Financials – I promise to make this as pain free as possible!
I know some of you haven’t made it past the title of this blog. ICKY! Numbers, accounting, books, and lots of other SCARY words! This is one of the most challenging areas for ANY business owner, unless you just love accounting and bookkeeping. It is also one of the most important. Bookkeeping helps you decide if you have made money, lost money or have broken even. It affects your taxes, helps you make business decisions and hopefully, helps you determine what profit you have made from your work.
If you made it past the above paragraph, Thank You. I will not go into the nitty-gritty details on keeping fiscal records. There are plenty of resources available for that. If you absolutely refuse to do it, get a bookkeeper/tax preparer/accountant!!!
What I want to talk about is how to use some of these figures in your business.
At the end of the year, the goal is to have more money in your account. This means you spent less than you made. I know that is basic, but there it is.
If you have less money than you started with, your accountant will help you stop the leak. You will need to review what you made, what you spent and determine where the money is going, so you can made decisions about your future plan of action. There are times when making less money on paper is good. One way that can be done is at the end of the year you purchase more inventory with any profit from the company. It is a business expense, but now you have product to sell. That works with companies that encourage you to hold inventory.
Another nice thing about looking at your books is seeing which month or months were your highest producing and determine what you did that month. Figure out what actions helped make it a highly productive time and maybe you can repeat those actions in the future to produce another great sales period. Did company contests helped push your production up? If a cruise was the prize did you go all out to create sales to win?
When you know what incentives you respond well to, you can structure your own incentives. Keeping yourself motivated is your job, but that does not mean it cannot be FUN!
I suggest whenever possible, that businesses use a qualified tax preparer. Do some checking into good preparers, interview the prospects and ask what services they offer. Most of the time you will find that using a qualified tax preparer will insure more accuracy, the most deductions and give you a peace of mind that your taxes are done correctly. Other people in your business can make recommendations, your local chamber of commerce can give you recommendations, or check with other business owners you know for who they use and recommend.
Arla DeField, CBC, is also a Certified NxLevel Facilitator, and teaches an Entrepreneurial Business Course with the SBDC and the local Greater Spokane Valley Chamber of Commerce. Arla has worked as an owner and executive of several businesses, and is now using her experiences to coach entrepreneurs in the development and execution of their business plans. If you want to get started or propel your business to the next level, contact Arla through her website, www.yourcustombusinessplan.com or write arla@yourcustombusinessplan.com.
