Top 5 financial mistakes to avoid for startups and small businesses

1. Beautiful accounting software
Top 5 Finance
Mistakes
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2. President, Xero USA
Hi! I’m Jamie Sutherland.
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3. • Global leader in online accounting
• 160,000+ paying businesses
• 6000+ Xero accounting partners
• 400+ staff (US HQ in San Francisco)
• A new release every 3 weeks
• Unlimited users with different roles
• Bank feeds from 5000+ institutions
2007 2008 2009 2010 2011
Introducing Xero
2012
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4. The
Facts
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5. Marketplace Facts
• ~500,000 small businesses open their doors each year
• ~65% of new jobs are created by small businesses
• ~2,000 startups get venture capital funding in the US each year
• ~50,000 startups get funded by angels each year
Good
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6. Marketplace Facts
• ~500,000 small businesses open their doors each year
• ~65% of new jobs are created by small businesses
• ~2,000 startups get venture capital funding in the US each year
• ~50,000 startups get funded by angels each year
• 67% of small business don’t last longer than 5 years
• Over 90% of tech startups fail
Good
Bad
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7. Sunday, August 18, 13

8. Why?
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9. Financials Matter
Compliance
Business
Success
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10. Financials Matter
Compliance
Business
Success
Insight &
decision
making
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11. Financials Matter
Compliance
Business
Success
Insight &
decision
making
Cashflow
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12. Financials Matter
Compliance
Business
Success
Insight &
decision
making
Cashflow
Manages
sales &
customers
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13. Financials Matter
Compliance
Business
Success
Insight &
decision
making
Cashflow
Manages
sales &
customers
Monitor
expenses &
vendors
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14. Financials Matter
Compliance
Business
Success
Insight &
decision
making
Cashflow
Manages
sales &
customers
Monitor
expenses &
vendors
Funding
sources
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15. Finance Quiz
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16. What is the biggest expense for most businesses?1.
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17. What is the biggest expense for most businesses?
Answer
1.
Staff
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18. At the end of the month you subtract your income from your
expenses. Does that equal cash flow?
2.
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19. At the end of the month you subtract your income from your
expenses. Does that equal cash flow?
2.
Answer No
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20. “What is the strangest item your client has tried to deduct from
income”?
3.
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21. “What is the strangest item your client has tried to deduct from
income”?
a) A family vacation disguised as a business trip
3.
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22. “What is the strangest item your client has tried to deduct from
income”?
a) A family vacation disguised as a business trip
b) Traffic tickets
3.
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23. “What is the strangest item your client has tried to deduct from
income”?
a) A family vacation disguised as a business trip
b) Traffic tickets
c) Escorts
3.
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24. “What is the strangest item your client has tried to deduct from
income”?
a) A family vacation disguised as a business trip
b) Traffic tickets
c) Escorts
d) Gambling losses
3.
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25. “What is the strangest item your client has tried to deduct from
income”?
a) A family vacation disguised as a business trip
b) Traffic tickets
c) Escorts
d) Gambling losses
e) Clothes for their dog
3.
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26. Top 5 Finance
Mistakes
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27. 1. Cash flow
projection mistakes
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28. Understanding Cash Flow
Your
Business
VendorsCustomers
ExpensesSales
Money OutMoney In
$ $
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29. Ask yourself:
What money do we need to get
through next week/month?
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30. 2. Suck at collecting
payment
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31. Get Paid Faster
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32. Get Paid Faster
• Invoice promptly
• Set shorter payment terms
• Email invoices with link to pay
• Accept credit cards
• Get an upfront deposit/retainer
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33. 3. Waiting too long to
track spending
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34. Sunday, August 18, 13

35. Sunday, August 18, 13

36. 4. Not keeping
financials up to date
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37. Sunday, August 18, 13

38. 5. Aren’t using an
accountant
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39. 225%
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40. • Get taxes done
• Keep me out of jail
• Proactive advice
• Monthly reporting
• Improve cashflow
• Someone who knows your game-plan
New age accountants have emerged...
Old school accountant
New school accountant
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41. Sunday, August 18, 13

42. Sunday, August 18, 13

43. $300/month
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44. Questions?
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45. Xero
Beautiful accounting software
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