimately determined by its culture because worker efficiency and enthusiasm are directly affected.
  • Workers are the Backbone of the Company: You should find ways to satisfy your workers along with your customers because displeasing one over the other usually results in something in your company to give in. Either one or both could leave your company.
  • Happy Workers Equal Happy Customers: A healthy work environment could lead to more revenue, happier customers, and a stronger bottom line. Motivated and engaged staff members are more likely to deliver a superior customer experience, which could boost client loyalty and sales
  • The Most Successful Companies Have Quality Work Culture: There are numerous instances of prosperous companies with robust cultures. One important aspect of Google’s reputation is its corporate culture. Low employee turnover rates indicate their strong corporate culture.
  • Google’s “Googliness”: This refers to Google’s basic values of creativity, teamwork, and a dedication to having a positive impact on the world, as well as perks like complimentary meals, on-site fitness centers, and generous vacation policies, is another aspect of Google’s culture.
  • How Success Is Linked To Its Culture: Corporate culture is important because a happy and productive workplace is essential to a business’s success. Focusing on fostering an environment that encourages innovation, collaboration, and development can have a significant positive impact on a company’s bottom line.
  • Work Environment Culture Development: The process of developing a fantastic culture never ends because the company and its employees are always evolving. It’s critical to devote time and resources to creating the culture and ensuring that the team understands and upholds it.

To Sum It All Up

Employee happiness and productivity are directly impacted by company culture. Employee morale may be positively impacted by a courteous and appreciative work environment, leading to more engaged and productive workers.

Additionally, a healthy corporate culture improves the company’s reputation with stakeholders and customers, which fosters business success. Treat your workers right and they’ll see employment for your company through thick and thin.

The Difference Between Accrual Basis And Cash Basis In Accounting

In financial accounting, you must know the mechanisms for recording and reporting transactions. For that, accrual basis and cash basis accounting are the two main methods used worldwide. While both are used to record financial activity, they differ significantly. Here’s an in-depth comparison of these two accounting methods.

The Fundamentals of Cash Basis Accounting

Cash basis accounting follows a straightforward approach. Income is recorded when received, and expenses are recorded when paid. This method offers simplicity and clarity, especially for small businesses or startups.

Key Features of Cash Basis Accounting

Given its direct approach to recording cash transactions, it is quite simple to understand and apply. Second, since the revenue and expenses reflect the cash inflows and outflows, this clearly shows a company’s cash situation at any given time.

Lastly, despite its simplicity, cash-based accounting may not provide an entirely accurate picture of a company’s financial health. That’s because it fails to account for credit transactions or financial commitments not yet paid or received.

The Intricacies of Accrual Basis Accounting

On the other hand, accrual basis accounting is more holistic for recognizing revenues when earned and expenses when incurred. This is true regardless of when cash is exchanged. This method offers a better understanding of a company’s financial status.

Key Features of Accrual Basis Accounting

First, recognizing revenue and expenses in real-time gives a more accurate portrayal of a company’s financial standing. For that matter, it also considers future inflows and outflows of cash, which help in better management of financial performance. 

A more accurate financial picture comes at a cost of complexity; companies need meticulous records to track revenue and expenses accurately as they are earned or incurred, not just when the cash changes hands.

Cash Basis Vs. Accrual Basis: Which to Choose?

Choosing between the two depends on some factors:

  • Size of the Business – For small businesses with mostly cash transactions, cash-based accounting can be more practical and less complex. On the other hand, companies with bigger credit transactions or inventory might find the accrual one more ideal for accurate financial reporting.
  • Legal Requirements – In some areas, companies that have a certain size or type are required to use the accrual one to ensure more accurate financial reporting.
  • Need for Financial Management and Analysis – Lastly, if financial management or analysis is highly required, then the accrual method may be more helpful. The cash basis may not show the full financial picture. This is true especially if large credit sales or purchases are always involved.

The Many Responsibilities Of A Company’s Accountant

Accountants take on the responsibility of proper safekeeping and financial documents management. Metaphorically speaking, they act as the backbone of any business organization. Accountants ensure that the company’s finances are in perfect order, through taking on budgeting and expenditure.  

Be it a start-up or a huge company, a company accountant’s role does not vary. It is the duty of the accountant to ensure intelligent money management and effective strategic planning and decision-making. 

Below is a comprehensive list of the responsibilities of a company accountant. 

  • They get financial statements done. 

A comprehensive and well-prepared financial statement enables a company to make informed business decisions. First, accountants collate relevant financial data from various trusted sources including balance sheets, cash flow, and income statements. Then, they analyze available data to check for patterns, trends, and potential anomalies. Finally, they give out data-driven insights and recommendations to the management.

  • They forecast spending and allocate budget. 

Financially successful companies have the ability to forecast possibilities and allot resources. Accountants align the crafted budget to the goals of the organization. They match the investment and expenses to its income. They also identify potential opportunities and threats, and make proactive initiatives to reach the business targets. Besides that, accountants sustain the needs of the organization including its workforce through wise use of resources. 

  • They maximize tax efficiency and compliance. 

