Reviewing your work
“Pathway to €5k Profit” – Reviewing your work (2 of 5)
Talking to entrepreneur and business owners, when it comes to numbers, there seems to be a race to the bottom. The Tax Bottom.
What do they owe in taxes?
I want to change that narrative – because if that is you – you are missing the point.
The point of the numbers
One of the main reasons why bookkeeping is so important, is to find out what the profit (or loss) your business is making. Unless you keep a proper record of all your business transactions, it is not possible for you to find profit or loss that your business is making.
Understand the progress of business
Bookkeeping helps you understand how your business is progressing. To determine the progress of your business, you need to compare this month’s sales with last month’s sales, this month’s spending with last month’s spending. Did you make a profit or loss each month, if not do you know why the numbers are changing? Unless you record and review your numbers, you will not know this and you will not be able to make changes in your business based on actual trends.
How much are you owed?
I know it is exciting when you get a new customer or make a new sale, its often tempting to think that we will be able to remember this in our heads. At least you will know who has paid you and who has not right? With everything you need to remember to run your business it would be easy to forget things. Having a time and space to allow you to review your bookkeeping gives you the space to keep on top of customer payments and contact those that need a bit of a reminder.
How much do you owe?
The same can be said for the money that you owe. Nowadays we often pay before we receive the service, which can have its own challenges (see below re subscriptions), however, you want to make sure that you do not forget to pay a supplier that you do not have that agreement with. One of the biggest challenges for small businesses is to get paid on time. See here for tips on getting paid. Knowing which of your customers pays on time, which are slow and which need reminding can help you put in place the right process that help you get paid on time.
Getting practical…
Take out the expense/supplier sheet that you prepared for Series 1 ‘Getting Started’ look at the numbers of the items you have collected. Work through the sheet and find out:
- Are there any duplicate subscriptions you are paying for?
- Are there subscriptions that you no longer use?
- Have you collected all of your receipts and included them?
Get out your Sales Sheet:
- Have you recorded (and invoiced) all of your sales?
- Have all of your customers paid you?
Get our your bank statements:
- Get out your bank statements – anything in there that you do not recognise?
- Anything on your bank statements that you have not included in your expenses/supplier sheet?
- Anything on your bank statement that you have not included in your sales sheet?
Creating a routine
You are more likely to keep on top of your bookkeeping and understand the numbers if you put aside a bit of time each week to do your paperwork. If you can make it the same time each week, you are more likely to form a habit.
The more you do your bookkeeping the more likely you are to see patterns and trends in your business. This helps you make better decisions.
This is why I have created #FinanceFriday coffee morning in my Facebook group.
Ideally spend 30 minutes on your accounts from 10.30 – 11.00 and then join me (details below) for a coffee and a chat. I love getting feedback and questions so if you are having any issues, #FinanceFriday is the best place to catch me.
As always I am happy to help, so get in touch:
Grab a FREE 15 minute consultation here
Join my Facebook Group here or
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If you have questions or comments, I’d love your feed back, contact me here.
I hope you are living your best life.
Till next time.
