Insights

If you read our FB posts the last couple of weeks, you will know that we have talked about being prepared for your taxes. AND how some businesses’ taxes will need to be done by 03/15 instead of 04/15 depending on their structure.  

Here are the questions we shared: 

WHAT IS YOUR BUSINESS STRUCTURE? 

LLC? S-Corp?  Something else?  This will affect when you file your taxes, and what kind of tax documents you’ll need to file.

DO YOU HAVE ALL OF YOUR TAX DOCUMENTS FOR 2020 IN ONE PLACE? 

You will need to gather everything from your bank statements to your receipts to your previous year’s return.  It’s a lot to round up – and some of the older receipts and bank statements can take days (or weeks) to track down.

IS YOUR BUSINESS BOOKKEEPING CURRENT?

Without this, you won’t know what numbers to write in the little boxes on your tax form.  And getting current could take a long time to accomplish. Are you only 6 weeks behind?  That’s manageable.  6 MONTHS? Well … let’s just say you’ve got some work to do. 

In case your answers for all of these started with “I don’t know” and now you’re hyperventilating into a brown paper bag – no worries!  We help our clients with these every year, all year round – and we’d love to help you, too. Just schedule a free consultation by calling 352-432-8104 today!

Did your blood pressure spike just by reading that date? 

For many business owners, April 15th is associated with guilt, panic, and stress.

But what if didn’t have to be?  What if April 15th was just another Thursday, no sweat?

What if your business’ financial records were completely ready and sent to your CPA before January even ended?

What if your accountant filed your 2020 taxes in January – and you received a tax refund by Valentine’s Day?

Or, even if you received a tax bill, what if you already had more than enough money easily set aside to pay it because you knew what amount to budget for all year? 

Then guess what?  By the time April 15th came around, you wouldn’t even notice.  It’d just be another Thursday.

We want to help make Tax Day just another boring Thursday for you – and as a bookkeeper for small businesses, just like yours, that’s exactly what we do every day.

Here’s how Abacus can help you make those “what ifs?” a reality before this April 15th:

First, we’ll get on the phone and evaluate where your business is at, and create a plan together for getting your finances current and tax-ready

Then, we’ll work together through a clear checklist to make sure I have all the financial documents, log-ins, and access we need to get started (and get this off your plate)

And then you can sit back, relax, and stop worrying about April 15th!  By the time that date rolls around, your taxes will already be filed by your CPA – and it’ll just be another Thursday

If your business is doing the mingle jingle, it’s time to STOP! You know, co-mingling funds…. EEK! 

Everyone knows (or at least SHOULD know) that you need a separate bank account for your business finances.

But do you know how to pick a bank that will be a good fit for your unique business needs?

If you’re not sure which questions to ask, or how to weigh and compare bank features, then this link should help – it’s a list of questions I recently came across on a Quickbooks blog that acts as a checklist. 

https://quickbooks.intuit.com/blog/accountant-advice/not-all-banks-are-created-equal-how-to-choose-a-bank-in-2020/

Questions like:

Does this bank offer a particular account type (such as minimum balance required, numbers of transactions, etc) that fits the needs of your business and typical cash flow?

Does the bank website sync and download data easily into your current financial software? … Or is the process a tedious and manual task that requires a lot of time?

Does this bank have a good smartphone app and an easy-to-use website?  Or will it be hard for you to log in and get the financial information that you’ll need?

There are lots of other questions in the blog, too, that’ll really help you to choose the perfect bank for the long haul in your business.

Ever wish your bookkeeping + financial software was more like Siri? Especially for your business finance questions? 

Like, “Hey Siri – how can I reduce my business expenses?”, or, “Hey Siri – how can I increase my business’ profit margin?”

Here’s the good news – as long as your bookkeeping data is up to date, your financial reports can act as a “Siri” for your business finances. All you have to know is where to look!

Here’s a couple of examples:

“Hey, Siri – how can I reduce my business expenses?”

️ Go into your reports, select “Transaction Detail by Account”, customize the report to only show expenses, and set the report period for the last 3-6 months. Review the list for recurring expenses – cancel the ones you no longer need or downgrade to cheaper subscriptions if you use them infrequently! 

“Hey, Siri – which of my products or services should I focus my marketing efforts on?”

️ Go into your reports, select “Profit and Loss”, and set the report period.  To make it easier, in Quickbooks you can set “Compare another period” to more easily see the growth and differences.  Look at the items under “income” – as long as your different revenue streams have already been categorized into sub-items of income, you’ll easily see which ones are generating the most revenue and are most worthy of your marketing efforts!

Sometimes you just gotta write it off…..

Did you know that 16% of invoices don’t get paid?

Think about it – you get paid for 8 invoices in a row, no sweat.  But when you send out that 9th or 10th invoice … the client just doesn’t pay!

And not only are you left in the lurch, you’ve now got this annoying unresolved transaction in your financial records.  