One of the crucial roles of accountants is ensuring that the company is tax-compliant. Through careful tax planning and preparation, they see to it that no tax obligation is left unsettled. They even recommend better ways to trim down tax liabilities without compromising compliance. Proper records management is every successful accountant’s secret. This does not only ensure transparency, but also lessen penalty and audit risks.   

  • They sustain the effectiveness of the company’s internal control system. 

In the corporate world, trust and integrity are a huge deal. It is for this reason that accountants are serious about risk management and internal control. They identify possible vulnerabilities, design risk mitigation strategies, and closely monitor the effectiveness of these strategies when used in the context of the organization. 

In the integration of the risk management scheme into the company operations and framework, company accountants work hand-in-hand with other departments.  

  • They support the management in making decisions. 

Last on the list, company accountants are management partners in decision-making. They help achieve financial growth and stability. Their knowledge and expertise in scrutinizing financial data and forecasting outcomes are valuable tools in ensuring that an organization always make a sound decision. 

Business Accounting: Pros and Cons of Keeping It In-House

Businesses need accounting. However, more and more businesses have come to depend on outsourcing their accountancy needs instead of keeping everything in-house with a salaried accountant.

Should you keep your business accounting in-house or outsourced? Insourced or out-house? The answer isn’t as simple as you’d think. Long story short, outsourcing is good for short-term growth but a bookkeeper is for life.

Outsourcing vs. In-House Accounting

The pros and cons of outsourcing and in-house accounting are as follows.

  • Keep It In-House for Established Businesses: Fledging businesses that have to penny-pinch to survive until they grow big enough to become self-sufficient would rather hire accountants on a per-case basis. Established businesses that can afford in-house accounting should go for in-house accounting.
  • A Dedicated Bookkeeper Offers Dedicated Service: Once your revenue goes past a certain point, it’s better to get a full-time bookkeeper over paying for outsourced accounting. It’s like having a family doctor who knows your history over going from doctor to doctor with only a vague idea of your medical history.
  • Get Someone Who Knows Your Track Record: A full-time bookkeeper gets to take into account your company history. Even though he’s a numbers guy, the mathematics of your business will also give him an idea of which products or services make money or not. Ditto on profitable and non-profitable marketing.
  • They’re Literally Worth Every Penny: An in-house accountant is worth their weight in gold because they help calculate financial health or give you pertinent data to ensure you’re always making your best financial or business decisions. They also keep track of profitable ideas and figure out worthwhile calculated risks.
  • A Long-Term Investment: Outsourced bookkeepers don’t see the big financial picture and can only tell you if a present project, product development overall marketing scheme, corporate identity redesign, or social media marketing investment is worthwhile or not. A full-time bookkeeper knows your history, what works, and what doesn’t.
  • The Main Reason for Hiring: The main reason you should hire someone instead of outsourcing is the same reason it’s better to not outsource the CEO. When you want your employees to be all hands on deck, you want an in-house accountant to be one of them to do specific, specialized, or even unusual accounting.

Which Should You Go For?

Outsourcing is convenient, you have a whole company of accountants doing your accounting in a per-project basis, you can easily shift from one service or another without firing one and hiring another then retraining a new accountant every time, and so forth.

Again, in-house accounting makes more sense for established businesses. A full-time bookkeeper or two ensures continuity in keeping track of the business’s financial health and making informed business decisions. They can oversee the whole economic ecosystem of your company as your accounting specialist.

Underrated Source of Customers: A Google My Business Listing

It’s costly to setup your own marketing campaign from scratch. You’ll have to pay ad space from Google through Google Ads, get radio or TV spots for your commercials, and even try your hand at old-fashioned print advertising on newspapers and posters.

Why not use the GMB listing instead? So join me as we get a Google My Business Listing to get a nice flow of leads and customers to your business today!

Boost Your Business with Google My Business

GMB refers to Google My Business. It lists your company website or company details like a digital yellow pages.

  • GMB as a Business Listing: This versatile tool is usually overlooked because it’s so old-fashioned. It involves getting listed there like an old-fashioned online directory. Think the curated results of Yahoo before it too became an automated search engine.
  • Free Marketing Empowerment: A GMB listing has the best price ever of zero dollars. However, you must first quickly google your business to see if you have a GMB listing. If there’s none, you need to put up one by signing into the service with your Google Account.
  • Enter Your Business Information: Once you’re prompted by GMB, add a listing by entering your business name, business category, business hours, address or service area, contact number, and URL of the website. Make sure your info is accurate and typo-free.
  • Claim Ownership: There are times when your business is already listed on Google because users tend to do so on your behalf if they’re regular customers. Either claim or request ownership of the listing then control your GMB presence from there.
  • Great for Startups: Add or claim a GMB listing because it’s important for most businesses as a source of potential customers. It’s active, people use it since it’s Google and they trust the brand, and it proves old digital directories still work.
  • Digital Yellow Pages: Instead of depending on the Google algorithm or A.I. to seek proper search results through contextual clues on search signals on popular websites, you can have your business and its webpage curated and listed on Google My Business instead.
  • For Startups and Established  Businesses: Google My Business gets the right kind of eyeballs on your business whether it’s a newly established startup or it has existed for years but has low visibility online because save for social media posts.

