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Basics to Budgeting for Retail Space

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StrategyDriven Managing Your Finances Article | Basics to Budgeting for Retail Space

Regarding budgeting for retail space, several key factors must be considered. First and foremost, you’ll need to determine how much space you need and what location you want to be in. This will largely determine your rental costs, which can vary greatly depending on factors such as the size and location of the space.

Once you know your rental costs, you’ll need to consider the costs associated with fitting the space. This can include everything from painting and flooring to lighting, shelving, and any equipment or fixtures you may need. You should also factor in the cost of any necessary renovations or repairs to the space.

In addition to these costs, you’ll need to consider ongoing expenses such as utilities, insurance, and property taxes. You’ll also need to set aside money for marketing and advertising, as well as for inventory and other operating expenses.

Create a detailed budget and stick to it as closely as possible. This will help you avoid overspending, have enough money to cover your expenses, and keep your business running smoothly. You should also regularly review your budget and adjust it to account for changes in your business or the market.

How Do You Find Average Monthly Commercial Rents Near You?

To find the average monthly commercial rent for a specific location, you can research online or contact a local real estate agent or commercial property management company. In addition, several websites offer information on commercial rental rates, including MyEListing.com. 

A site like this may provide average rental rates for specific areas or types of properties. Additionally, you can look at rental listings in your area to get an idea of what businesses are currently paying for commercial space. Remember that rental rates can vary depending on several factors, including the size and location of the space, the type of business, and the property’s condition.

Examine Lease Varieties & Terms

Several different types of leases are commonly used for commercial properties. These include gross leases, net leases, and modified gross leases.

A gross lease is a type in which the tenant pays a single, inclusive rental amount that covers all of the property’s operating expenses, including utilities and property taxes. The landlord is responsible for covering additional costs, such as repairs and maintenance. This type of lease is often used for properties in good condition and requires little care.

A net lease is a type in which the tenant pays a base rental amount and a portion of the property’s operating expenses, such as utilities and property taxes. This means the tenant is responsible for covering some of the property’s costs. 

There are several net leases, including single, double, and triple net leases. In a single net lease, the tenant is responsible for paying property taxes and the base rental amount. The tenant is also responsible for paying property insurance and taxes in a double-net lease.

A modified gross lease is a type of lease that combines elements of both gross and net leases. In this type of lease, the tenant pays a base rental amount and a portion of the property’s operating expenses. The specific terms of a modified gross lease will vary depending on the particular arrangements agreed upon by the landlord and tenant.

In addition to the type of lease, several key terms are commonly included in commercial leases. These include the length of the lease (also known as the term), the amount of the rent and any increases over time, and the tenant’s obligations and rights. Other standard lease terms include the landlord’s obligations and rights, any restrictions on the use of the property, and provisions for renewing or terminating the lease.

Don’t Forget to Account for FF&E + Utilities.

When budgeting for a commercial property, it’s important to remember to account for the costs of furniture, fixtures, equipment (FF&E), and utilities. FF&E refers to the movable items used in a business, such as desks, chairs, and computers. These costs can add up quickly, so include them in your budget and factor them into your rental rates or operating expenses.

Utilities are another factor to consider. They can include electricity, gas, water, and other services necessary for your operation. The cost of utilities varies depending on the size of your space and the type of business. Research utility costs in your area and factors them into your budget to predict your expenses.

Plan for the Unexpected

When creating a budget for your commercial property, plan for the unexpected. Unexpected expenses can arise at any time, have a plan to cover them. Some unexpected everyday expenses include repairs or maintenance to the property, unforeseen increases in utility costs, or changes in market conditions that affect your rental rates or operating expenses.

One way to plan for the unexpected is to include a contingency fund in your budget. This is a set amount of money that is set aside expressly for unforeseen expenses. The amount of your contingency fund will depend on factors such as the size of your business and the type of property you are leasing. You should regularly review your contingency fund and make adjustments as needed to ensure that it is adequate to cover any unexpected expenses that may arise.

