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We work with small business owners and entrepreneurs. Some are seasoned, others are just growing their side hustle. Their skills are varied and they have a wide variety of talents. We often get asked to explain the ins and outs of financial reports and have found that providing our favorite clients with a working knowledge of accounting terms is helpful. With that end in mind, we’re sharing that expert knowledge with you. So if you’re looking to get a better grasp on your small business books, want to understand your financial reports so you can make better business decisions, or even are just starting out and want to do it right… you can check out our word of the week and start expanding your working financial knowledge.
An income statement is a report of your business’s profits and losses over a specific period of time. You might also hear people refer to this report as a profit & loss statement or a P&L. When it comes to financial reports, an income statement is one of the 3 main reports you’ll want to review on a regular basis. The reports you’ll want to have on hand are:
One of the main things your income statement shows you is the profitability of your business. It outlines your business’s sales and net income or loss after accounting for your expenses. You may have heard people say something about the “bottomline” – well, this is the report they’re referring to. The bottom line on the income statement tells you if you have a net income or loss for the time period the report covers.
You may be thinking this is all fine and good, but what are you supposed to actually do? Well, that’s a good question that definitely deserves an answer. Seeing an income statement, or multiple statements that cover consecutive or year after year time periods will help you pinpoint what is making your business profitable or have a loss. You can also use your income statements if you’re looking to secure a loan or investors for your business. The biggest help comes when you look at multiple statements and can track the financial activity for your business. You can see if you have seasonal slumps, and even figure out if you need to take a look at and adjust your budget to improve your overall financial health.
Self Employment Tax. If you’re a new business owner or you’re looking to DIY your taxes this year you’ve probably got questions regarding your self employment tax and whether you should file it on your gross or net income. We’ve got the answers below.
Figuring out the ins and outs of taxes can be tedious if you’re a small business owner. Standard or line-itemed deductions, self employment tax, and a myriad of other accounting terms are frequently asked questions around our offices by clients who are trying to get ahold of their financial standing and file their taxes. Then you add in the rush of the tax season and that looming deadline when all paperwork needs to be in to the IRS and the idea of taxes and those detailed forms can bring outright panic.
If you’re looking to DIY your taxes, we’d still like to help. And we bet you’d be more than happy for a little bit of FREE expert advice right? You’ll find quite a few important articles here on our blog, but if you’re looking for answers as to the differences between gross and net income and how to figure your self-employment tax, we’d be happy to oblige.
If you have specific tax questions and would like to chat – we’d love it if you dropped us a line. If you’re looking to learn more about self employment tax and how to handle it for your taxes this year, you can read more here.
It goes without saying that starting a business means you’re probably fairly good at DIY. DIYing is one of the best ways to save money when you’re starting out, and most small businesses don’t have terribly difficult taxes (to begin with).
But as your business grows, it’s time to start thinking about how to outsource so that you have time to focus on your passion – the reason you started it all in the first place. When it comes to taxes, hiring an expert will not only save you time, but it usually also saves you money. And that’s a huge win for a lot of small business owners who are seeing a lot of growth.
So how do you tell if you need help on your taxes or not? We’re glad you asked.
If you’re not itemizing your tax return and there isn’t anything too complicated going on with your finances, then it’s probably ok to just keep plugging and chugging with your tax software of choice. If you are looking to itemize your taxes, you haven’t been as consistent at bookkeeping as you probably should be (meaning that you have to make up a month or two or more!) or you’re looking to create more of a strategy when it comes to your financial plan then hiring an accountant is the right choice.
It’s true that we have plenty of clients that understand it all, but have chosen to enlist our help with their bookkeeping and taxes. Most of them find value in outsourcing to us because it saves them time and stress. However, if you find that you have more questions about what exactly the software is talking about or you find yourself googling a bunch of terms, it’s probably a wise bet that an accountant will not only make your life easier but make sure that you stay out of the IRS’s scrutiny as well.
If you’re looking to seriously grow your business or you’re wanting to take your side gig full-time, then hiring an expert is a good idea. With an expert you’ll get detailed reports and the information you gain there will be key in your success.
