Where did all the money go?
You’ve spent countless hours, nights and weekends working on your business, but at the end of the year your bank account does not reflect it. How can you change the narrative?
Many people look at their sales and so long as they are going strong they think the business is profitable (which is reflected in the bank account). What many business owners fail to do is to focus on what money is being SPENT to make the sales. Here are some tips to help ensure that the money that you want in your bank account at the end of the year is there.
Create a budget – This is your roadmap and essential tool to help you reach your Monthly, Quarterly or Yearly goal. Without a budget, how do you know what sales you need to reach and expenses you need to keep in check each month so you can achieve the amount you want to see in your bank account at the end of the year. COMMIT to creating a budget and review you actual income and expenses against your budgeted income and expenses. If your sales are less than expected, spend the next few weeks focusing on increasing your sales. Review your expenses – how did you do against your budgeted amounts, did you overspend in some areas, if yes, make sure the next month is within budget.
Invest in technology to streamline your bookkeeping process - for as little as $1.50 a day, you can invest in a cloud-based accounting system that:
has a budgeting tool for you to use to create a budget (or two, if you want a conservative budget and a dream budget)
downloads transactions directly from your bank/credit card account (keep your business accounts completely separate from your personal account – you only need 3 bank accounts. Business “checking”, “tax savings”, “profit” and “credit card”)
enables you to invoice clients and track outstanding invoices and be paid from your invoice. Keep track of your outstanding invoices – your sale is not money in your bank until it has been paid
keeps track of money you owe people (being able to pay as close to the due date as possible enables better cashflow and saves money in late fees or pay early and take advantage of getting a discount)
pays employees/yourself
allows you to digitize and attach receipts
Streamlining your accounting process saves you time, allows you to easily track your actual v budget at any time, improves accuracy, provides real time information and allows everything to be stored securely in the one place.
Invest money in customizing you accounts
Customizing your accounts will enable you categorize your income and expenses so that the information helps you with your decision-making process. If you have different types of programs that you offer to you clients, having one category “Income” will not allow you to determine (with ease) the profitability of each course offered. You may want to track specific expenses in more detail and others in less detail, customizing your accounts will enable you to do this
Get Help from the right person
When looking for someone to customize your accounts or take over your books on a more permanent basis, I would look for someone who
will spend time to find out what information you are looking to obtain from your accounting system so they can set up your chart of accounts (categories) that will provide relevant data to help you make informed business decisions – even if you have your accounts set up, have it reviewed so you can fine tune it
will provide training and offer ongoing support if you are doing the books yourself.
you like –if you are afraid to contact your accountant/bookkeeper and dread talking to them as they are abrupt and almost rude, find someone else…
will update your books on a weekly basis– the more current your books are the easier it is to track how your business is performing and to make adjustments (reduce expenses, increase the price of your program or focus on more sales).
will keep you accountable – follow up with you, provide support on an ongoing basis, is responsible and available to answer questions
Commit to getting it done
Create your budget, invest in technology and the right person to do your books. Look at your Income and expenses against your budget often, so you can make the necessary changes in how you run your business, so at the end of the year you REACH YOUR GOAL - your bank account now reflects your hard earned work!
If you need help getting your books set up, setting up a budget or streamlining your bookkeeping process, we are offering a FREE 1 hour free consultation. Set up your Discovery Call today