In addition to a contingency fund, have a plan to deal with unexpected expenses. This can include setting aside a portion of your monthly revenue to cover unplanned expenses or having a line of credit that you can tap into if needed. By planning for the unexpected and be prepared to handle unexpected costs, you can protect your business and keep it running smoothly.

Physical Additions to Your Space

Suppose you plan to make physical additions to your commercial space, such as building or renovating part of the property. In that case, it’s essential to factor these costs into your budget. These projects can be expensive, so planning and budgeting them in advance is necessary.

When budgeting for physical additions to your space, you’ll need to consider the costs of materials, labor, permits, and other expenses associated with the project. In addition, you should also factor in any costs associated with disruptions to your business, such as lost revenue or additional fees for temporary space or storage.

It’s essential to carefully research and compare the costs of different options and get detailed estimates from contractors or other professionals who can help you with the project. You should also consider any potential long-term benefits of the additions, such as increased revenue or improved efficiency, and weigh these against the upfront costs. Finally, by carefully planning and budgeting for physical additions to your space, you can ensure that your project is successful and fits your budget.

Early Lease Termination & Renewal After Expiration

If you need to terminate your lease early or want to renew it after it has expired, there are several factors to consider.

First, understand the terms of your lease agreement. This will outline the specific conditions under which you can terminate your lease early or renew it after it has expired. In most cases, you will be required to give the landlord advanced notice of your intention to terminate the lease or renew it, and you may be required to pay the penalty or other fees.

If you want to terminate your lease early, you’ll need to negotiate with your landlord to agree on the termination terms. This may include compensating the landlord for any lost rent or other expenses they incur due to the early termination.

If you want to renew your lease after it has expired, you’ll need to negotiate a new lease agreement with your landlord. This may involve negotiating new terms, such as the lease’s length, the rent amount, and other conditions or provisions.

You’re Still on the Hook if Your Business Fails

If your business fails, you are still responsible for fulfilling the terms of your commercial lease agreement. This means that you must continue making your rental payments and comply with any other lease provisions, such as maintaining the property and not causing any damage to the space.

If your business fails, you may be able to negotiate with your landlord to terminate your lease early or to make other changes to the agreement. However, this will depend on the terms of your lease and the circumstances of your business failure. In some cases, you may be required to pay the penalty or other fees for terminating your lease early or for not fulfilling the terms of the agreement.

Why Accounting in Business is Important

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StrategyDriven Managing Your Finances Article | Why Accounting in Business is ImportantAccounting is a crucial part of any business. From local startups to global conglomerates like Google and Amazon, accountants are inseparable from a company’s success.

Accounting is a measurement and communication process that supplies critical financial data to various users, including investors. It helps to establish credibility with these external users, enabling them to make informed decisions about investing or lending money.

Profitability

In business, profitability is defined as the income generated by a company from sales of products or services. It also includes the expenses that are incurred in running the business.

Expenses can include salaries, utilities, rent, and other items a business needs. A company might not generate profits if it had insufficient funds to pay these costs.

Profitability is a critical metric in business as it allows a company to determine its success and future growth. It also helps investors understand how well their investments are paying off.

There are many ways to increase a business’s ability and overall growth. A common practice is to decrease sunk cost, which occurs when a company spends money on unprofitable projects.

Liquidity

Liquidity is your company’s ability to pay its bills quickly. It’s a financial metric that accountants and investors look at when deciding whether to lend you money or invest in your business.

Liquid assets are cash, securities, receivables, and other financial assets that can be converted into cash within a short period, like a day or two. Intangible assets, such as buildings or equipment, are less liquid and can take longer to convert into cash.

When a business has too much liquidity risk, it might not be able to cover its short-term bills or liabilities and will need to restructure, sell assets, file for bankruptcy, or go out of business. Low liquidity also makes it harder to pay employ employees, order inventory, and pay recurring monthly bills like rent.


