December 2020

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.