One of the most asked questions I receive is how to wrap your head around all of the bookkeeping stuff. It’s the most overwhelming and daunting task for most business owners and yet, it’s not indicative of how good (or bad) you are with money. Bookkeeping doesn’t have to do anything with math if you use a digital program and can become a very easy task once you flex your bookkeeping muscle and put it into practice. I’m giving you some actionable tips today to tackle bookkeeping head on and master your skills!  Get ready to flex your bookkeeping muscle! What we’re talking about Master Your Bookkeeping Skills With Step Zero How To Build Your Bookkeeping Skills Knowing When To Get Outside Help Master Your Bookkeeping Skills With Step Zero In order to master your bookkeeping skills, I suggest you start with step zero - making a list of what you’re having a hard time doing. Start by getting more organized and figuring out your first step. The more clear you get on what you don’t know, the easier it will be to create a path to get there.  Create a list of knowledge gaps, but recognize that it’s ok not to know it all. Don’t judge yourself. Figure out what you should work on first and base it on priority. The priority should be starting with what the first thing you could learn that will help you put in perspective the rest of the things on your list.  How To Build Your Bookkeeping Skills Imagine the skill of bookkeeping as a ladder, but instead of the rungs being a foot apart, they’re only an inch or centimeter apart and you’re able to move slowly up it. Focus on learning one skill at a time and start with what will make every step along the way easier.  Once you learn a new skill, record the process so that you can remember it and implement more with future skills.  Your first skill should be to record your income and expenses. This will be the first part of your skillset because it does the pre-work for the next knowledge gap you will fill. Keep in mind that you won’t perfect this skill right away, but with time and practice, you’ll gain confidence and the skill will become routine and easeful.  Knowing When To Get Outside Help If there’s something you can’t learn on your own, know that there are resources available. You can start with a Google search, find a bookkeeper or have someone do file reviews for you. They will share with you what you don’t know. Prepare yourself to need more support in the beginning because it will be easier as you learn new skills. Flex your bookkeeping knowledge and exercise it. You won’t learn what you need to learn if you aren’t engaged and doing it.  Are you ready to flex your bookkeeping muscle? LINKS MENTIONED Essential Bookkeeping Tasks for Your Business  https://andismiles.com/essentialtasks  The Complete Guide to Bookkeeping for Small Business Owners https://andismiles.com/2018/07/30/the-complete-guide-to-small-business-bookkeeping-for-small-business-owners/  6 Bookkeeping Mistakes that are Screwing Up Your Finances https://andismiles.com/2018/08/06/6-bookkeeping-mistakes-that-are-screwing-up-your-finances/  How to Track Your Business Income Correctly https://andismiles.com/2018/11/19/how-to-track-your-business-income-correctly/ 

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How the heck do you wrap your head around the bookkeeping stuff?

Staying motivated as an entrepreneur and business owner can be hard, but staying motivated when it comes to your finances can be even more difficult.  Today we are talking about how to stay on top of your business finances and stay motivated. Discover how knowing your numbers will increase your comfort level and make the task of doing your numbers will come with ease and comfort. I’m sharing some tips and tricks on how you can also avoid falling back into the pattern of avoiding the business financial stuff too! It’s time to get motivated and enjoy doing your business finances! What we’re talking about How To Stay On Top Of Your Business Finances Taking A Proactive Stance With Your Business Finances Creating An Accountability System To Stay On Track How To Stay On Top Of Your Business Finances In order to stay on top of your business finances, you need to take the first step in figuring out what motivates you AND works for you. The obvious answer would be regularity. The more you do it, the easier it gets. Regularity is how you feel emotionally around the task of your business finances and with it comes a sense of ease.  One reason people aren’t motivated to deal with their business finances is because it can be overwhelming. It can become so overwhelming that business owners and entrepreneurs might question their career choice because of the time it takes to handle their finances.  With an increase in ease there will also be more openness and willingness to take care of the tasks you need to complete. Regularity is the key!  Taking A Proactive Stance With Your Business Finances One of the best ways to create ease when it comes to your business finances is to set up a system for your numbers. Utilize a template that will create a profit and loss report for you. By looking at your numbers, you will build the skills to analyze your numbers which will allow you to go from looking, observing and asking questions, to knowing the questions to ask before looking at your numbers. This is taking a proactive stance because you really understand what’s going on with your business finances.  Creating An Accountability System To Stay On Track Now that you have a better grasp on how to stay motivated when it comes to your business finances, let’s talk about how you can stay motivated. You should understand what triggers your pattern of avoidance, but don’t make it a shame game or get down on yourself. Explore this with curiosity and compassion because knowing the trigger of the pattern is ultimately more important than knowing the actual pattern.  Set yourself up for success by picking the best day that works for you to review your numbers. Experiment with it to see what is the best and understand your behaviors enough to be able to stop them before they start.  Create accountability. You can hold yourself accountable (internal accountability) and even reward yourself with something external, such as a glass of wine. You are the person holding yourself accountable. You could alternatively opt for an external accountability option in which someone else holds you accountable. This outside person could be someone you pay, a business friend, a regular friend, or a group. The key in external accountability is to declare your intentions and follow up to ensure you are held accountable.  Examples to set up for success. Pick the day that works best for you. Be willing to experiment. Understand your behaviors enough to be able to stop them before they start. Identify the type of accountability that works for you. Are you ready to hold yourself accountable for staying motivated in your business finances? LINKS MENTIONED Free Profit & Loss Template + Bookkeeping Spreadsheet  www.andismiles.com/survivalkit    Episode #27 What are the top 5 things business owners should be tracking? https://andismiles.com/podcasts/e27/  Episode #22 How do you overcome procrastination with your business finances? https://andismiles.com/podcasts/e22/  Episode #19: What reports do I need to look at for my business? https://andismiles.com/podcasts/e19/ 

How do you keep yourself motivated with your business finances?

