Author name: wpx_@bacus4u

Did you know that more than 40% of small businesses make mistakes on their payroll every year? ❌ AND – that the average fine for those mistakes is a whopping $850?? 😰 That’s just one example of how bookkeeping mistakes can hurt your bottom line. 💰 And don’t get us started on all the other ways, too, like: 💰 Overdraft fees 💰 Fines for late tax filing and missed deadlines 💰 Unclaimed tax-deductible expenses 💰 And lots more! The good news? All are TOTALLY avoidable with some basic bookkeeping ❤

They say that a good recipe starts with great fresh ingredients, right? 📊 Well, it’s the same with your business – if you want to create solid profit-making strategies, you need to start with clean up-to-date data. And one of those essential data “ingredients” is your business expenses. Think about it this way: You wouldn’t make burgers for your family with expired meat and moldy buns, right? Your business deserves better than moldy old data, too! So, here’s 3 tips to help you manage your expenses in a “fresh” way that leads to more profitable strategies:
Tip #𝟭 – 𝗕𝗲 𝗖𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁. Two of the fastest ways to muddy a financial report is (1) duplicate expense accounts and (2) inconsistent categorization. Think about it – how can you track your expense patterns over time if you pick (or create!) a different expense category every month for your car insurance payment?

𝗪𝗵𝗮𝘁 𝗶𝗳 𝗶𝘁 𝗱𝗶𝗱𝗻’𝘁 𝗵𝗮𝘃𝗲 𝘁𝗼 𝗯𝗲 𝘀𝗼 𝗵𝗮𝗿𝗱? ❤️ Seriously – take a second to imagine what it would be like if your business finances weren’t so hard … or even – dare say! – easy: 🤩 𝗪𝗛𝗔𝗧 𝗜𝗙 tax season was a 𝘀𝗺𝗼𝗼𝘁𝗵 𝗮𝗻𝗱 𝗲𝗮𝘀𝘆 process you finished early – and barely had to think about? 😍 𝗪𝗛𝗔𝗧 𝗜𝗙 checking your business bank account (and the new client deposits!) was a 𝗾𝘂𝗶𝗰𝗸 (𝗮𝗻𝗱 𝗳𝘂𝗻!) part of your daily routine? 🥳 𝗪𝗛𝗔𝗧 𝗜𝗙 you were 𝗲𝘅𝗰𝗶𝘁𝗲𝗱 to get your financial reports, and knew exactly how to turn them into 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗹𝗲 business strategies? … Probably sounds too good to be true, right? Let us guess: You probably think that during tax season it’s totally normal: 🤯 𝗡𝗼𝗿𝗺𝗮𝗹 … to be in a constant state of 𝗽𝗮𝗻𝗶𝗰 during tax season 🤮 𝗡𝗼𝗿𝗺𝗮𝗹 … to 𝗱𝗿𝗲𝗮𝗱 checking your business bank account 😰 𝗡𝗼𝗿𝗺𝗮𝗹 … to 𝗮𝘃𝗼𝗶𝗱 financial reports (because why bother? They’re always 𝗼𝘂𝘁𝗱𝗮𝘁𝗲𝗱 and 𝘂𝗻𝗿𝗲𝗮𝗱𝗮𝗯𝗹𝗲 anyways … )

Ever wish you had a crystal ball when it came to the future of your business’ finances? Something to answer questions like:
“Can I afford to hire 2 part-time employees during my busy season this spring?”, or “When will I have enough money to pull the trigger on that expensive new piece of equipment?” Now, we don’t exactly have a crystal ball – but we do have the next best thing: 𝙲𝚊𝚜𝚑 𝙵𝚕𝚘𝚠 𝙵𝚘𝚛𝚎𝚌𝚊𝚜𝚝𝚒𝚗𝚐 𝗪𝗛𝗔𝗧 𝗜𝗦 𝗜𝗧? Cash flow forecasting is a way of using your past and current financial history to estimate your future cash flow in your business.

Do you struggle with picking good price points in your business? You know what I mean – coming up with a price for your services or products that you know will *actually* be profitable?? 😬 If that sounds like you, then it’s time to get to know the fixed and variable expenses in your business – and then use a super simple breakeven formula 🤓 🤔 𝗦𝗼 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 “𝗳𝗶𝘅𝗲𝗱 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀”? These are your “overhead costs”, and they don’t change much from month to month. You pay roughly the same amount, no matter how much (or little!) business you do. Some examples of fixed expenses are: 🏢 Rent or lease of office space 👩🏻‍💻 Website hosting fees 👔 Employee salaries 🤔 𝗔𝗻𝗱 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 “𝘃𝗮𝗿𝗶𝗮𝗯𝗹𝗲 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀”? These are expenses that are directly tied to your volume of production and/or sales. Therefore, the total amount of these expenses changes depending on your volume.

