by Sarah | Feb 13, 2025 | Bookkeeping Basics
What does the month of love and financial clarity have in common? Like any great relationship, your numbers need attention, care, and regular check-ins. If you’ve been avoiding your books or treating budgeting like a bad relationship, it’s time to shift your mindset and confidently embrace your numbers!
Building a strong, healthy relationship with your finances will help you reduce stress, make smarter business decisions, and create long-term success. How can you start loving your numbers this month?
Falling in Love with Your Finances: Why It Matters
Financial clarity does not come from glancing at your numbers once a year when tax season rolls around. Your numbers tell the story of your business. You can learn what is working, what is not, and what changes you need to make to grow your business sustainably.
A strong understanding of your financials can help you:
- Avoid surprise expenses and cash flow issues.
- Make informed business decisions based on data (not guesswork!)
- Plan for future investments in your business.
- Allows you to focus on growth and reduce financial stress.
In other words, when you love your numbers, they’ll love you back!
Keeping the Romance Alive: The Importance of Regular Financial Check-Ins
Just as a healthy relationship requires communication, so do your business finances. By maintaining a regular check-in schedule, you can proactively stay on track and catch potential issues before they become big problems, giving you a sense of control and confidence.
How to Maintain a Strong Connection with Your Finances:
Set a Money Date – Schedule weekly or monthly check-ins to review your budget, income, and expenses. Make it a non-negotiable habit!
Review Financial Reports – Regularly review all of your financial reports.
Track Outstanding Invoices – Ensure you’re getting paid on time and follow up on any overdue receivables.
Assess Business Goals – Are you on track with your revenue and expense targets? If not, what adjustments can you make?
You’ll build a healthy, profitable business by checking in with your books—without financial surprises!
The Most Important Numbers to Track: Love The One You Are With
If you want to love your numbers, you need to understand them. Here are the key financial metrics every business owner should track:
1. Revenue (Total Income)
The total money your business brings in before expenses is known as revenue. Tracking revenue trends helps you:
- Set realistic income goals
- Identify peak and slow seasons
- Make informed pricing and sales decisions
2. Profit
Profit = Revenue – Expenses
Your profit margin shows how much money your business keeps after expenses. If your revenue is high but profit is low, it’s a sign you might need to adjust spending.
3. Cash Flow
Cash flow measures the money moving into and out of your business. A positive cash flow means you have more money coming in than going out, which is a key sign of financial health!
4. Expenses & Overhead
Track your monthly spending:
- Fixed expenses – costs that remain the same over time. (rent, software, salaries)
- Variable expenses – costs that fluctuate monthly. (marketing, supplies, client services)
- Unnecessary spending – costs that are not essential to your basic needs. (subscriptions, underutilized tools)
5. Accounts Receivable (Outstanding Invoices)
When clients do not pay their invoices on time, potential cash flow is sitting in limbo. Proactively following up with unpaid invoices ensures you get paid and lessens financial strain.
6. Budget Review
Are you following your budget, under budget, or overspending? Compare your projected spending with the actual monthly expenses. You can then identify areas where you may need to make corrections.
7. Taxes & Savings
Nobody likes a surprise tax bill! Set aside money each month to cover estimated taxes and build an emergency fund for unexpected costs.
Budgeting: Your Business’s Love Language
A budget doesn’t mean restricting spending. It gives your business direction and stability, which leads to financial clarity.
Instead of viewing budgeting as drudgery, consider it an act of love that ensures your business stays strong and financially healthy.
A firm budget helps you:
- Set realistic financial goals
- Prevent overspending
- Allocate money for business growth (marketing, hiring, training)
- Avoid end-of-the-month financial stress
If you don’t have a budget yet, now’s the perfect time to create one!
Recognize Business Finance Red Flags
If you’re only looking at your numbers when it’s tax season (or when something goes wrong), your relationship with your finances might need some work!
Warning signs your finances need attention:
- Avoiding financial reports because they stress you out
- Not knowing where your money is going each month
- Cash flow issues catching you by surprise
- Overdue invoices piling up
- Not having a budget or financial plan
The good news? It’s never too late to rebuild a healthy relationship with your business finances!
Show Your Numbers Some Love This Month!
Ready to build a strong, stress-free relationship with your business finances? Here’s your action plan:
- Select an accounting system to maintain your records.
- Schedule a money date every month to review your numbers.
- Track the key financial metrics listed above.
When you take control of your numbers, you gain confidence, clarity, and the power to grow your business efficiently. This empowerment is a love story worth investing in!
Loving your numbers doesn’t mean you have to handle them alone!
At SAP Virtual Resources LLC, we help business owners achieve financial clarity by:
- Staying on top of bookkeeping without being overwhelmed.
- Creating and managing budgets for long-term success.
- Tracking critical financial metrics and cash flow.
- Ensuring financial records are up-to-date and tax-ready.
We make it easy for you to understand and manage your business finances so that you can focus on what you do best. Contact me to learn how we can help you achieve financial clarity.
by Sarah | Sep 13, 2024 | Bookkeeping Basics
Filing an annual report with your Secretary of State is a straightforward task. Your business must file many reports, including income and payroll taxes, as well as federal and state taxes. However, an annual report is often overlooked.