It never feels like there’s enough money, but if you’re constantly worrying about the fact that you don’t have enough or you feel like you pay a ton come tax time, then it’s time to talk to an accountant. You might not be taking all your deductions, haven’t filled out the forms properly, or aren’t really being as profitable in your business as you think you are. Getting help with your taxes will be the first step in setting your business up for financial success and at the very least, you’ll probably be able to get a better tax return.
Is it time to get help your taxes? If so, we’d love to chat.
Small business owners wear lots of hats. You’re a marketer, a creator, a production assistant, a salesman, and you’re also in charge of bookkeeping. Bookkeeping may not be the most exciting aspect of your business, but it’s pretty important. If you’re looking to learn how to up your game, you’ll find 4 habits below that will help you increase your bookkeeping skills and help you see your business grow.
It’s sage advice when it comes to creating habit, consistency is key. We’ve found that the most practical advice we can give when it comes to staying on top of your finances is to be consistent in overseeing them. We get that it might not be fun (although as accountants we might beg to differ) but getting into your financial on a regular basis will turn results faster than anything else. Depending on how much financial activity is happening, you may be able to go longer, but on average most small businesses should be working on their books weekly.
Set aside a specific day, time, and even place for reviewing your finances and making your books current. Sometimes that means coming in early or staying late at the office, or maybe you take your books with you to a favorite lunch spot or cafe. No matter what, start looking at this appointment as a moment where you can get a realistic snapshot of how your business is doing rather than just another hour where you’re forced to crunch the numbers.
This habit is probably a no brainer, but you’d be surprised how often we hear new clients tell us that they’ll have to “look into that”. When we hear that phrase, we know that it probably means they’ll be searching around their office, digging in their filing cabinet, or scrolling through their inbox trying to drum up whatever invoices, paperwork, or receipts we’ve requested.
Putting all your receipts, invoices, & other financial records in one spot makes life easy. If organization is your thing, you might even try color coding the different paperwork types with folders, tabs in your inbox, or even the good old sticky note.
It’s not just enough to open up your files and review your cash flow. We get that the most tedious part of the job is recording and categorizing transactions, but it’s what will show you where your money is going and that’s what makes your business tick. Keep a folder if you’re got physical papers from transactions or merely note in your book the week you’re recording and then reference where the receipt or invoice can be accessed fi you’re working online.
Once it’s logged, don’t toss it just yet. Keep all paper work, both physical and digital in an easy to access, and labeled, location. You’ll need it come tax time and will want to hang on to it even longer so that you have it on hand in case you’re audited by the IRS.
You’ve logged. You’ve categorized. You’ve looked at the cash flow. But now it’s time to put a little elbow grease into creating a strategy. If you’re new to bookkeeping you’ll spend the first few months just looking at what categories seem to have the highest expenses and which seem to bring in the most cash. Once you’ve got a handle on that, it’s time to start forecasting a bit. Review your invoices and future expenses. Are there months where you can push more sales? Can you last longer without ordering more supplies? The answers to these questions and more come through reviewing your invoices and expenses. So start looking at your books like you’re having a brainstorming session for growing your business. Then you can look to see if your new ideas are working in the months to come!
What other tips or habits do you find useful when it comes to bookkeeping for your small business? We’d love to hear them in the comments.
1. Why is consistency important in bookkeeping? Consistency in overseeing finances yields faster results. Set a dedicated day, time, and place weekly to review your finances for a realistic business snapshot.
2. How can I streamline receipt and paperwork organization? Centralize all receipts and financial records in one spot, employing folders, color-coding, or digital tabs for easy access and organization.
3. Why is recording and categorizing transactions crucial? Recording and categorizing show where money goes, vital for business. Maintain a folder for physical papers or note details for digital records, essential for taxes and audits.
4. What’s the significance of reviewing invoices and expenses? Beyond logging and categorizing, analyzing expenses helps strategize. Evaluate high expenses, profitable categories, and forecast future cash flows for business growth strategies.
5. Any additional bookkeeping tips for small businesses? Share your useful bookkeeping tips or habits in the comments to foster a discussion on effective small business financial management.
