88: Bookkeeping Leads To Accurate Financial Statements Whether You Are Starting A Business
88: Bookkeeping Leads To Accurate Financial Statements Whether You Are Starting A Business, You Are Self-Employed, A Solopreneur, Entrepreneur, Mompreneur, Business Owner, Side Hustler, Freelancer, Bookkeeper, Virtual Assistant, Or VA
You want to be able to rely on your financial statements so that you can make smart business decisions, but how do you get these accurate financial statements? You need to account for all the money coming in and going out of your business. You need to ensure that you have all your entries in your business recorded. You need to make sure that you are doing your bookkeeping correctly to have those accurate financial statements you can rely on. In today’s podcast episode, I’m covering how you can be confident you are doing your bookkeeping correctly so that you can rely on your financial statements. Whether you are a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, reviewing your financial statements, which include your balance sheet and income statement every month is essential to running your business. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
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Show Notes:
You want to be able to rely on your financial statements so that you can make smart business decisions, but how do you get these accurate financial statements? You need to account for all the money coming in and going out of your business. You need to ensure that you have all your entries in your business recorded. You need to make sure that you are doing your bookkeeping correctly to have those accurate financial statements you can rely on. In today’s podcast episode, I’m covering how you can be confident you are doing your bookkeeping correctly so that you can rely on your financial statements. Whether you are a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, reviewing your financial statements, which include your balance sheet and income statement every month is essential to running your business. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
Welcome Back…I want to ask you if you put your bookkeeping as a low priority or if it seems like a meaningless task that needs to be done in your business. I also want to ask how much importance you put on reviewing your financial statements or utilizing them to make smart business decisions. When I ask these questions, I usually hear that bookkeeping is put off or isn’t always up to date, but I also hear that business owners want to be able to rely on their financial statements to really understand how their business is doing. So, how can you have one without the other? Well, it’s easy…you can’t, and this is exactly why you need to put a higher priority on maintaining your bookkeeping records and making sure that you have your information entered on a timely basis.
When you are just starting your business, it can be easy to get started with your bookkeeping because you are starting with a clean slate. You don’t have any transactions recorded yet, typically, your volume is down, and you have the time to make sure you have everything recorded. You are also usually pretty excited about your business, and you want to track each one of your sales as they occur. This is the best time to make sure you have a system in place to get your bookkeeping done. Everything is new to you, and you want to do everything the right way. It is also a great time to make sure that you are scheduling your bookkeeping time so that you are able to get your bookkeeping done consistently. I always say that if you want to ensure you get something done, you need to plan for it in your schedule. Actually take your calendar and block off time so that you can get your bookkeeping done without any distractions. If you don’t do this, it will surely get missed.
But what about if you’ve had your business for a few years and you still don’t have a sound bookkeeping process? Well, there won’t be a better time to start than right now. You will first need to decide when you need to start with your bookkeeping. Are your tax returns up to date? If so, you can probably start with the current year. If not, I would recommend you start your bookkeeping with the year that you need to file your next tax return. Not only will this give you the information you need to file your tax return, but you will also be building information so that you can look back on prior years to see how your business is doing.
Maybe you have already been doing your bookkeeping, but you haven’t been the best at getting everything recorded. You have some information recorded, but you are missing other parts. You may need to do some clean-up to make sure you have everything recorded and are able to reconcile your accounts so that you know everything is accounted for, which means your financial statements will be accurate as well. Don’t drag your feet on this; the sooner you start getting everything caught up, the sooner you will be able to have a quick and efficient process set up so that you can make sure that every month your bookkeeping is up to date and you can review your financial statements.
If you know you are not at a point to outsource your bookkeeping, it is up to you to make sure you set your bookkeeping as a priority. It is up to you to make sure you have that accurate data to be able to review your financial statements. It is up to you to make sure you are recording all your deposits and invoices so that your total revenues are correct and to make sure you are consistently collecting your sales so that you don’t struggle with your cash flow. It is up to you to record any bill payments or other withdrawals so that you are able to take every tax deduction available to you.
When you have your bookkeeping up to date, what information could you be utilizing to make smart business decisions? Let’s cover just a few examples. Most businesses will set a monthly goal for sales. When you have your bookkeeping up to date, you can look from month to month to see how your monthly sales have been doing. You can determine which months fell short of your goals as well as which months performed better. You can then take this information and analyze why so that you can continue to improve your sales going forward.
When you are looking at your income statement, you can compare the current year to the previous year to see where your income and expenses are sitting. This not only gives you a picture of how each category is doing, but you can look at the overall net income or loss so that you understand where you are sitting for your upcoming tax return in comparison to your last tax return. If your net income is quite a bit greater than the previous year at this time, you can start saving for your additional tax liability. If your net income is less than the year before, you can look into why and make some changes so that you can end the year better.
There are so many ways you can utilize the bookkeeping you do in your business to lead your business to greater success, but when you don’t have this information on a timely basis, you and your business lose. My advice to you is that you need to get your bookkeeping done at some point so that you can report those figures on your tax return, so why not stay up to date and benefit now.
If you know you need to get your bookkeeping done, but you are unsure how to get started, or you just need help with understanding what you need to do next, join me, and let’s do this together! I’ve just opened the enrollment to my Strategic Bookkeeping Academy, and I’m here to guide you with setting up your bookkeeping system all the way through maximizing your results and understanding your financial statements. I keep it simple; you’ll focus on the tasks that need to be done and create accurate and timely financial data so that you can stop wondering how your business is doing or wish you knew what your financial statements were saying about your business and I’ll be here to answer the questions you have along the way. I’ve helped hundreds of business owners through this process over the last 25 years, and I believe you have what it takes to do your own bookkeeping as well. You’ll gain confidence and clarity with each and every step, and as you see the progress you make with your business finances, you will reach a new ability to help your business grow.
The Strategic Bookkeeping Academy opens today, June 15th, 2022, and there will be a promotion for founding members from June 15th through June 17th, 2022. This is the only time I’ll ever hold this founding member promotion for the Strategic Bookkeeping Academy. I’m excited for you to join and start taking control & understanding your business finances. When you sign up in the first couple of days the program is open; you’ll save $500 and get lifetime access to the program. So, if you want more information and be eligible for the promotional price, if you can’t wait to join, or are curious to learn more about the Strategic Bookkeeping Academy for service-based business owners, you can join us by going to www.FinancialAdventure.com/SBA. I can’t wait to see you in the program. I’ll post links to this and other valuable resources for business owners and bookkeepers where you are listening to this podcast and in the show notes.
And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.