So what do you do with that irritating open invoice?  Should you delete it?  Void it??  How do you handle something like that?

Honestly, it takes a little work to track it correctly; however, if your business accounting is accrual style, you may be able to write off that bad debt as a tax deduction!

If you’re using Quickbooks, check out this helpful step-by-step article from Intuit to help you get started.

If you’re still DIYing your bookkeeping, it’ll help walk you through the necessary processes, such as:

Running an aging AR report

Creating an expense account, and item, for bad debts

How to make and apply a credit memo

And, finally, how to run a report that shows your bad debts

Check-up Time….

Do you know if your business finances are ready for the end of the year?

Follow up question: do you even know what exactly you need to do in order to … well, BE ready for the end of the year?

You may not know what exactly you need to do to finish your 2020 finances, right?

You’re in good company… 40% of business owners say that bookkeeping is the WORST part of owning their business.

… which then makes it the easiest part of your business to procrastinate on.  

(And the most terrifying part to deal with after it’s all piled-up at the end of the year!)

There’s a lot of things you need to do before we hit 2021, such as:

Reconciling all your bank and credit card statements for 2020

Collect on (or record received payment) for past due invoices

Gather up all of your receipts for the year

Double-check for and pay vendor bills that still need paid

And more!

I know, it sounds overwhelming, but Quickbooks has a great checklist at this link that will go a long way to helping you get started.

The Chart of Accounts (ie. COA) is so important to have good financial reports and to have the specific data that you need to make good business decisions. 

For instance, if you have a COA, and you have only one account called Utilities, that may work for some businesses. But other businesses may want to know how much they spend on phone bills so they can ship around and reduce their bill. OR a different company may need to know how much their electric bill fluctuates from one season to another. 

A better example of this might be COGS (cost of goods sold) where a business may want to know how much they spent on one particular product than another so they can calculate their profit for a particular product. 

So let’s jump into a brief lesson on the COA! 

WHAT IT IS

In simple terms, your chart of accounts is the list of categories and subcategories used to organize, identify + track the money moving in and out of your business

WHY IT MATTERS

If the list is cluttered and full of duplicates and errors (or just simply doesn’t fit your business model), your reports will be confusing, incorrect, and unhelpful

If it’s clean and well-organized, it’ll help produce clear reports that will help you make strategic changes – like show you exactly where you’re overspending, or which of your revenue streams are the strongest

Do you understand what a Profit + Loss statement is, and why it’s SO important for your business?

We mean – REALLY understand? 

If not, here’s a quick rundown of why it matters, how to use it, and a helpful link if you want to read more about it. (which we encourage you to do!) 

First, let’s talk about WHY it is so important to create an accurate (and helpful) P+L report:

Up-to-date bookkeeping data in your financial software

Income and expenses correctly categorized  

Accurate separation between COGS and company expenses

Remember, your report will only be as good as the data you put in (garbage in, garbage out!) so make sure your data is right before you run the report.

Once you get it all right, here are the benefits of an accurate P+L. You may be : 

Craft accurate business strategies from real data, instead of just guessing at next steps

Set your business up for any financing and borrowing needs you may have in the future

Get you a crystal-clear view of your profit margin on the bottom line

See your expenses in detail – and easily figure out what you cut out to reduce your expenses

Do you understand what a Profit + Loss statement is, and why it’s SO important for your business?

We mean – REALLY understand? 

If not, here’s a quick rundown of why it matters, how to use it, and a helpful link if you want to read more about it. (which we encourage you to do!) 

First, let’s talk about WHY it is so important to create an accurate (and helpful) P+L report:

Up-to-date bookkeeping data in your financial software

Income and expenses correctly categorized  

Accurate separation between COGS and company expenses

Remember, your report will only be as good as the data you put in (garbage in, garbage out!) so make sure your data is right before you run the report.

Once you get it all right, here are the benefits of an accurate P+L. You may be : 

Craft accurate business strategies from real data, instead of just guessing at next steps

Set your business up for any financing and borrowing needs you may have in the future

Get you a crystal-clear view of your profit margin on the bottom line

See your expenses in detail – and easily figure out what you cut out to reduce your expenses

Want to learn a simple (and free!) strategy that will help make it WAY more likely for you to achieve your business goals?

It’s true – We just read a survey that 50% of small businesses who did this in 2018 hit their goals for their 1st and 2nd quarters! 

Any guesses on what this one thing could be? 

It’s … BUDGETING.

We know – as an entrepreneur, having a budget sounds boring, restrictive, and perhaps even overwhelming.  

But if you’re serious about growing your business, this “boring” tool packs quite a punch:

You’ll be prepared for – not surprised by – seasonal slow-downs

Keep your business expenses lean and low, simply by reviewing – and trimming them – every month

And jump FAST on new business opportunities because you always know your available funds

That’s just the tip of the iceberg.