In the world of business “highly efficient” and “super productive” are more like super powers than they are a skill set. If you’ve been in business long, you know that there’s an advantage to increasing your work flows to gain more of either of these descriptive words. They often equate to more clients, more sales, and more money. For small business owners, growing your biz is not only a dream it’s your passion so focusing on efficiency and productivity is pretty important.
You’ve also probably heard the phrase, “too much of a good thing” and when it comes to increasing the business super powers mentioned above, that might just be the case. Here are 3 efficiency tactics that are actually wasting your time.
It happens to all of us. We’ve worked hard to grow our business or build our career and that often means that vacation is pushed to the wayside. In a world where technology lets us stay on top of all the things, all the time – it’s easy to let work rule. Just like there’s buzz about efficiency there’s also buzz about “sharpening the saw” so we pencil in those vacation days and tell ourselves that we’re taking the time off so we’ll be better at work. Without fail, that vacation gets shortened or even worse, we take it but still try to tackle some work projects during those days off.
Working during vacation is a no-no. You may feel the quiet of your vacation schedule and think jumping into your emails or checking status on projects won’t hurt, but it does. Vacations are only restful if we actually rest. So when you’re poolside, turn the ringer of your phone off, ditch your laptop before you hit the beach – we’d even recommend leaving it at home! Take your vacation time as a moment not only to rest but to fuel your creativity – do things you wouldn’t normally do, try a new activity, mark something off your bucket list – it won’t only give you a chance to recharge, it will inspire you.
It’s 9AM on a Sunday morning and you hear your cell phone ding. Our hope is that it’s a friend or relative with a last minute brunch invite, but more often than not it’s a co-worker or boss getting in a little extra work on the weekend. Whether you’re the boss or the employee, working on the weekend or other days off hinders productivity rather than helps it. It gives the impression that you’re always available, and although that might seem like a good thing, it actually just shows that you might have problems managing your time.
When you’re at work, work. When you’re at home, be home. If work is your life, even on the weekends and those banking holidays that you’re lucky enough to get off, consider picking up a hobby or planning an outing with family or friends. If you’re worried about what others might think, make it a habit to come in early Monday morning, mention to your boss or co-workers that you’re working to be more thoughtful and focused both at work and home and that you won’t be answering emails until the work week starts again. Believe us, you’ll be more productive and focused and you’ll enjoy both your work week and weekend more.
Doing all the things all the time isn’t efficiency, it’s just crazy. Technology is great and there might be those that tell you that multi-tasking is the way, but they’ve been duped by the promise of doing more in less time. Tasks take the time they take, and there are plenty of studies (not to mention it’s just plain common sense) that focusing on one task at a time will not only get it done faster, but better as well.
Instead of getting caught up doing all the things, make a list, prioritize and even consider setting a time allotment for each task. You’ll be surprised how much faster you get things done when you only have 20 minutes to do it.
What other tactics have you tried to help you be more productive? Did it work? We’d love to hear in the comments.
1. Why is working during vacation detrimental to productivity?
Working during vacation prevents you from fully resting and recharging. True relaxation requires disconnecting from work, which in turn fuels creativity and overall productivity when you return.
2. How does working on days off negatively impact efficiency?
Working on days off blurs the line between work and personal time, leading to burnout and reduced overall productivity. It’s important to maintain a clear separation to ensure you are fully rested and ready for the work week.
3. Why is multitasking considered counterproductive?
Multitasking spreads your attention thin, leading to lower quality work and slower task completion. Focusing on one task at a time increases efficiency and improves the quality of your work.
4. What are the benefits of prioritizing tasks instead of multitasking?
Prioritizing tasks helps you focus on the most important and urgent work first, ensuring that critical tasks are completed efficiently and effectively. This approach also reduces stress and enhances the quality of your output.
5. How can I make the most of my vacation and days off to boost productivity?
To maximize the benefits of your time off, completely disconnect from work-related tasks, engage in activities you enjoy, and try new experiences. This not only helps you recharge but also sparks creativity and fresh perspectives when you return to work.
