As with any game in sports, it’s rare that a good offense wins without a good defense to back it up. Your finances are no different.
So how often should You analyze your “game” to determine any weaknesses and reposition resources as necessary? Once a month is the best practice, subject to the unexpected, a flag that could put Your income at risk and elevate expenses.
Having an “A” game in place is good, and having a plan “B” is also recommended for reasons noted above. Here are a few tactics on how to fortify Your game plan:
- Are there other possible revenue streams You could implement
- Ideally you already have and are using a budget, and make sure You include Owner Draws in the budget
- Document all cash purchases to capture any deductible personal or business expenses
- Save consistently for rainy day and/or the emergency funds
- Be as debt free as possible, pay off credit cards regularly if possible
- Rotating credit cards and paying them off affects credit scores in a positive way
Accountancy is all about the numbers, achieving offensive/defensive balance, and being able to quickly adjust to change.
MJB’s Bookkeeping Solutions will work the sidelines to assist You in creating a clearer economic path, so that You can spend your effort and time on what is important. Call, Email, or Make an appointment for Your No Obligation Consultation Today.
September has arrived and many are sharpening pencils as well as skills. If you are managing multiple revenue streams and looking for a good way to assess what is working and what is not, grab your favorite note taking device and explore the ABC’s of “Classes”, and how it might provide you a clearer economic path.
Maybe you need to track product and service lines in detail. QuickBooks Classes differentiate transactions by departments, locations, product line, service type or other defining category relevant to your business or personal finance preference. QuickBooks keeps it easy and clean using the same chart of accounts across all Classes. Run a report and you will quickly see the line of business metrics.
When setting up Class Tracking think about
- How do you want to see your business segmented on your financial reports? Classes will capture not only income and expense, but also assets, liabilities, and equity transactions.
- Be consistent in how you enter class information on registers to be sure that your financial reports are accurate.
- Need additional specifics? Set up “Sub-Classes” under the main Class.
Once you have mapped out your system you will have the ability to analyze your business finances from different perspectives…using built in reports “by class”.
When you might use Classes
- A business with two or more locations – like a grocery store – could use to analyze the profitability of each location.
- A contracting business with both maintenance and installation services may want to track the return on investment of each service separately. Or, perhaps need to track by a single family, commercial, or renovate and sell investment property.
- A Non-Profit will track income and expenses by grant, event or project.
- A Property Management Company might track by tenant within a single location, or for each property location.
- A service business may be interested in tracking the location of current clients, in order to increase marketing in an untapped area.
You want to know if you are getting paid for your hard work – where, how much and when your money is coming and going, and most importantly what’s left for you. Class tracking is a great tool to do this.
If you have questions about classes or other accounting questions, please contact me or make an appointment now, to ensure that you are focusing your hard work, passion and commitment for creating value in the right direction.
The Cash method is like a checkbook. You record the income when you receive it, and record the expense when you write the check. It is easy to maintain, and good way to start for new businesses figuring out where they are going. It does not include the Accounts Receivable or Accounts Payable so may misrepresent your true income and expenses. As your business becomes more complex, you may decide you need the detail of Accrual accounting.
The Accrual method records the income when the sale is made, whether you have been paid or not, and records the expense when incurred, even though it has not been paid. It is a more intricate system to learn, however, more accurately tracks your finances. Preferred by Accountants and CPA’s for management purposes.
If you have questions about which is best for you, Contact MJB’s Bookkeeping Solutions now.
Whether you are a new start-up, or an existing business, there are (3) important financial analysis reports you should create on a regular basis, especially if you are seeking funding for the business:
- Profit and Loss Statement – This report shows you your income, your operating expenses, and the Net Income or Profit from all your hard work. Analyzing this report regularly will show where you may be spending too much.
- Balance Sheet – This report shows your Assets such as cash, accounts receivable, inventory, equipment, furniture, building, and land; your Liabilities such as short/long term notes, accounts payable, taxes, and interest; and your Equity in terms of invested capital, and retained earnings.
- Cash Flow Statement – This report shows how your cash position changed over a period of time. It shows the amount of cash earned from profit, where you received additional cash, and where your cash was spent in terms of operating, investing and financing activities.
Two documents that are particularly helpful for New Businesses are are the Start-Up Costs worksheet where you will estimate the capital you will need to open your doors, and the Break-Even Analysis which will show the exact point where you will start making profit after covering all of your operating expenses.
You have many choices when selecting a bookkeeping service. What sets us apart is our tenure of professionalism, passion for accountancy, believing in the value you provide the world, working with you to help you measure your business’ success. We serve a broad range of business client types and sizes, with expertise in various accounting software platforms. Contact MJB’s Bookkeeping Solutions today.
This is a new economy, and the landscape of “traditional” staff resources is changing. Your work hard, passion and commitment go into creating value for your customers. You want to know if you are getting paid for your hard work – where, how much and when your money is coming and going, and most importantly what’s left for you. Accountancy is all about the numbers – your business’ numbers. It’s that simple.
You have many choices when selecting a bookkeeping service. What sets MJB’s Bookkeeping Solutions apart is our tenure of professionalism, passion for accountancy, believing in the value you provide the world, working with you to help you measure your business’ success, serving a broad range of business client types and sizes, and expertise in various accounting software platforms.
Times continue to be challenging, and Individuals and Businesses alike should be paying attention to where they allocate their resources.
Are you paying more for Bookkeeping than you need to in belt tightening times?
Take a minute to contact MJB’s Bookkeeping Solutions and make an appointment today, for a clearer economic path.