As a business owner, one thing we all have to deal with is how to collect money from clients for our products and services. Today we are discussing how you to deal with collecting money from clients, otherwise known as collections or accounts receivable or A/R. We’re going to start with how to create expectations from the very start with your clients to defining your payment terms and what to do if a client ends up not paying you at all. I’m covering what forms of communication you can utilize and how long you should wait, along with how kindness can go a long way. Let’s collect your money! What we’re talking about  Creating Expectations For Your Clients Defining Your Payment Terms What Do You Do If A Client Doesn’t Pay On Time? Creating Expectations For Your Clients Creating expectations for your clients on your payment terms should start well before your first invoice is sent to them. You should set up the parameters and boundaries in your initial call, your contract and your onboarding emails, so that your client is informed and fully understands your payment expectations. You can share your payment terms during your onboarding call, your discovery call, within your workflow and in your contract. In addition to the payment terms, you should inform your client as to what your billing process is. How often will you bill? When will you bill? How long will they have to pay your invoice? Define your payment terms or how long they have to pay you from when they receive your invoice.  Defining Your Payment Terms One of the biggest parts of collecting money from your clients is defining what your payment terms are. They can vary from due on receipt which means the invoice is due as soon as it is received or you could offer payment terms of 7 days, 14 days, 30 days or more. Keep in mind that if you work with large corporate clients, they might need 30 day terms due to the size of their accounting department and internal processes.  When defining your payment terms, consider your own cash flow and when you need money to come in. If all of your payment terms are 30-60 days, remember that is how long you will have to wait to be paid for your services and in some cases, even longer if a client is late.  In addition to payment terms, define your billing process. When will you bill your client: before, midway, after or a combination of when the work is done? What Do You Do If A Client Doesn’t Pay On Time? You’ve defined your payment terms, sent your invoice and the due date is quickly approaching, but your client hasn’t sent you a payment. What is the consequence if they go past the due date and don’t pay you according to the terms? Most often, business owners apply a late payment fee which can be a flat fee or a percentage of the invoice. There is also such a thing as a rolling late fee in which a percentage is charged after being so many days late and accrues as the days continue. The late fee is meant to be a deterrent from paying late, not to be a money making scheme for you.  As a courtesy to clients, send them a reminder a day or two before the invoice is due and reiterate what the late payment policy is. Once the invoice is overdue and the late policy has been applied, send them another reminder restating the late policy to ensure that your client is aware of what’s going on. You can reset the deadline but the next due date should be a shorter time frame than your original deadline.  If you still don’t receive payment, then escalate things with a phone call, but show concern that all is ok with them and their business. Come at this entire process with kindness.  If payment is never received then you can either come to terms with the fact that you’ll never receive payment and let it go. You can use a private collections agency, but remember that they will take a fee of whatever they collect on your behalf, therefore you’ll never receive full payment. Collections can do damage to your client’s credit and your relationship will most likely be lost. The last option and the last resort you have is to sue your client. If you take legal action, decide if it’s worth it to you. Have you defined your payment and collection terms? LINKS MENTIONED How to Get Your Clients to Pay You On Time https://andismiles.com/2017/12/11/get-clients-to-pay-you/  How to Set Up A Killer Invoicing System So You Always Get Paid https://andismiles.com/2016/11/21/killer-invoicing-system/  Suing for Non-Payment of Services  https://www.freshbooks.com/hub/payments/suing-non-payment-of-services

How do you deal with collecting money from clients?

As a business owner you are bound to have unexpected expenses come up at some point, but are you ready for it? How do you prepare for unexpected business costs? These costs could be big or small and being prepared to take any kind of financial hit is something that we want to prepare for as best we can. We’re going to discuss how you can ensure you’re not only prepared for costs throughout the year, but how to save for the rainy day that could pop up.  It’s time to prepare for the unexpected!  What we’re talking about Foreseeing Unexpected Costs What Costs Will Impact You? Pre-Thinking About Your Solution The Importance of Building A Savings Foreseeing Unexpected Costs One of the best ways to prepare for unexpected costs is to foresee them coming. If you thought I was going to say save, then I’m sure you’re surprised by my strategy. Although saving is great and should be a part of your business, if you can’t save right now, then foreseeing expenses is going to be your starting point.  Make a list of all of your annual, bi-annual and every 2 year expenses. If you are using an bookkeeping software, then enter these expenses into your system and do so in advance of when the payment will be due. This will give you cushion room because you know these expenses are upcoming. You will be able to see the impact on your bank balance and utilize this as a cash flow tool.  What Costs Will Impact You? The next way to prepare for unexpected expenses is deciding on what expenses would actually impact you. Create a list of all kinds of expenses, both big and small from a phone charger to a new laptop. Decide what your cost threshold will be. What kind of costs will make you feel stressed or unprepared? Identify these costs and the type of expenses that could come out of them, then decide which expenses would actually be necessary for you to run your business.  Pre-Thinking About Your Solution The last step to preparing for the unexpected is to pre-think about the solution. You shouldn’t think about the solution only when the cost arises. our first time thinking about the solution to this unexpected expense should not be when it first happens.  One solution for an expense such as needing a new laptop would be to utilize an old one until you can afford a new one. Consider different ways you could handle the same situation. Come up with solutions that cost money or don’t and figure out what our options might be instead of waiting for your actions to be activated financially.  The Importance of Building A Savings Let’s also talk about savings. You should already be saving for your taxes as long as you have a profit, but you should also focus on building your business emergency fund. I’m a fan of diversifying my savings model and automating it through my bank. You can do this on a weekly, monthly or bi-weekly basis. Build a cash reserve in your business.  There are two methods to savings. The first is through your bank with large, substantial amounts on a monthly basis. This would be macro-savings. The other method is to micro-save through savings apps, such as Qapital or Digital Savings. Micro-saving is saving smaller amounts such as $0.60 or $3 per day. I am a fan of pairing macro-savings with micro-savings! Are you building a cash reserve and preparing for the unexpected? LINKS MENTIONED Qapital savings app andismiles.com/qapital  Digit savings app  andismiles.com/digit  Episode 24: How do I save more in my business and when should I invest?  https://andismiles.com/podcasts/e24/  How To Build A Business Emergency Fund Quickly And Easily  https://andismiles.com/2019/04/10/business-savings/  How to Save in Your Business Even if You’re Broke  https://andismiles.com/2018/04/09/how-to-save-in-your-business-even-if-youre-broke/  How to Automate your Tax Savings with Qapital  https://andismiles.com/2017/08/14/automate-tax-savings/ 

How do you prepare for unexpected business costs?

