Profits matter more than sales, imagine that! Here are a few common questions we get on the subject:
Why is it important for a business owner to know their finances?
You need to know where you are to know where you’re going and reach your goals. Once you know your numbers, you can make adjustments (or keep doing what you’re doing) based on if you’re meeting goals.
It’s one thing to know your sales. It’s a whole different thing to look at everything – profits, revenue, etc.
What’s the difference between sales and profits?
You can think of sales as the revenue that your business is bringing in. Profits are how much you make after expenses are taken out. You’re only looking at part of the equation if you solely look at sales.
How do I keep track of this?
There are a lot of options. I love Xero! It’s easy and perfect for those who are doing their own business bookkeeping. An added bonus is their killer customer service.
What does a bookkeeper do and what’s the process like?
First, we connect on a call. If we decide that we’re a good fit, we will onboard and start getting into your systems and pulling statements. If there’s a cleanup needed, we take care of that first. On a monthly basis, we go in and code everything and run reports. We can also handle sales tax and other bookkeeping tasks – it is totally custom business to business.
If you are winning, we’re winning. Because we’re in a number of different businesses, we have tons of knowledge to help you with anything that comes up. Sure you can Google for a few hours, but wouldn’t it be smarter to spend that time doing money-making tasks?
I’m afraid of being judged and feel like I should figure it out myself…is that normal?
It’s a very vulnerable position for sure. There are so many safeguards built in and these relationships are built on trust. That’s what I stress the importance of finding the right bookkeeper for you.
With that said, we’re not here to judge you and how you spend your money. We’re here to help you. This is what we love to do and you’re here to do what you love to do and when we bring those together, it’s an awesome mutually beneficial relationship!
What are a few things business owners can do today to start increasing their profits?
- Start getting acquainted with your numbers! Know them yourself or have the help of a bookkeeper. Know them. You need to do this to maximize your profits.
Let’s say you have subscriptions for your business. Look at those and audit what you need and don’t need.
- Increase your sales. How can you spend your time wisely and increase pricing or client load?
- Project out your income and plan accordingly
First steps to start bookkeeping:
- Sign up with software like Xero
- Have a monthly review of your numbers. Categorize your transactions.
- Organize your receipts
- Keep things separated – business and personal. Don’t skip this.
- Start setting up a cash reserve, separate from your tax reserve
- Create a BUDGET. It’s important to know where your money is going.
There’s so much fear and emotion around money but taking control and removing that emotion helps our business grow and increase our ability to serve others.
You’ve got this! We want to empower you to take control of your finances and have a solid money mindset.
Want to work together? Hop on a call and let’s chat about your business!
To learn more on the topic, check out my guest appearance on The Kenza Pod.
The content in this blog post is provided for general informational purposes only and should not be considered professional tax or legal advice. The author is not a Certified Public Accountant, and no assurances can be made regarding the outcomes or consequences of tax returns, IRS actions, or any financial decisions based on this information. Readers are strongly advised to consult with a qualified tax professional or legal advisor for personalized guidance specific to their individual circumstances. The author expressly disclaims any liability for decisions made based on the information presented in this blog post.