Anytime is a good time to get your business into financial shape. And no matter what your financial shape is, it’s never a bad idea to review where you are and set some goals as to where you’re going. Today we’re sharing some top tips for getting your business finances in order, and how to keep them there.
It goes without saying that organized finances make life easier, especially come tax time. But that doesn’t always happen when you’re running a small business and are a jack of all trades. When it comes to organization, simplicity is usually the best option. Don’t spend a ton of time searching for elaborate methods or strategies but just get down to the basics. We’d recommend establishing a system for tracking expenditures and the money you receive, if you haven’t already. Then set aside time each week or month to review and organize these transactions.
If you’ve already got that part established, then look to the future. Take a few minutes and sketch out what big ideas or projects you have that might need extra cash. Mapping out a plan is the easiest, and surest way to get there – then all that’s left is to put the plan to work.
There are lots of options when it comes to how you do your bookkeeping and taxes. Whether you hire a professional bookkeeper, track expenses on your own, or use one of the many different financial software options that are out there it’s always a good idea to do your homework and make sure you have the right fit. Even if you already have a system in place, it’s never a bad thing to review what you have and what your needs might be. When your needs change, it’s time to consider your options and then make sure your most important needs are met.
Looking for other tips on getting your small business financially fit, you can read more here…
Why is staying organized crucial for small business finances?
Staying organized simplifies financial management, especially during tax season, and ensures accurate tracking of expenditures and income. Establishing a basic system for recording transactions and setting aside regular review time helps maintain financial clarity.
How can small business owners plan ahead effectively?
Small business owners can plan ahead by mapping out future projects or financial goals that may require additional funding. Creating a clear plan allows for strategic allocation of resources and facilitates progress towards long-term objectives.
What factors should be considered when choosing financial software or hiring a bookkeeper?
Considerations when selecting financial software or hiring a bookkeeper include the complexity of your business’s financial needs, budget constraints, ease of use, and compatibility with existing systems. It’s essential to research and assess options to ensure the chosen solution meets your requirements effectively.
Why is it important to periodically review your financial management methods?
Periodic reviews of financial management methods help ensure alignment with evolving business needs and technological advancements. Assessing current practices allows for adjustments or upgrades to better support efficient financial operations and decision-making.
Where can small business owners find additional tips for improving financial fitness?
Small business owners can explore resources and articles dedicated to financial management, accounting best practices, and business finance strategies. Engaging with reputable financial advisors or consulting industry-specific publications can offer valuable insights for enhancing financial fitness.
Whether you’re looking to set some goals or are thinking to up your game at the office we’ve got 3 habits that you should quit doing at the office – pronto. Changing habits is hard, but doing so can cause sparks that will ignite major change. Who wants to shake things up for the better? You do.
Remember that movie from the 80’s called Never Ending Story? We do too. Well, the never ending story of your childhood has turned into the never-ending quest to get your inbox to zero, and it’s not doing you any favors. For some reason we often hear that success comes from having things done, finished, perfect. Many workers feel like they’ve succeeded when their inbox is at zero – that they can now put up their feet and call it a day.
The problem? The inbox continues to fill up again and again and your efforts start to seem pretty trivial. In fact, cyclical jobs, like answering emails, can turn into projects that add unnecessary stress. So we say ditch the goal to empty that inbox.
If you do feel like you’ve got to dig in and tackle the inbox make a goal that says you’ll spend a good 30 minutes at the beginning of everyday in your inbox, or better yet, set up a strategy that you’ll take care of minor emails immediately and delete them and not look at your work email over the weekend – then stick to it. You’ll find your productivity increases and your feelings of failure, when you open a full inbox, fade away.
It’s easy to do. Back in our parents day office talk happened around the water cooler or in the break room. Nowadays it can happen everywhere, popping up on your computer in a chat window, showing up in your inbox, and dinging on your phone as a text message.
The amount of communication between co-workers has definitely increased and that often leads to less work getting done. When it’s really a problem is when the talk is negative. Negative thoughts never helped anyone and it’s obvious that such thoughts make coming to work a chore. In addition, negative comments between or about co-workers make it more difficult to get things done.