The Verdict

Instead of paying thousands of dollars on print advertising, TV spots, radio jingles, and even online CPC (cost-per-click) campaigns, use the Internet to list your business for relatively free. The return of investment for free advertisement is huge regardless of how much you get from it.

It’s something for relatively nothing (except maybe your time). Instead of getting a return that’s a tiny fraction of what you paid, you can use this versatile free tool to pay dividends at the fraction of the cost (your time, maybe).

What ROI Do I Need For My Business To Thrive?

Running a business can be financially challenging due to the expenses associated with marketing and inventory management. These costs make it crucial for business owners to understand how to calculate return of investment (ROI), in order to make informed decisions and allocate resources effectively.

ROI, as the name suggests, is the profit generated from an investment. It provides business owners with a clear picture of the financial gains they obtained from their investments. It further allows them to assess the overall performance of their business.

Although it differs from one business to another, a minimum ROI of 15% is generally considered a positive indication that the business is performing well. However, ROI is just one piece of the puzzle when you check whether or not your business is successful. Other factors such as brand awareness and customer experience also play significant roles.

By calculating ROI and considering the above-mentioned factors, business owners can gauge the financial status of their business. These insights somehow enable them to make informed decisions, optimize their strategies, and ensure the long-term profitability and business growth.

Now, if you’re seeking ways to enhance your business’s Return on Investment (ROI), you’ve come to the right place. Here are some valuable strategies to maximize your business’s financial success and improve your ROI.

  • Focus on more expensive items.

To shoot up return on investment (ROI), consider focusing on higher-priced items. By offering services or selling products with a higher price, you can increase your total revenue without significantly increasing your costs. Since profit margin on higher-priced items is greater, this strategy can lead to a higher overall ROI percentage.

  • Cut down cost of operation.

Another effective approach is to streamline your operational costs. This can be achieved by negotiating better rates and deals with suppliers. Find ways to reduce overhead expenses. By successfully trimming down your operating costs, you can improve your bottom line and ROI.

  • Intensify marketing efforts.

Increase your sales. One way to achieve this is by expanding your product or service offerings. Customers appreciate a business that provides them with a wider range of options. Also, review and revamp your current marketing strategy to adapt to changing market trends. Embrace the power of social media platforms, and launch new advertising campaigns to reach potential customers in innovative ways. These tactics can significantly boost your sales and contribute to an improved ROI.

Lastly, nothing beats with exceptional customer service. Providing a positive and satisfying experience for customers encourages loyalty and repurchases. Therefore, it is crucial for businesses to prioritize delivery of excellent customer service because it directly impacts sales. It contributes to an enhanced ROI as well.

S-Corp, C-Corp, or LLC: Crucial Decision For Any Business

For your information, C corporations (C corps) and S corporations (S corps) are two of the most popular forms of business configurations. Each structure has benefits and drawbacks, and S and C corps pay different taxes, but there are also parallels between them.

Five distinct company structures or forms are available for new companies to copy: Sole Proprietorship, Limited Liability Company (LLC), Partnership, S Corporation, and C Corporation.

The Primary Forms of Ownership for Businesses

How a business should be incorporated actually depends on its objectives, size, and nature. When setting up your company, the different forms mainly dictate how they’re taxed.

  • Which is More Preferable?  A C corp, S corp, or LLC is not intrinsically “better” than any other type of company. Instead, these designations merely specify how a business is taxed and the regulations it must follow to remain in compliance with the Internal Revenue Service (IRS).
  • What S or C Corps Bring to the Table: Though that’s not always the case, S corps often tend to be sole proprietorships or smaller enterprises, whereas C corps typically tend to be larger corporations. They’re both obliged to file tax returns for their business’s profits and income.
  • The Gray Areas of the Corps: When determining the best tax status for expanding small and mid-size businesses, there’s a lot of gray area. C and S corps both allow their shareholders and owners to have limited liability protection, shielding their personal assets from litigation and directing debt collection efforts toward the company.
  • What about LLCs? The LLC is a type of business structure that shields the personal assets of a business owner from liabilities or obligations of the company. LLCs can be anything from sole proprietorships to companies employing hundreds of people.
  • Why are Examples of LLCs? For instance, a lot of law firms are LLCs, and independent contractors or freelancers may choose to create an LLC in order to protect their personal assets from lawsuits or debt collection attempts made against the company.
  • Any Business Entity Type Can Become LLCs: Any business type—from proprietorships to partnerships as well as S corp or C corp—can become an LLC to get protections and benefits such as flexible management structure, pass-through taxation, limited liability, and a separate legal identity.

What LLC Essentially Is

If you don’t want your company to have a board of directors and have as many owners–referred to as members–as you want, then you should turn it into an LLC. In fact, the members or owners of this LLC don’t even need to be U.S. residents or citizens.

The IRS mainly recognizes four of the five main business entity types—S corp, C corp, partnership, and proprietorship. The fifth type, LLC, is something that any of the four types can turn into. They can be formed as LLC for the sake of liability assurance then get taxed in accordance to their main type.