Many states require filing an annual report with the Secretary of State. Although it may seem like a minor administrative task, not filing can have significant consequences.
What is an Annual Report?
In most states, the Secretary of State requires filing an annual report. The information required provides up-to-date information about your company. It is the state’s way of ensuring you are still operating and legally maintaining everything.
Why does this matter? Keeping the state informed about your business’s status helps you stay in good graces. Filing your annual report on time is a great start.
Timing is Everything
When it comes to filing deadlines, every state has its own rules. Some states require the report to be filed on the anniversary of your business’s formation, while others have a set date every year. Missing the deadline can cost you. It’s essential to know your state’s filing schedule. Check your Secretary of State’s website. You can find a list of all states in this report.
What Happens if You Don’t File?
I get it—life happens. The annual report deadline might slip through the cracks. But missing the filing date can lead to more than just a slap on the wrist:
Consider this the state’s way of reminding you to file with a price tag attached. Late fees are an unnecessary expense you could easily avoid.
Securing loans, permits, or contracts may be challenging when one loses one’s good standing with the state, significantly hindering growth.
- Dissolution of Your Business
In extreme cases, the state can dissolve your business without your knowledge. Imagine discovering that your company no longer exists. Reinstating a dissolved business is a long, frustrating, and expensive process. It’s much easier to stay compliant from the get-go.
The Benefits of Staying Up-to-Date
Here is the positive side of being proactive with your annual report filing:
Depending on your state, filing your annual report may be non-negotiable. Staying compliant means your business can continue to operate without any legal hiccups.
- Avoid Unnecessary Penalties
Why pay more than you have to? Filing on time keeps extra fees at bay and saves your hard-earned money for where it matters—growing your business.
You can continue business as usual when your business is in good standing. You’ll have no problem applying for loans, renewing permits, or working with contractors. Plus, you won’t have to worry about sudden legal barriers.
Keeping up with your filings lets you focus on your best work without worrying that something’s fallen through the cracks.
How to Make Filing Your Annual Report Easy
With some planning, you can make filing your annual report a seamless part of your yearly routine. It’s a straightforward process that, when done right, can give you peace of mind for the rest of the year.
Implement a system to remind you well before the deadline, whether with a calendar, a project management tool, or even good old-fashioned Post-it notes.
Each state has different filing dates, so mark your calendar! To avoid any last-minute surprises, verify the due date for your annual report on your Secretary of State’s website.
Throughout the year, make sure your business records (addresses, officers, etc.) are current. This will make filing your report a breeze when the time comes.
If you need clarification on filing the report, consider hiring a professional. Having the reassurance that it is correct can relieve stress.
A Little Effort Goes a Long Way
As a business owner, you must comply with your annual report filing. It’s a small task with significant consequences if overlooked. You can stay compliant by being proactive, staying organized, and leveraging professional help when needed. So, stay informed, file on time, and focus on growing your business.
If you need help filing your annual report, please don’t hesitate to contact me. I’m here to assist you in this essential task. Schedule a call to learn more.
by Sarah | Jun 11, 2024 | Bookkeeping Basics, QuickBooks
If I have my bank accounts linked in QuickBooks, do I need to reconcile them?
Yes, you should be reconciling at least your bank accounts monthly. The biggest reasons are:
- Detect Fraud: To catch fraudulent charges as quickly as possible and report them to your bank, you need to be able to notice those charges. If you are not reviewing and reconciling your accounts with the bills you’ve entered into QuickBooks (or whatever accounting software you use), you can miss them. This is especially true if you run a lot of smaller or similar-priced transactions through your business.
- Catch Bank Feed Errors: Your bank feed can contain errors. I’ve seen accounts become unlinked and transactions not load. Recently, a client’s credit card charges were uploaded twice—once for the day the credit card was run, and again for the day it cleared the account. Your accounts and financial reports will tell you the wrong information without reconciling the account to catch these issues.
- Correct Human Errors: You can add human error if you write out your checks instead of printing them from your software and then typing the amounts into your accounting system. Reconciliation can help you find that $154 check that was keyed in as $145. The rule of thumb is if you’re off by something divisible by nine, it’s probably two numbers switched around. Sometimes, the error could also be on the bank’s side where something is misentered. You need to contact your bank to correct the information promptly.
- Ensure Tax Compliance: Incorrect numbers in your records can affect your tax reporting. Incorrect transactions could cause you to overpay or underpay your estimated or sales taxes.
- Avoid Overdrafts: Missing expenses in your bank feed can lead to spending money you don’t have, resulting in fees and penalties. This can especially happen if your cash flow is tight.
- Maintain Accurate Financial Statements: Having incorrect financial statements can cause you to make inaccurate assumptions about your current business finances and could lead to choices that cause issues in your business.
By regularly reconciling your accounts, you can rest assured that your financial records are accurate and up-to-date. This provides a solid foundation for managing and growing your business, giving you peace of mind.
