BOOKS IN A MESS OR NOT UP TO DATE? FEEL LIKE YOUR DROWNING?

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There is a lifeline out there, you just need to be ready to accept it.

If you have read the book “the Compound Effect” by Darren Hardy, the main theme is that you only have to make small changes consistently to lead to big changes over time. Being overwhelmed because you feel your books are a mess or not up to date is not where any of us want to be but we somehow ended up here. Many small business owners usually find come January/February we are scrambling to get our financials to our tax preparer and many of us swear that this year will be different but 12 months pass and we are back in the same boat.

There are four things you can do now and one you may have already done so there is less to do.

  1. Separate your business accounts from your personal accounts

  2. Set up 3 business accounts - 3 bank accounts (“Operating”, “Tax Savings”, and “Profit”) and 1 business credit card

  3. Invest in a cloud based accounting system and learn how to use it

  4. Commit to work on your accounts 1 hour a week or hire a bookkeeper if the amount of time spent (charged at your hourly rate) is greater than the cost of a bookkeeper.

 

Why Separate your Business and Personal Accounts

Opening accounts that are purely for all your business income and expenses are important for two reasons

  1. It will be easier to make sure you capture all your business income and expenses and less time working out whether the expense was business or personal

  2. If you elect to transition to a cloud based accounting system such as QuickBooks online, you will save a lot of time not having as many transactions to process. 

Why FOUR business accounts

A great book to read is “Profit First” if you are struggling with having enough money from your business to live the life you dreamed of or you want to be more profitable, this is a great book to read.  It’s not a book about how to make more sales, it’s about making sure you pay yourself first instead of everyone else and how to become more profitable so you can pay yourself for the hours you out into the business.  The books suggest five or more accounts, but what I found is that many banks charge a fee if your balance falls below a certain limit.  With three bank accounts you can still follow the principles but avoid accounts gong to a zero balance and being charged a fee.  The credit card is used to pay vendors as that will eliminate the need to send out 1099’s in January to any vendors paid more than $600 – this saves you money!!  One of the best lessons learned from profit first is to control your expenses, if you decide to use QuickBooks Online, invest money in getting your QuickBooks accounts (categories) set up correctly and learn how to use the software so you can get accurate information from the reports (Profit and Loss) you will now be able to run once your accounts are up to date.

Cloud-based Accounting Software - QuickBooks Online

I have used QuickBooks for over 15 years and started with QuickBooks desktop (which was a great accounting system but had issues every-time you had an update and was very restricted to being “at the office” to work on accounts).  QuickBooks Online has changed all that as it is a cloud-based system that is accessible anywhere you have internet connection, reports can be downloaded at a click of a button and transactions can be processed quicker due to more automation features such as batch processing, rules and AI. It is great value for money – most popular package is about a dollar a day (if purchased through a bookkeeper or accountant). Even if you are a start-up, this accounting software is worth the investment - you can start off with one of the more basic subscription (QBO Essentials) and as your business grows, you can upgrade to the next level (QBO Plus or QBO Advanced).

Bank data is synced with QuickBooks: This feature downloads transactions from your bank and you then record the transactions.  There have been so many great features that have come out in the last couple of years to speed up the processing of these transactions including the system recognizing vendors to certain categories (AI), you can set up “rules” for recurring transactions that will auto-add the transaction to a category (you don’t need to do a thing, except review at the end of the week/month) and one of the best features if your account is behind,  the ability to add transactions in “Batches”, which means your 10 months of cell phone expenses can all be added at one time. Having this features will save you time and time saved is money saved!! 

Company Snapshot: The Company Snapshot screen in QBO tells you, every day, what you’re making, what you’re spending and more

Track sales and expenses:It helps you understand your cash flow and how your business is doing so that you can make better decisions.

Instant access to critical information and reports:With QBO, you can check your Profit and Loss and Balance Sheet at the click of a button. You can also drill-down into business knowledge with pre-built and customizable reports. You can download information easily into an excel file to create budgets and forecast cashlow.

Consolidated customer and supplier data:It stores details of an unlimited number of customers and suppliers.

Professional estimates: It also enables you to create professional-looking quotes and proposals for your customers.

Easily creates and manages invoices: QBO helps design and create professional invoices, print or send them via email. Customers can pay online straight from your invoice. No more waiting for checks to be sent (and then to be banked) which makes payment time quicker.  It also lets you keep track of who owes you money and whether or not you’ve been paid. 

Payroll & Independent Contractor Payments: If you have employees or you a growing and start to hire, you can add Payroll to QuickBooks. Some other payroll companies may seem cheaper but QuickBooks has always been reliable and you can make sure everyone’s been paid and that the taxes remitted are being remitted and the transactions are automatically recorded in Quickbooks Online.

 

Other Benefits

• QBO is completely web-based and hence, you don’t have to install or download traditional software or worry about operating-system compatibility. You simply launch your web browser and go.

• You can log in to QuickBooks Online from any Internet-connected computer, and hence, the freedom to work from anywhere, anytime.

• QBO connects users in different locations by allowing multiple users to access your account. You can specify permission levels to control what type of data each user can see or modify.

• QBO automatically backs up your data every two hours and meets the highest online security standards for data storage.

If you are overwhelmed and feel like you are drowning and are already dreading getting your books up to date, we can help guide you through the process. We will set up your Quickbooks Online (Essentials, Plus or Advanced) and offer a 20% discount off the regular monthly subscription price, customize your accounts so that you have the information you need, and eliminate the stress and frustration of learning a new accounting system by providing 1:1 personalized training and ongoing support for as long as you need. Our newly designed program is 12 weeks long and your commitment is one hour a week after your first training session (2 hours). To start your journey towards organizing your books we offer a free 30 minute discovery call to find out more about you and your business. To set up a time, please visit https://www.theaussiebookkeeper.com/contact