When deciding what accounting software to use, it can be confusing and hard to compare one to another without diving in and actually using them. I have used several, and today we’re going to compare two I have used and have quite a bit of experience with. No one wants to make this seemingly daunting task any harder than it has to be, and I’m going to share a couple time hacks to help you make it even faster! We’ll talk about how each of these cloud based systems can feel almost automatic once you’ve set things up the way you’d like, how to integrate each of these with the platform you sell from, and how to know which one is best for you, because December 31st isn’t the only time you should be looking at your numbers and reports. Are you using the accounting software that’s best for your business?   What we’re talking about It’s Almost Automated - Two Cloud Based Accounting Software Systems Integrations With Your Selling Platform Thinking Long Term - Which Will Serve You Best It’s Almost Automated - Two Cloud Based Accounting Software Systems  Most people aren’t thinking of what accounting software they want to use when they start their business. It’s something that happens over time, out of necessity, unless you’re a numbers geek like me, and enjoy that kind of thing. So, it may come as a pleasant surprise to find out that QuickBooks Online (not to be confused with any of the other QuickBooks products) and Wave are both able to automatically download your bank transactions, sales, refunds, etc. and load it into your accounting system. Both are cloud based, and you can access the information in your system from their website, as well as their app.  Integrations With Your Selling Platform The last thing you want when you’ve got a booming business is to worry about the tedious task of entering each sale, breaking out the sales tax, and fees from collecting the money from the invoice. While Wave, a free accounting software system has some integrations that work with various selling platforms such as Etsy, Square, etc. But QuickBooks Online, although it’s a paid accounting software system, has many more platforms it integrates with. This is something you’ll want to check into before making the final decision of which system to ultimately go with. Thinking Long Term - Which Will Serve You Best Free always sounds good, but when deciding on which software system to choose, the thing you want to keep in mind is what your long term goals are. Will you have multiple locations? Do you need your expense categories subdivided? How detailed do your reports need to be? Which system works with the platform that brings in the most money for you? Is the free software worth the amount of time it will take you to manually do some of the functions the paid one does automatically? Don’t forget that the cost of the system can be expensed out!  LINKS MENTIONED Is QuickBooks Online Right For You? https://andismiles.com/2018/02/12/is-quickbooks-online-right-for-you/ Which Version of QuickBooks Online is Right for You? https://andismiles.com/2018/02/19/which-version-of-quickbooks-online-is-right-for-you/ The Best Integrations to Streamline QuickBooks Online  https://andismiles.com/2018/05/28/the-best-integrations-to-streamline-quickbooks-online/ How to Use the QuickBooks Online App to Stay on Top of Your Bookkeeping https://andismiles.com/2018/06/04/how-to-use-the-quickbooks-online-app/

Is QuickBooks Online better than Wave?

We are halfway through 2020 and in addition to being busy with COVID-19 and combating social injustices, some business owners are also realizing they are behind in their bookkeeping. I feel your pain because I’ve been there as well and it’s nothing to be ashamed of because it’s actually not uncommon. Your bookkeeping should be a focus now though so that you aren’t going into the last quarter of the year needing to catch up even more. Let’s dive into how you can catch up on many months of your bookkeeping! Get ready to get back on track with your bookkeeping!  What we’re talking about Assessing What Needs To Get Done In Your Bookkeeping Doing The Prep Work - Have What You Need Before You Start Getting Started With A Method For Your Bookkeeping Batching Your Work - Macro Batching and Micro Batching Last Steps To Catching Up On Your Bookkeeping Assessing What Needs To Get Done In Your Bookkeeping Before you work on all that you need to catch up on, you need to assess what needs to get done. Identify all of the components of your bookkeeping that are undone, including what accounts you need to do. Start off by making a list of them. Write out all of your accounts, such as your bank accounts, Venmo, PayPal, and credit cards. Any type of account in which there is a transaction should be included.  Once you have your accounts listed out, focus on things you track, such as mileage, home office expenses, split expenses, such as your cell phone, internet, and cash receipts. You will need to include all of these items in order to get caught up!  Doing The Prep Work - Have What You Need Before You Start  You now have a list of everything you will need, so next you need to gather your materials. Have everything you need to do the work before you start on it. If you are using your bank statements, you need to download them year-to-date. If you’re using QuickBooks, make sure your bank is connected and update the system, so that your statements download properly. If you don’t want to download everything, have your login details available and finish the prep work a day or week before to save time.  Getting Started With A Method For Your Bookkeeping We have now reached the doing phase of things! You have what you need and you know what needs to get done. Most people will want to do month-to-month which is a great method if you have one month to do. If you need to catch up on a lot of months, you’ll be switching between too many accounts and it breaks the flow. Try batching by account, not month and only focus on one account at a time.  Batching Your Work - Macro Batching and Micro Batching Macro batching is high level batching in which we focus on one account at a time. You will have a variety of deposits, checks, and transactions, so I suggest you focus on one account at a time. It’s going to be easier to have your checking account on your screen and to look at all of your check images at once, rather than to toggle between multiple accounts. This is breaking up the work, by breaking up the accounts.  Micro-batching is working within each account. An example of working in the account is by doing all of the deposits at once. Start by tackling all of the easy transactions at once followed by all of the recurring subscriptions that are easy for you to categorize or type in. To make this even easier, you can sort alphabetically in QuickBooks. Next, focus on the checks at once so you can look at images at once and not have to search for numbers. Finally, work on your Venmo transactions at once since you have to log into your Venmo account to access the details.  Last Steps To Catching Up On Your Bookkeeping The last step is to do easy stuff. Skip the hard stuff or things you have questions about. If there’s research that needs to be involved in which you have to exit from what you’re currently doing to figure it out, skip it. At the end, once everything is batched, spend a day or two to find the answers to your questions.  Do you feel motivated and less stressed about getting your bookkeeping back on track? LINKS MENTIONED Free workshop: Catch Up Your Bookkeeping in 10 Days https://andismiles.com/workshop/ Why Your Bookkeeping Is Behind and How to Deal With It https://andismiles.com/2016/12/05/why-your-bookkeeping-is-behind/ How to Get Your Bookkeeping Done Quickly & Easily https://andismiles.com/2017/07/17/get-bookkeeping-done-quickly-easily/ How to Get Your Bookkeeping Done In a Time Crunch https://andismiles.com/2016/12/19/get-bookkeeping-done-in-a-time-crunch/