Are you thinking about applying for a loan for your business? 💰 If you are, there are a few things you’ll have to do before calling up your bank, such as: 📄 Gathering up your financial + legal documents 💳 Checking (and maybe improving) your credit score 🗺️ And even writing up a detailed business plan. Know what else you got to do? Get your business bookkeeping up to date and in order 😬 Here’s why: 📊 LOAN AMOUNT: Without up-to-date finances, you can’t know exactly how much you need (or what monthly payments you can afford!) 📊 REPAYMENT AMOUNT: Not only that, but you’ll also have to prove to the bank that you can actually AFFORD that monthly repayment amount

“So do I need to worry about collecting & filing sales tax for my business? 🤔 And if so – what percentage or amount do I need to charge?” Hoo boy – this is actually a surprisingly complicated question 😬 Here’s why: 𝗘𝗮𝗰𝗵 𝘀𝘁𝗮𝘁𝗲 𝗶𝘀 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 There is no universal federal sales tax rate – sales tax is determined by each individual state, therefore the rules and rates and filing frequencies differ from state to state. And it’s not just state taxes – there are also local taxes (like county and city) to factor in as well. 🗺️ 𝗔𝗹𝗹 𝗽𝗵𝘆𝘀𝗶𝗰𝗮𝗹 𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗿𝗲 𝗮 𝗳𝗮𝗰𝘁𝗼𝗿. What if your business is located in Ohio, but you have a warehouse located in Pennsylvania? Or a salesman located in Illinois? Did you travel to Kentucky to sell your goods at a weekend convention? That all has an effect, too. (And don’t get me started on the confusions and complications of drop-shipping and Amazon Fulfilment)

Everyone knows about the big bad tax date, April 15th, right? … But what about all the other “little” tax deadlines in between, like the estimated tax payments due every quarter? In case you aren’t sure about this whole quarterly tax thing, here’s a quick rundown (and a good article below with more info!) 𝗪𝗵𝗮𝘁 𝗲𝘅𝗮𝗰𝘁𝗹𝘆 𝗮𝗿𝗲 “𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗲𝗱 𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝗹𝘆 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀”? Every quarter, you need to make a tax payment based on your estimated income for the year. This includes taxes like income tax, Social Security tax, Medicare tax, and more (if applicable) If you were a W2 employee working for a company, these taxes would automatically be taken out of each paycheck. However, since you and I are self-employed business owners and freelancers, we have a different process for paying these taxes. 𝗗𝗼 𝘁𝗵𝗲𝘆 𝗮𝗽𝗽𝗹𝘆 𝘁𝗼 𝗺𝗲 𝗮𝗻𝗱 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀? Probably – although it doesn’t have the exact same effect on every business. However, if you made more than $400 this year through your business, you’ll need to file and pay something. (Keep in mind – there are penalties for late filings!)

Are your clients a little (or a lot) slow when it comes to paying their invoices? 😬 While you can’t pull out their credit card for them, there’s some things you can do in your invoicing process to increase your chances of getting paid – and even increase the speed of the payment! Here are 5 simple tips on how to do it: (𝟭) 𝗠𝗔𝗞𝗘 𝗬𝗢𝗨𝗥 𝗜𝗡𝗩𝗢𝗜𝗖𝗘 𝗧𝗘𝗥𝗠𝗦 𝗘𝗔𝗦𝗬 𝗧𝗢 𝗨𝗡𝗗𝗘𝗥𝗦𝗧𝗔𝗡𝗗. You may know that putting “CIA” on your invoices means “cash in advance” … but your client may read that and think “… Central Intelligence Agency…??” Make sure your terms – both for payment period AND late fees! – are (literally) spelled out on every invoice. (𝟮) 𝗦𝗛𝗢𝗥𝗧𝗘𝗡 𝗬𝗢𝗨𝗥 𝗣𝗔𝗬𝗠𝗘𝗡𝗧 𝗣𝗘𝗥𝗜𝗢𝗗. Stats show that if you give more clients more time to pay – like 30 or 90 days – they’ll take it! So, logically, if you ask for payment sooner, you’ll receive payment faster.

Monitoring Expenses 

Did you know that good bookkeeping can help you both make – and save – money? 

It’s true! And here’s 4 of my favorite profit-increasing bookkeeping tips you can start using today:

(𝟭) 𝗔𝗨𝗗𝗜𝗧 𝗬𝗢𝗨𝗥 𝗘𝗫𝗣𝗘𝗡𝗦𝗘𝗦

Expenses billed as subscriptions are especially sneaky!

Take a minute to 𝗿𝘂𝗻 𝗮𝗻 𝗮𝗰𝗰𝗼𝘂𝗻𝘁𝘀 𝗽𝗮𝘆𝗮𝗯𝗹𝗲 𝗿𝗲𝗽𝗼𝗿𝘁 spanning the last 3-6 months.  Then cancel anything you aren’t using anymore (or downgrade to a cheaper and more limited version).  You could save hundreds – or thousands! – a year.

(Btw – did you know there are apps that help you track recurring expenses, and even cancel them on your behalf?? I attached an article in the comments with links to a few apps like this!)

Track and Manage Subscriptions With These Apps | Saving and Budgeting | US News

(𝟮) 𝗥𝗨𝗡 𝗔𝗡 𝗔𝗖𝗖𝗢𝗨𝗡𝗧𝗦 𝗥𝗘𝗖𝗘𝗜𝗩𝗔𝗕𝗟𝗘 𝗥𝗘𝗣𝗢𝗥𝗧

How many clients do you currently have? 5? 50? And how many invoices do you send every month? Here’s my point – it’s hard to stay on top of past due invoices AND keep up with the rest of your business.