Taxes

Taxes are levied on goods and services by governments. These taxes serve various purposes, from providing revenue to aiding the development of the economy.

Some taxes, such as sales and value-added taxes (VAT), are applied at the retail level, while others, such as excises, are levied at a more administrative and bookkeeping pre-retail stage. Whether direct or indirect, all governments need income, but the challenge is to carefully choose the level of tax rates and the tax base.

As businesses become more extensive, tax accounting becomes more important. As a result, companies are more likely to have more taxable assets and liabilities. Additionally, businesses that rely on quarterly taxes must meet specific deadlines and reporting requirements to stay compliant.

Payroll

Payroll is another accounting process that businesses use to pay their employees for work performed. It includes tracking hours worked, calculating pay, and distributing checks to employees on payday.

It also involves deductions for local and federal taxes, social security, unemployment insurance, and employee benefits. Therefore, businesses need to track their expenses related to payroll accurately and ensure that they are acting under current tax laws.

A reliable payroll team helps increase employee satisfaction by paying their dues regularly and on time. This boosts employee loyalty and makes them want to continue working for the company.

Payroll also includes bonuses and other incentives for employees that encourage them to perform better. These incentives show employees their worth in a small business and motivate them to do their best.

5 Tips to Simplify Your Small Business Accounting Processes

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StrategyDriven Managing Your Finances Article | 5 Tips To Simplify Your Small Business Accounting Processes

Starting a business or owning one takes a lot of work. You’ll need to manage your business capital and finances and keep the company on the right track. Implementing small business accounting processes is one way to do this.

Business accounting refers to the practice of recording, analyzing, interpreting, and presenting financial information systematically. This is crucial for every business as finances need to be managed, liquidated, and organized. However, these processes can be complex and challenging.

To help you, this article discusses five helpful tips to simplify your small business accounting processes. Keep reading!

1. Separate Your Business and Personal Finances

This part is crucial when operating your business, whether big or small. Doing this helps you make sure everything is clear. Moreover, you can easily track all your business-related expenses without resulting in any mistakes and discrepancies.

You can start by setting up a ‘business only’ bank account. You can also include having business credit and debit cards or any other form of payment for your business. It would help if you also considered filing to become a limited liability company (LLC). This will help protect your personal assets in case your vendors or clients try to sue you. All of these can help you and make your accounting management processes a lot easier to manage.

2. Engage With a Professional

Accounting can be complicated but be confident. You can always ask for help from professionals to help you in your small business accounting processes. Hiring an accountant is an option, and here’s why:

  • It Saves Time And Money: Accountants take over your supposed financial tasks and let you focus on the core operations of your business, boosting productivity and increasing profit.
  • It Helps To Prevent Tax Penalties: They are fully aware of different tax liabilities and knowledgeable enough to minimize and handle the risks for your business.
  • It Can Assist In Growing Your Business: They can organize all your accounts. In addition, they can provide valuable insights if you’re planning for an expansion.
  • It Can Provide Security: Accountants are knowledgeable in data protection rules and regulations.

These are just a few benefits of hiring an accountant for your business firm. You can also consider talking with a financial expert to guide you if you want to seek more advice. That way, you can learn additional information and ensure your decisions suit your business.

3. Centralize Your Payment Scheme

Using different forms of payment can be confusing and challenging to manage. Therefore, it is essential to centralize your payment. You can do this by paying your vendors from one single source.

You can apply this to your clients as well. If your clients were to pay, you should ask for payment as soon as possible and provide them with a short time gap for their payment. That way, you can ensure you will have a steady cash flow in your business.

4. Always Check Your Financial Records

Keep everything recorded for you to check the accuracy of financial data. You can analyze your income, cash flow statement, and balance sheet. You must understand how much money you earn and what you spend. Moreover, you should know where your money is coming from and where it is headed.