How do I get back on track if I've been slacking on my bookkeeping?

As you’ve probably guessed, business owners should be tracking their finances- but what does that really mean?! One of the most asked questions I get is what business owners should be tracking and what to do with the information you’re tracking.  We track for two reasons: taxes and information. Tracking for taxes is the technical side of things and the part of tracking that helps you stay legally compliant with the IRS.  Tracking for information is the analysis side of things. It’s how you integrate the information you track into your decision making. Your business has its own language, which is money. By understanding your numbers, you’ll be able to ask your business questions and have it respond back to you. Are you ready to learn your business’ money language?  What we’re talking about Tracking Your Income Tracking Your Expenses Tracking your Net Income (aka Profit) The Role Your Taxes Play In Your Business Cash Flow - Tracking It & Understanding It Tracking Your Income You need to track your income in your business for tax purposes. You’ll report your gross income on your taxes. Gross income is all the business revenue you earn before you account for expenses and costs.  But, you can take this tracking one step further by breaking it down into specific categories. This is where the language of your business comes into play.  If you have multiple income streams, you should distinguish between them to see where you are earning the most and the least money. This will allow you to see how you make your money, and understand why you have revenue changes in your business.  It’s helpful to think of your revenue streams as people or personalities. They each have their own strengths and weaknesses, as well as individual needs. Through tracking, you can understand the qualities of each income stream and predict what will make them “happy” and “sad.” This allows you to see where there is potential for growth and when a service or product might not be the best fit for your business model.  Tracking Your Expenses Like income, you track your business expenses for tax purposes and the IRS does require some level of breakdown to various tax deduction categories.  But, you can take your tracking one step further by also creating expense categories that answer key questions you have about your business. When deciding what expense categories to track, work backwards from the challenges you’re facing in your business. Then, identify what information you need to address these challenges. That’s what you’ll track.  It’s also helpful to understand how much you spend on essential expenses every month. In other words, what’s the bare minimum cost to run your business? Knowing this will help you set financial goals and know what income numbers you need to hit every month.  Tracking your Net Income (aka Profit) Next, you’ll want to track how much money your business is making, also known as profit or net income. Your gross income minus your cost of goods sold and expenses is your net income.    If it’s positive, then you’ve made more than you’ve spent and you have profit. If it’s negative, then you’ve spent more than you’re making. Understanding your profit will help you gauge if you’re moving towards a sustainable business model.  You will need to ask yourself if the profit you;re making is enough and what you’re going to do with your profit. Will you pay yourself? Can you pay yourself? Are you saving for taxes? Can you pay off your debts? Will you use the profit for future investments or an emergency fund? You will have a unique vision of what you will do with your profit. The Role Your Taxes Play In Your Business Taxes can have a significant impact on the health of your business if you aren’t saving for them. You need to track how much you should be saving for taxes and whether or not you’re on track. Keep track on an ongoing basis and ideally save every month.  Cash Flow - Tracking It & Understanding It It’s important to know how much cash you have on hand and how much you’ll need for upcoming bills. This is what we call cashflow tracking.  Keep in mind that cash flow isn’t just business expenses. It’s all the money that goes out of your business, including covering expenses, paying yourself, your tax savings and any kind of loans or debt payments you have.  Knowing and understanding your cash flow is proactive because you are looking towards the future and planning it out. If you don’t have enough actual cash, then you’ll need to create a plan for how you’ll manage the outflow.  Will you use a credit card? Savings? Is there a cash flow issue now and will it continue in the future? How can you set yourself up to not have cash flow issues in the future? It’s important to not only know your numbers in your business, but to also understand them.    LINKS MENTIONED What Reports Do I Need To Look At For My Business Blog Post https://andismiles.com/podcasts/e19/  How Do I Pay Quarterly Taxes Blog Post https://andismiles.com/podcasts/e21/  How Much Do I Need To Save For Self-Employment Taxes https://andismiles.com/podcasts/e9/ 

What Are the Top Five Things Business Owners Should Be Tracking and Understand Completely?

