Kayla Caldwell
If you're a business owner, you probably chose your profession based on what you're good at – creating fitness programs, graphic design, baking, etc. – not to be a bookkeeper. Accounting knowledge is crucial for financial success, yet entrepreneurs don't automatically have it.
At KC Virtual Bookkeeping, we help business owners close that knowledge gap using Quickbooks Online and Profit First Strategies. Here are some tips that will boost your books.
1. Automate your bookkeeping
Going through all your statements every single month is tedious. So have them feed into a bookkeeping software like Quickbooks Online. This way, you can either make rules for recurring expenses or file an individual transaction to the correct tax write-off bucket. This will also help you understand how much of your income is going to expenses instead of directly into your pocket!
2. Make a list of all your recurring expenses
Now that everything is categorized and easy to find, make a list of all your expenses and mark if they are recurring monthly or annually. This will help you calculate the minimum monthly income you will need to cover your expenses for the entire year.
3. Don’t justify your expenses
Now that you have your list of recurring expenses, cancel anything you are not using. Do not keep something you use once a year or aren’t using yet just because you got a discount. The trick is to only pay for what you are using and maximize the utilization of the apps that you’re already using. No need to pay for two things!
4. Take control of your time by outsourcing
As business owners, one thing that quickly disappears is our time. The easiest way to gain that back? Outsource. It’s amazing how sometimes spending money can actually make us money. For example, if you outsource your bookkeeping and gain back 3-4 hours a month, you’ll have time to focus on the things that will grow your business.
5. Start putting your Profit First
This is the most important point – change the way you think about profit. Rather than the conventional approach of “sales (minus) expenses = profit,” flip the equation. “Sales (minus) profit = expenses!”
The reason is simple — you started your business to make money, not create a cash-eating monster. So pay yourself first then get creative with what's left over. The easiest way to do this is to determine a percentage to pay yourself, save for profit, save for taxes, and then budget for expenses with whatever remains. Then, look at your monthly expenses and determine whether you need to increase your income to cover them, or cut some of them.
These are obviously high-level tips with a lot of tiny steps involved. If you are looking to learn more, I’ll be speaking at the NCET Biz Cafe on May 15 at 2 p.m. Pop by to learn more!
NCET is a member-supported nonprofit organization that produces educational and networking events to help people explore business and technology. More info at www.NCETcafe.org.
Kayla Caldwell is owner & profit strategist at KC Virtual Bookkeeping LLC, (kcvirtualbookkeeping.com) and she helps business owners declutter the overwhelm around their finances so they can grow their business with confidence.