To check and keep your financial records updated, you will need an hour or at least 20 minutes to keep everything recorded. Furthermore, it is vital to set aside time each week instead of at the end of the month to balance your book. Always triple-check your records to ensure the accuracy of financial information.

StrategyDriven Managing Your Finances Article | 5 Tips To Simplify Your Small Business Accounting Processes5. Automate and Streamline Your Small Business Accounting Processes

The digital age contributes to efficient business operations. Therefore, consider embracing technology to streamline your accounting processes. To upgrade your accounting processes, here’s what you should do:

  • Focus on digital applications offering essential features you can use. As much as possible, look for cloud-based accounting software that can easily access and update software automatically.
  • Consider using invoice and payroll management tools.
  • Determine the cost-effectivity and scalability of the software tool.

It would be best to prioritize all these if you embrace new technology. If you still need to become more familiar with these, you can start by using spreadsheets online. Moreover, consider using existing generated templates to make it easier. For instance, learning new software like Finlyte can initially pose a challenge but often proves to be beneficial in the long run due to its diverse features and user-friendly interface.

Conclusion

Applying these tips can help you simplify your business accounting processes. Implement it accordingly to ensure the efficiency and productivity of your business. Accounting can sometimes be complicated, but with the right decisions, it can be more accessible.

How Telecom Expense Management Benefits Large Scale Enterprises

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StrategyDriven Managing Your Finances Article | How Telecom Expense Management Benefits Large Scale Enterprises

Any organization on a fast growth track often outpaces its strategic technology roll-out plans. You may be utilizing a mobile workforce, or you may be managing a team of remote employees. You may want to acquire VoIP, faster Internet, or cloud-based servers. While you may have the staff to suggest solutions, your Accounts Payable function does not necessarily have the manpower to monitor the resulting expenses. This is where telecom expense management companies play a crucial role for your P&L.

Technology Asset Management

Even when the vendor procurement function manages technology asset acquisition efficiently, keeping track of inventory and utilization often becomes a costly “second thought”. This is where hiring telecom expense management companies to manage technology assets at an enterprise level avoids shortages, service disruptions, and redundancies. These companies can quote, contract, and monitor vendor billing, as well as capitalize on vendor consolidation to acquire assets at the best price points.

A good illustration of the value created by TEM vendors at an enterprise level can be found in the reviews published in the Gartner 2021 Market Guide TEM Vendors, the top reference in the industry. TEM providers offer a variety of services to streamline asset inventory management, invoice auditing and payment, as well as usage tracking and reporting.

Billing Audits & Pay

Telecom and technology billing can read like a foreign language to even the most qualified accounting clerk. TEM experts will scrutinize each bill for inaccuracies and overcharges. When new technology or services are acquired, billing auditors will ensure that the installation charges and subsequent invoicing are accurate. In addition, these professionals will find out misapplied rates resulting in overpayments. Billing audits are time-consuming tasks: when managed by TEM experts, Accounts Payable staff can focus on other value-adding processes.


Service Audits

Implementing a proactive expense management team can save organizations a significant percentage on their telecom and technology costs. In reality however, most companies don’t employ anyone with the knowledge or time to monitor service costs effectively. TEM experts identify savings opportunities by monitoring in quasi real-time the evolving needs and utilization rate of technology assets in an organization.

Enterprise-level growth often involves adding service locations and sales offices. It is typical to observe vendor invoices going to multiple offices when centralized billing would be way more cost-effective. Similarly, multiple departments inside the same organization may be adding lines or services without authorization or disregarding company procurement policies, and soon enough hundreds of invoices flow to local managers without any kind of control. Telecom expense management professionals spot these issues and coordinate with vendors to ensure cost-effective billing consolidation.

Mergers & Acquisitions Cost Management

Mergers and acquisitions often result in growing pains. With minimal interference, TEM companies oversee procurement and audit processes to ensure that technology needs are adequately met without excessive overlap or costly redundancies. While the C suite focuses on moving the expanding organization forward, TEM professionals work behind the scenes to sort out the details of expense consolidation, service activation and termination, and vendor invoice auditing.