Today we are mixing things up a bit and not focusing on one topic, but the questions of what’s the number 1….I get a lot of questions that usually start with “what’s the number 1…?” because people want a straight answer on what my favorite thing is or my biggest piece of advice. Today I am sharing those questions and sharing the most common number one type of questions I receive. We’re still tackling topics such as accounting platforms, managing your finances when you start your business, and much more.  Get ready for this rapid fire episode that is filled with questions and answers! What we’re talking about  Starting Your Business Structuring Your Finances First Step In Business Finance What I Wish I Knew When I Started My Business Categorizing Transactions Best Bookkeeping Tool For An Online Business Best Money Earning Hack Starting Your Business The first question I get asked most often is “What’s the first thing I need to start with in my business?”. I’ve said this time and again and will continue to say that separating your personal and business finances is the first thing you should do in your business.  Structuring Your Finances Going hand in hand with what to do with your finances when starting your business is how to structure your finances. What’s the best way to structure your finances to keep them easy and clear? Just as separating your personal and business finances is what you should do in the beginning, this is also the way you should structure your business finances going forward.  Just that one tiny action will have such a tremendous effect on your financial organization.  First Step In Business Finance What one action should I make a habit to get my business finances in order? If you want to get your business finances in order, then I suggest you do your bookkeeping on an ongoing regular basis. Once a week is ideal. This habit is one you’ll carry with you throughout your business journey and it will ensure organization and stress relief.  What I Wish I Knew When I Started My Business So often I get asked what is the one thing I wish I knew about finances when I first started my business. The truth is that I wish I had simply paid attention to my finances and dealt with them. I avoided dealing with them and it caused me stress. By paying attention to your finances and dealing with and engaging with them, you’ll avoid stress that you otherwise would have if you pretend they didn’t exist.  Categorizing Transactions I talk a lot about ensuring you properly categorize your income and expenses and because of that, I often get this next question. What is your biggest challenge with categorizing transactions correctly? The answer is simply knowing what “correctly” meant.  Best Bookkeeping Tool For An Online Business What’s the best bookkeeping tool for an online business? This is by far the #1 question I get! My advice is to find the right tool for yourself. Selecting a digital bookkeeping program or software is the best way to go about managing your business income and expenses because it automates so much and there’s a low risk of human error. Quickbooks online is the best that currently exists. Best Money Earning Hack I am all about finances and money, therefore it’s not uncommon for me to be asked what my best money hack is to making more money. The business model strategy I believe in and practice is to diversify your income streams. Diversifying cushions you from unpredictable things happening. Diversification is about who you work with and not just about solely having different products and services you sell. Things you should look at are the types of customers you serve, the price points you serve customers at,  your various offerings, and sales channels. Diversification is having enough roots in enough places. It’s ensuring that if some roots get chopped off or sick or rotted….that the other roots are healthy enough to still sustain the tree that is your business. What’s your number one question about business finances? LINKS MENTIONED Ep #2: How do you separate your business and personal finances? https://askandi.libsyn.com/how-do-you-separate-your-biz-vs-personal Ep. #17: How much time should I spend on my business finances? https://andismiles.com/podcasts/e17/ Ep. #10: What's the best way to track my documents and receipts? https://andismiles.com/podcasts/e10/ How to Add Passive Income to Your Online Business: https://andismiles.com/2018/12/10/passive-income-ideas-business/

What's the number one..?

As an entrepreneur, one of the trickiest aspects of business can be raising your rates, even if it’s very well deserved. Today we are not only talking about why raising your rates is acceptable, but how to do it with confidence, and without losing clients! What we’re talking about Business Is Booming It’s All In Your Approach Keeping Your Existing Clients Through A Price Increase Business Is Booming! So, you’ve been consistently working for your same rate, but your schedule is completely full. What do you do? Good news! It’s time to raise your rates! There are many reasons it may be the right time for you to increase your prices including increased demand, more experience, and an expanded service list, just to name a few. But, how do you increase with confidence?! We have all the answers in our episode today, including some freebies you can use to increase your rates with confidence. It’s All In Your Approach When thinking about boosting your rates, the most important parts are your approach and planning it out. If either of those aren’t paid close attention to, it could be a rocky road (and not the kind we like to dip our spoons into!). You want to be sure the communication of your increase is received, acknowledged, and kept in the same manner as you normally communicate with your clients. A little nervous? Don’t be! We’ve got you covered. Keeping Your Existing Clients Through A Price Increase One of the most nerve wracking parts of increasing your prices is wondering how your clients will respond. After all, it’s your clients that have gotten you to this point, right? Show them your appreciation, but be confident. If done with tact, sensitivity, and appreciation, you can pull this off like the pro you are! I’ll read you my price increase letter so you can see what’s worked for me, and put it to use in your own business. LINKS MENTIONED 12 Essential Things To Do Before Raising Your Service Rate (and FREE rate increase checklist) https://andismiles.com/2016/10/10/essential-things-to-do-before-raising-service-rate/ How Raising My Rates Brought Me Closer to My Clients (and FREE rate increase template letter) https://andismiles.com/2016/06/06/raising-rates-brought-closer-clients/ Should You Charge Hourly or By the Project (and FREE perfect pricing spreadsheet) https://andismiles.com/2018/08/27/should-you-charge-hourly-or-by-the-package/ Price Your Products and Services for Profit Workshop https://andismiles.com/money-masterclasses/ How to Set Your Prices So You Aren’t Broke (and FREE perfect pricing spreadsheet) https://andismiles.com/2017/12/04/how-to-set-your-prices/