If you’re looking to increase your productivity, enjoy your job more, and be an employee that your boss can count on to work with just about anyone – start avoiding the negative talk in the workplace.
When it comes to talking success in business you’ve probably heard that “all successful people wake up before 5 a.m.” right? If you’re a night owl then, it looks like you’ll never be a CEO and probably not even that successful in your career.
Wrong.
When it comes down to it, our sleep patterns and circadian rhythms are quite possibly genetic. Meaning that our internal clocks aren’t something we can so easily control or force to fit a certain schematic. If you’re a night owl you might find that it’s easier to get things done with an extra hour late in the evening where others find that early mornings are when they’re most productive. A recent scientific study shows that our modern-day sleeping habits may be ancient survival tools. In the days when people lived in groups or tribes, a variety of sleep patterns meant that at least 1 person would be up and alert to protect the tribe – and that means that every person was important.
Instead of crossing that dream of being a CEO off your list because you’re a hardcore night owl, use your skills to your advantage. Stop fighting your internal clock (waking up early if you’re a night owl or staying up late if you’re an early bird) and start using your strengths to your advantage. Take a look at your day and then put tasks where they make the most sense for you – of course maximizing your productivity and creativity. Once you accept what you are and then use it to your advantage you’ll find that your success will follow.
What other habits, good or bad, would you add to the list? We’d love to hear your ideas in the comments.
Why should I stop trying to get my inbox to zero?
The quest to get your inbox to zero can be never-ending and stressful. Instead of striving for an empty inbox, set a manageable goal like spending 30 minutes a day on emails or handling minor ones immediately. This approach reduces stress and boosts productivity by preventing the feeling of failure when the inbox fills up again.
How can avoiding negative talk at the office improve my work environment?
Negative talk can create a toxic work environment and decrease productivity. By avoiding negative conversations, you can foster a more positive atmosphere, enjoy your job more, and become an employee who is reliable and easy to work with. This not only benefits your mental well-being but also enhances overall workplace harmony.
What if my natural sleep pattern doesn’t align with the typical work schedule?
Everyone has a unique internal clock influenced by genetic factors. Instead of trying to conform to a typical work schedule, identify when you are most productive and align your tasks accordingly. For night owls, this might mean working later in the evening, while early birds might focus on early morning tasks. Utilizing your natural rhythms can enhance your productivity and creativity.
How can I manage my email more effectively without aiming for zero inbox?
To manage your email effectively, set specific times for checking and responding to emails, such as 30 minutes each morning. Prioritize urgent messages and delete or archive minor ones immediately. Additionally, avoid checking work emails over the weekend to ensure a better work-life balance and reduce stress.
What are some strategies to deal with negative coworkers?
To handle negative coworkers, try to steer conversations towards positive topics or simply excuse yourself from negative discussions. Focus on your work and engage with colleagues who have a positive outlook. If negativity persists, consider discussing the issue with a supervisor or HR for a more structured resolution.
It’s a new year and you’ve got a list of business goals that you’re ready to tackle. Not so fast though – you’ve got to prep & file income taxes! Maybe you’re ahead of the game and spent the last quarter of 2018 pulling it all together, or maybe you’re a tax expert and you’ve been following a plan and keeping things in order over the course of the whole year.
But honestly, most people fall into the third camp – the “oh yeah, I’ve got to get the tax stuff ready” group. So make things easy when it comes to the prep & file income taxes task. Here are our top tips and you can follow the link to grab a checklist (prepared by an actual accountant) so you can fast track your to dos.
Getting started with income taxes can seem daunting, but with the right approach and preparation, the process becomes much easier to handle. By understanding key concepts like deductions, credits, and tax filing requirements, you can ensure that you’re on the right path to managing your taxes efficiently. Whether you’re filing for the first time or are simply looking to improve your tax strategy, taking the time to plan and organize your financial documents will make a significant difference.
If you find yourself feeling overwhelmed or need professional guidance as you get started with income taxes, don’t hesitate to reach out for expert help. Vyde, the most trusted accounting firm in the U.S., is here to assist you every step of the way. Contact us today to ensure your taxes are filed accurately and with confidence!