Proactive cost avoidance should be an OKR in any organization. Telecom expense management companies help organizations achieve measurable results in cost reduction and effective inventory management.

How To Enhance Your Business’s Finance Department

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StrategyDriven Managing Your Finances Article | How To Enhance Your Business's Finance Department

Finance is the backbone of any business. Without good financial planning and management, a company can quickly find itself in trouble. As such, ensuring that your business’s finance department is up to par is important. Here are the top ways to enhance your company’s finance department:

Implement Financial Software

Financial software help streamline many of the tasks performed by your finance department. This frees your employees so they can focus on more strategic tasks.

The right software solution can automate tasks such as bookkeeping, invoicing, and tracking payments. This will help improve your finance department’s efficiency and allow your employees to work more effectively.

You can use different software and templates for your business. For example, for bookkeeping, you can use FreshBooks, and for invoicing, you can use Zoho Invoice.

Hire Qualified Accountants

Good and experienced accountants are worth their weight in gold. They can help keep your financial records in order and offer advice on improving your company’s financial health.

When hiring an accountant, be sure to look for someone who is qualified and has experience in the finance department. You should also ensure they are a good fit for your company culture.

You can engage with finance & accounting recruiters to help you find the right candidate for your business. They will be able able to identify qualified candidates that match your specific needs.

Develop Strong Internal Controls

Strong internal controls are essential for preventing and detecting errors or fraud in your company’s financial transactions. They also help to ensure that your financial statements are accurate.

There are many different types of internal controls, but some common ones include segregation of duties, employee background checks, and physical security measures. Others include authorization requirements and independent audits.

For effective internal controls, you should customize them to fit the specific needs of your business. You should also do regular reviews to ensure they are still relevant and effective.


Develop Policies And Procedures

Policies and procedures are important for ensuring that your finance department runs smoothly. They can help to standardize processes and improve communication between employees. Some common finance policies and procedures include expense reimbursement, Accounts Receivable (A/R) management, and Accounts Payable (A/P) management.

Developing policies and procedures specific to your company’s needs is important. You can develop policies and procedures by yourself or with the help of a professional. If you choose to do it yourself, many templates and resources are available online.

Good Remuneration And Benefits

It’s important to offer good remuneration and benefits to your finance employees. This will help to attract and retain good talent. Some common benefits you can offer include health insurance, retirement plans, and paid time off.

Remuneration is not just about money but also about recognition and appreciation. Show your employees that you value their work and contribution to the company. This can be easily done through things like bonuses, promotions, and awards.

Foster Growth And Development

Ensure to provide opportunities for your finance employees to grow and develop in their careers. This can be done through training, mentorship, and educational opportunities. Conferences and seminars are also great ways to encourage professional development.

Encourage a culture of learning in your company and provide opportunities for employees to share their knowledge with others. This will help to create a strong team of finance professionals that are always learning and growing.

Encourage Teamwork

Teamwork is a key ingredient for the success of any finance department. It’s expedient to foster an environment where employees can work together effectively. This can be done through team-building exercises, regular meetings, and communication tools.

Technology can also help to facilitate teamwork. Many different software programs can help employees to collaborate and communicate with each other.

Provide A Healthy Work-Life Balance

It’s important to provide a healthy work-life balance for your finance employees. This means offering flexible work hours, telecommuting options, and childcare assistance. Other benefits that can help to promote a healthy work-life balance include fitness programs and wellness initiatives.

A healthy work-life balance, therefore, becomes essential for employee productivity and satisfaction. It can also help to reduce turnover in your department.

Finance is a critical part of any business. Following these tips can enhance your company’s finance department and ensure it runs smoothly. These tips will help you to streamline many of the tasks performed by your finance department, freeing up your department so they can focus on more strategic tasks.