How To Raise Your Prices Without Losing Clients

Many would like to start saving more money in their business, but are unsure of where to begin. Today we are talking about knowing when is the best time to start saving, a couple super easy ways to get started, and how to ramp up the momentum without feeling a huge pinch in your operating budget. Are you ready to see the balance in your business savings grow rapidly? What we’re talking about Getting Started Saving Without Feeling the Pinch How Do I Know What to Invest In? Sticking With It Getting Started Saving Without Feeling the Pinch “How do I get started saving, save more, or invest in my business?” is a perfect way to sum up the thoughts of a lot of business owners when it comes to saving for and investing in their businesses. But, what if there were a couple tools to make it almost a “set it and forget it” task? We know that saving in your business isn’t always an option, but if you’re able, it can feel like a huge weight off your shoulders. We’re going to drop some serious golden nuggets for you to use! How Do I Know What To Invest In? When it comes to investing in your business, it’s important to align your dollars with the values of your business. Not sure exactly what those are? We have a set of questions for you to consider when selecting products, services, and contractors to invest in so you can be sure you’re making choices that mirror your values. Now, more than ever, we are voting with our dollars in many different aspects. Sticking With It Saving for your business is a noble goal, but one that may feel like an insurmountable feat for a business owner, especially in these uncertain economic times. If you’re emotionally tuned in and tied to the why of the reason you’re saving, you’re more likely to pursue the task, and follow through with it. Allowing you to watch your savings balance grow, without reservations. Are you ready to see your savings balance go up without feeling the pinch?   LINKS MENTIONED Digit Savings App Qapital Savings App How To Do A Spending Audit For Your Business How To Find Money Values For Your Business How Do I Know If I Should Invest In My Business Podcast (Episode 11) Dubsado App Reimagining Small Business Town Hall with Rachel Rodgers

How do I save more in my business and when should I invest?

Business strategy is one of my favorite topics to consult and coach on, so today’s question of “How do I turn my side hustle into a full-time business?” is one that excites me. My bookkeeping business started as a side job. A side job in addition to 3 other jobs, but it started to take on a life of its own bringing in more clients and more money, until I was finally able to quit one of the three jobs, then another and finally going full-time working for myself. It seemed accidental at the time, but it wasn’t accidental at all. It simply started by accident. Today I’m sharing my thoughts on what I did not do well and what I think I did ok on when I turned my side hustle into a business, along with what I’d do differently. We all have our own journey, but there are definitely steps we can all take that will lead creating full-time businesses for ourselves.  Any business is possible. I believe that and so should you. What we’re talking about The Importance of Forecasting For Your Business Growth Build Within Your Capacity - Grow At Your Own Pace Understand Your Tipping Point - Know When To Quit Plan Ahead & Be Intentional  The Importance Of Forecasting For Your Business Growth The first step you should take to turn your side hustle into a full-time business is forecasting. Figure out what you need to do to take your side hustle full-time. I offer forecasting sessions and time and time again, clients come very nervous to this appointment thinking their business model isn’t right and won’t work. The reality is that has never been the case. I believe any business is possible, but you have to take the time to think about the numbers. Take time to think about what the numbers would need to look like in the future, not about where they are now. Consider how many clients you would need, how many products you would have to have and what your revenue streams would be. Work towards diversifying your income streams and don’t think about right now. This is about forecasting the future.  Build Within Your Capacity - Grow At Your Own Pace Once you have forecasted your business and understand those metrics, you need to build within your capacity and towards something. When I started my side hustle, I had 3 other jobs and could not build capacity. If you don’t build capacity, then you’ll end up working 80 hours a week.  A great way to grow and build capacity is to implement passive income streams. My business was very service based, therefore a lot of my time was taken up. I wish I would have created more passive income streams which would have been investing in my future. Think about what kind of assets you can create now and leverage later in your business, such as digital products, online courses, templates, and spreadsheets. In the long run, these streams will help you earn what you need faster. If I had known this, I would have prioritized passive revenue streams early on rather than building out a service based model.  A change I would have made when I started my side hustle was to have built an audience for myself. It took me 7 years to get on social media and build a blog or have a website. I should have made myself more visible and built my email list and social media, but at the time I thought of this as extra money and not something that would turn into a full-time business.  Understand Your Tipping Point - Know When To Quit Understanding your tipping point is the point at which you will need to quit your regular job(s) because you are at capacity with your time. There will be an awkward overlap time where you can’t do everything you need to grow your side hustle and keep up with your regular job, but this is the point in time where you need to make a change. This change could be reducing your hours at your regular job or maybe quitting your full-time job and getting a part-time job to make up for the financial difference. Your goal is to plan your finances to the point that your business can take care of you. Plan Ahead & Be Intentional If you have a side hustle that you want to turn into a full-time business, then it’s important to remind you that it’s not about doing what I did. It’s about being planful. Know how much money you need to save, reduce your personal expenses if necessary, but whatever you do, be intentional in how you do it and plan for it.  It’s more about the intentionality and being planful about when I’m eventually ready to pass this tipping point and focus more if not completely on my side hustle. What will that be like and what do you need to do to plan for that? Are you ready to take your side hustle and turn it into a full-time business? LINKS MENTIONED Side Hustle School episode featuring Andi: Bookkeper Begins Banking Bonus Income https://podcasts.apple.com/podcast/id1188487073?fbclid=IwAR0_7CndM3xGElRl8dME-46eA0SI9BQglk1YU6WMXhbI-EM56-dOT5y1kI4&i=1000466409567 

How do I turn my side hustle into a full time business?

SHOW NOTES   Today we’re tackling something that we all struggle with, procrastination. Sometimes we’re off to the races knocking things off of our list and other times it’s a certain topic or task that we put off  again and again. We will discuss some ways to kill the procrastination bug, as well as how to make a list of tasks that need to be done on a regular basis so you’re not always racing to catch up. Learn about how to find and put together a financial task list to help keep your business finances in order! What we’re talking about Why We Procrastinate  Ways We Can Break the Procrastination Habit How to Make a Personalized Financial Task List Why We Procrastinate  We hate to do things we feel are hard, we aren’t good at, or we don’t like, so we procrastinate on them. What comes to mind when you think about doing the financials for your business? Does it bring a sense of dread or panic? Is it because you’d rather be elbow deep in the “fun” part of your business? Are you bewildered by the different requirements for your business? Or is it another reason altogether?  Ways We Can Break the Procrastination Habit Once we can pinpoint your “why,” we can push through to break that nasty habit! We have a host of ideas to help address many of the reasons people delay, delay, delay when it comes to their business finances. We’ll break it down into easy steps to get you on the right track. How to Make a Personalized Financial Task List What if someone were to hand you a complete list of financial tasks so you’d never be running in circles at the end of the month, or come tax time? We have a couple ways for you to get your hands on just that. Never worry you’re missing things to keep your business finances on track again! LINKS MENTIONED Bookkeeping Checklists How to Stop Procrastinating on Your Finances How to Deal With Money Overwhelm in Your Biz How to Stay on Top of the Little Things in Your Finances How to Find Your Money Step One

How do you overcome procrastination with your business finances?

