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.
Do you pay attention to the bright and sunny days and the cold, dark storm clouds brewing? Do you risk going out without checking? Do you do that with your business?
You probably heard it when you first thought about starting your business, “the lack of planning and control of financial resources is the top reason for the failure of many small businesses.” You owe it to yourself to develop a barometer to measure the potential success of your business.
The words planning, budgeting, and forecasting, or their derivatives, ought to be staples in your business vocabulary.
Financial reports, the Profit and Loss (Income Statement), Balance Sheet and Cash Flow Statement that are best created monthly, are indispensable for finance managers to produce budgets and forecasts. An added benefit, they are the radar that finds and isolates trends both good and not so good, allowing you to respond quicker and make mid-course corrections to your business’s advantage, to weather the times.
Our purpose and passion are genuine. We believe in You. Contact us, or go ahead and make an appointment today to a clearer economic path.
Consider an outside bookkeeper/accountant in the same way as you would a longtime friend, as a source of reliable information and advice, but in relation to your business finances, they have specialized experience and focus.
The business scope of an accountant does not end with tax preparation; they can and should be a business partner throughout the year bringing their knowledge and perspective into your industry to help improve your bottom line and navigate through an uncertain economy.
Here are many reasons why all entrepreneurs should work with an outside bookkeeper/accountant:
- Focus on the reason why you started your business. Entrepreneurs are very passionate, so why get bogged down with tasks that do not help to achieve their passions? On the other hand, a bookkeeper/accountant is inspired to take on the heavy lifting of the tedious money details of your business.
- Achieve work/life balance. You might be asking “What is that?” Many business owners might ask. In spite of how new or well established a business is, owners across the board are struggling to find the right balance between work and life. And this goes back to point 1; performing functions that you are less enthusiastic about handling, which allows you to sell, market and grow during the day and take your child to soccer practice at night.
- Represent your business professionally. Your bookkeeper/accountant and you represent your company in the best possible way. Companies that use such an external resource report that the service is vital to their success. In a recent study conducted by accounting experts among U.S. business owners, 89% of respondents stated that this is an essential element of their success.
- An Outside Accountant can introduce a new perspective. Most times entrepreneurs are so buried in the daily operations of their business that they might not be able to see the complete picture. Relying on your bookkeeper/accountant in this way allows you to take a step back, look at the wider picture and thus a fresh perspective. Who knows, you may come up with the next big idea the world has been waiting to hear.
Continuing the Pursuit of Independence
Today, July 4th, many entrepreneurs will be going to the celebrations of fireworks and barbecue with their families to celebrate Independence Day. Others might sneak some pieces of work between the parties, but mostly three-quarters of them (72 percent) agree on one thing: having their own business gives them greater freedom and independence than to work for someone else, which makes each day independence for them.
Being a business owner is not an easy role. Once a challenge is successfully resolved another takes its place. In working with small independent business owners, I have learned that would not give it up. The desire for continued independence is as strong in them as in the early settlers who declared their intent by the Declaration of Independence.
Could your business survive without the assistance of an external professional? Perhaps, but the insight, guidance, and expertise shared could be just the catalyst for making your business thrive. Pursue Your Independence with MJB’s Bookkeeping Solutions and receive the gifts of time, business accountability, perspective, with less stress. Contact Us.
Wishing all my readers a Safe, and Happy 4th of July Independence Day Celebration.
OK, now breathe! That’s it, take a deep breath in and slowly release it… tax day is over, spring is in the air and summer is just around the corner. LIFE IS GOOD!
That is until you take a good look at the mess around your computer… the strewn trash piles along with the old financial records and leftover coffee cups and who knows how long that box of chow mein noodles has been siting there… right?!
But remember, it’s SPRING and what better time than to get started on a bit of spring cleaning? I’m not just talking about cleaning up from your deadline with the IRS or cleaning out the closets and under your bed, I’m talking about your financial spring cleaning.
Listed below are suggestions for cleaning up your finances:
- Check Your Credit Score – Is there any incorrect or misleading information about you that could hurt your score? What can you do to improve your score?
- Organize and/or Shred Old Financial Documents – Clean up your files and shred any old or no longer needed information.
- Re-balance and Diversify Your Investment and Retirement Accounts – How are your investments doing? Are you on tract with your retirement goals?
- Review Your Insurance Coverage – has there been any life event changes? Do you need any additional coverage or is any coverage obsolete?
- Review Your Expenses and shop for better rates – Can you pay less if you switching to a different company? Are you using what you paid for like that gym membership?
- Set up Automatic Bill Pay – Late fees undermine your financial goals, therefore put regular payments on automatic bill pay so this doesn’t happen.
- Save without Thinking – How is your emergency fund? Are you saving enough each month?
- Revisit Your Budget – Once you have reviewed your finances ensure that the new numbers are worked into your budget.
- Record Your Financial Passwords and Store Records in a Safe Place – Or better yet, use a trusted online password storage system and be sure to use a different password for each of your financial sites changing the password on a quarterly bases.
Knowing where you stand with your finances will better enable you to make wise and prudent money choices. If you need some help getting started, Contact MJB’s Bookkeeping Solutions, or Make an Appointment for a 1-Hour no Obligation Consultation.
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.
- Review Balance Sheet and Income Statements (P &) at least quarterly if not more.
- Reconcile Bank accounts monthly.
- Bank at more than one financial institution to develop a relationship that may help you when you need a loan.
- Hire a Bookkeeper to help you part time so you can focus on growing your business.
MJB’s Bookkeeping Solutions assists businesses and individuals with their accounting needs. Services include but are not limited to installation, setting up chart of accounts, training, and troubleshooting problems. We understand the challenges of owning a business, and are ready to connect you to the answer for all your business questions.
Contact us at 805-764-1MJB or 502-309-9MJB, follow us on Twitter and Like Us on Facebook.
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.