Month: October 2020

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.

“Let’s talk about your business financial reports…”

… Not exactly an exciting sentence, right? 

But you may be surprised at all the great information hiding in those long columns of dates, dollar amounts and invoice numbers.

For example, did you know that your financial reports can give you hints on how to improve your profit margins?

Or that they can help save you from negative bank balances and overdraft fees?

If your bookkeeping is up to date, and you know how to read your reports, you can learn SO much that will both protect AND grow your business!

Now you’re probably SUPER excited and running right to the “Reports” tab in your financial software, right?

Probably not.  Maybe it is just financial nerds like us that get that excited about this stuff, but when you do get ready to check out your financials– don’t get overwhelmed! 

There are dozens of possible reports you can run, but you only need to focus on three to get started:

Income Statement (also called a P+L or Profit & Loss Statement)

Balance Sheet

Cash Flow Report

These 3 are so important, that they’re actually nicknamed “the holy trinity” in accounting!

“Why do I need a bookkeeper?  I’ve already got a QuickBooks subscription – that’s enough, right?”

That’s a fair question.

And the answer is?

“NO – QuickBooks alone is not enough.  You, and your business, need a great bookkeeper!”

We know you think an accounting business is biased, but it’s really true!  Here’s a couple of things QuickBooks will fall short on, without a good human bookkeeper managing it correctly:

1.QUICKBOOKS IS ONLY AS GOOD AS ITS USER

Every hear the phrase “Garbage in, garbage out?” QuickBooks has some amazing automations … but QuickBooks is still just a tool, not a fact checker.  It will organize or automate your info any way you tell it to … but it won’t alert you if it’s correct or not.  This could quickly lead to compounded mistakes over time, with expensive consequences in tax payments (and corrective forensic accounting later).

“Why do I need a bookkeeper?  I’ve already got a QuickBooks subscription – that’s enough, right?”

That’s a fair question.

And the answer is?

“NO – QuickBooks alone is not enough.  You, and your business, need a great bookkeeper!”

We know you think an accounting business is biased, but it’s really true!  Here’s a couple of things QuickBooks will fall short on, without a good human bookkeeper managing it correctly:

1.QUICKBOOKS IS ONLY AS GOOD AS ITS USER

Every hear the phrase “Garbage in, garbage out?” QuickBooks has some amazing automations … but QuickBooks is still just a tool, not a fact checker.  It will organize or automate your info any way you tell it to … but it won’t alert you if it’s correct or not.  This could quickly lead to compounded mistakes over time, with expensive consequences in tax payments (and corrective forensic accounting later).