We’ve talked about how to save for your taxes and how to do your taxes, so today I am sharing how you can pay your quarterly taxes. We are also diving into what to do if you are behind in your tax payments or owe money on back taxes. In addition to all of this, I’ve got some great tips on how you can create additional income to pay off or pay more towards your taxes without touching your current revenue stream.  It’s time to start preparing for your quarterly tax payment! What we’re talking about How Do You Pay Quarterly Taxes? When Are Your Quarterly Taxes Due? How Do You Get Caught Up On Back Taxes Or Haven’t Paid Your Quarterly Taxes? Tips & Strategies To Generate Additional Income How Do You Pay Quarterly Taxes? Before you pay your quarterly taxes, you need to know how much you should pay. There are two ways to know what that amount is. The first way is, if you have filed taxes in the past, calculating your estimated tax payments based on the previous tax year.  Usually, after filing your taxes, you’ll receive 1040ES payment slips/vouchers for the current year and you’ll send these in with your quarterly payments. These vouchers are often pre-filled with the amount you need to pay every quarter for your federal taxes.  The amount on the vouchers takes your total tax liability for the previous year and divides it by four. If you have a tax preparer, they sometimes will adjust the amounts based on your business projections for the current year.  The second way to know how much to pay on your quarterly taxes is to do real-time calculations, which can often be a better option for growing businesses. If your business has consistent revenue and profit year to year, then this isn’t necessary.  But, if your business experiences extreme growth, then using last year’s data would mean you would underpay your taxes. With the real-time method you’re calculating your tax payments based on what you’re really earning in your business.  For the real-time method, the general rule of thumb is to pay 30% of your net income every quarter. You have two options on how you make your payment. The first is with the vouchers in which you mail a check to the IRS. You can also utilize one of two online systems to make payments. The IRS has a direct pay site where you pay via a bank transfer for free, or you can use a debit/credit card and pay additional fees.  The other online option is the EFTPS government site which requires a login, but also provides you flexibility and payment history viewing. You can also schedule your payments a year in advance.  When Are Your Quarterly Taxes Due? Quarterly taxes are due quarterly, or 4 times a year. Your first quarterly tax payment is due April 15th for the period of January 1 - March 31. Your second quarterly tax payment is due June 15th for the period of April 1 - May 31. Your third quarterly tax payment is due September 15 for the period of June 1 - August 31. Your fourth and final quarterly payment is due January 15th for the period of September 1 through December 31. Due to COVID-19, the first and second quarterly tax payments for 2020 have been moved to July 15th.  How Do You Get Caught Up On Back Taxes Or Haven’t Paid Your Quarterly Taxes? If you need to get caught up on back taxes or if you haven't made quarterly payments towards your taxes, then you can make a large payment at the end of the year. You also have the option to pay every month and you don’t only have to pay the minimum. If you have additional money that you can pay towards your tax debt, then make the payment! Tips & Strategies To Generate Additional Income If you are struggling to come up with the necessary funds to pay your quarterly taxes or back taxes, then one strategy you can use is to pick up extra projects or work and utilize that income only for your tax payments. This ensures that your normal income isn’t affected.  Another option that I have seen work really well for business owners is to create a passive income product, such as a digital download. The revenue you generate passively can go directly to your tax payment.  LINKS MENTIONED Episode 9: How Much Do I Need To Save For Self-Employment Taxes? https://askandi.libsyn.com/how-much-do-i-need-to-save-for-self-employment-taxes IRS Direct Pay Website  https://www.irs.gov/payments/direct-pay EFTPS Website https://www.eftps.gov/eftps/ Everything You Need to Know About Estimated Taxes https://andismiles.com/2019/02/04/what-are-estimated-tax-payments/

How Do I Pay Quarterly Taxes?

We are following up to last week’s episode about your Profit & Loss Report by asking the question of why is your profit different from your bank balance each month? Which numbers are the ones you should be focusing on? Simply put, the answer is BOTH! Your profit and your cash flow play important roles in your business finances and you should look closely at both of them on a monthly basis and more.  Let’s start comparing numbers! What we’re talking about  What’s A Profit & Loss Report? What Is Cash Flow? How Much Money Do I Really Have? What’s a Profit & Loss Report? A Profit & Loss report shows you... How much money you’ve made  How much money you’ve spent on your cost of goods  How much you’ve spent on operating expenses How much money you’ve made in profit There are three sections of a Profit & Loss Report.  Income: This shows you your total income over a period of time which can be broken up by revenue stream. It’s helpful if you’re generating revenue through various income streams (like consulting, digital products, and physical products) so you can see how you’re making money.  You can view your revenue on a macro level, which is the grand total, or you can view it on a micro-level, which includes the details of what income streams make up your total revenue.  Cost of goods sold: Like the income section, this can also be broken down by different types of costs, such as raw materials and labor.  Expenses: This shows you all of your operating expenses by expense category and the grand total. Often, your expense categories are the same as your tax deductions category, so this part of the report is helpful when filing your taxes.  The final line of a Profit & Loss report is the net operating income or your profit. If this number is positive, then you’ve made more money than you’ve spent. If this number is negative, then you’ve spent more than you’ve earned.  What is not included on a P&L report: not all the cash that’s gone out of your business. It only shows the cash gone out of your business that goes towards your cost and business expenses (what you’ve spent).  What Is Cash Flow? Your cash flow and profit are different things, therefore they are different numbers. Profit doesn’t include as ins and outs as cash flow does. Profit doesn’t take into account things such as paying yourself or the amount of money that you’ve taken out personally or put in personally.  Cash flow includes the amount you pay to your credit card or on a loan or debt payment because cash flow includes the payment of liabilities. When you pay a liability, it’s not categorized as an expense because it was already categorized and accounted for when you spent the money.  Your cash flow shows credit card or loan or debt payments because they are liabilities.  Cash flow is actual cash, not when someone owes you money. It is true cash coming out of your business and includes payments for liabilities, paying yourself, paying owners, loans you receive, and more. How Much Money Do I Really Have? When comparing your bank balance to your profit and loss report, you might be wondering which number is correct. You should start by looking at your profit, not at your bank balance. Strategize on how you want to spend your profit and start allocating it to either invest, pay for taxes, etc. Remember though that you don’t actually have this amount of money in the bank because you’ve already made decisions along the way on how to spend your profit, whether on credit card payments or other purchases. Your goal should be to get to the point where you have more money in your bank account that you have in profit so you can allocate it easier.  Both your profit and your bank balance numbers are important and both represent what is left over. Your profit is how much you actually made, while your bank account is how much you have on hand. They’re equally important and you should treat them as such.  Are you studying both your cash flow and your profit and loss report?  LINKS MENTIONED EP 19: What reports do I need to look at for my business?  https://podcasts.apple.com/us/podcast/what-reports-do-i-need-to-look-at-for-my-business/id1492829058?i=1000473632794 Free Profit & Loss Template (inside the Biz Finance Survival Kit)  andismiles.com/survivalkit Healthy Cash Flow Management That Won’t Freak You Out! https://andismiles.com/2017/03/21/healthy-cash-flow-management/ How to Avoid Feast or Famine in Your Business https://andismiles.com/2018/04/02/how-to-avoid-feast-or-famine-in-your-business/

Why is my monthly P&L report different from what I have in the bank?

Regardless of whether you are a salon owner, a landscaper or an online business owner, there’s one report that you should run regularly to know your numbers. Knowing your numbers means knowing exactly how much money you’re making, spending, your profit and knowing how to use that information to assess the financial health of your business.  So what’s the most important report for your business finances? Your Profit & Loss Report, or your Profit & Loss report. You might be familiar with a Profit & Loss report and run the report for your taxes but it can also help you understand the financial health of your business.  It’s time you know your numbers! What we’re talking about What’s A Profit & Loss Report? How Do You Use The Numbers In Your Profit & Loss report? How Your Profit & Loss report Helps You Make Decisions in Your Business What’s a Profit & Loss Report? A Profit & Loss report shows you... How much money you’ve made  How much money you’ve spent on your cost of goods  How much you’ve spent on operating expenses How much money you’ve made in profit There are three sections of a Profit & Loss Report.  Income: This shows you your total income over a period of time which can be broken up by revenue stream. It’s helpful if you’re generating revenue through various income streams (like consulting, digital products, and physical products) so you can how you’re making money.  You can view your revenue on a macro level, which is the grand total, or you can view is on a micro-level, which includes the details of what income streams makes up your total revenue.  Cost of goods sold: Like the income section, this can also be broken down by different types of costs, such as raw materials and labor.  Expenses: This shows you all of your operating expenses by expense category and the grand total. Often, your expense categories are the same as your tax deductions category, so this part of the report is helpful when filing your taxes.  The final line of a Profit & Loss report is the net operating income or your profit. If this number is positive, then you’ve made more money than you’ve spent. If this number is negative, then you’ve spent more than you’ve earned.  How Do You Use The Numbers In Your Profit & Loss Report? You can compare the numbers in your Profit & Loss report to previous periods (like months or quarters). By comparing the numbers month to month or quarter to quarter, you’ll understand where you are at financially, and more importantly, why you’re there. For example, maybe you made more money this month (hooray!). But do you know why? A year to date report helps you see what income categories are generating the most revenue and what percentage of your income comes from which category. It’s also a great way to see if one revenue stream earns more than others.  This also applies to your costs and expenses. You should use this report to understand where you’re making your money, spending your money and if it’s aligned with your goals.  You can also use your Profit & Loss report to track the return on your investments, such as advertising, and see if they paid off. If you spend money on ads one month, are you seeing a return on those ads over the next few months? You can watch your revenue numbers to find out.  How Your Profit & Loss report Helps You Make Decisions in Your Business You can run your Profit & Loss report on a year to date basis and break the entire year into months. By doing this,  you get an overview of the ebbs and flows of your income and expenses in your business. If you have seasonal ebbs and flows in your business, then you can make better business and personal decisions. Instead of implementing something on a whim, you’ll analyze your numbers to ensure certain decisions work for you.  Have you run your profit & loss report lately? LINKS MENTIONED Profit and Loss Template  andismiles.com/survivalkit Profit and Loss Reports Tutorial QuickBooks Online: https://youtu.be/o6ZSyBEi-_M How to Read a Profit and Loss Statement for Small Businesses  https://youtu.be/pSWhxTMEmdU How to Increase Your Income Using Small Business Financial Reports https://youtu.be/Xn0gpSUzBPM 3 Killer Reports in QuickBooks to Rock your Business https://andismiles.com/2016/06/13/3-killer-reports-quickbooks-rock-business/

What reports do I need to look at for my business?

Dealing with the money side of running a business is hard. In fact, it sucks. Every week, Andi Smiles, small business financial consultant and recovering financial hot mess, answers real questions from real business owners about their money. If your business finances have you scratching your head and saying WTF, this podcast is for you.

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