Dec. 16, 2024
2: Financial Systems Check: The Financial Framework for Business Success
Building Financial Fitness for Your Business: Essential Systems and Practices
In this episode, we explore the fundamental financial systems every business needs to thrive. Starting with the basics of bank accounts and credit card management, the discussion covers the importance of segregating business and personal finances. Learn about the benefits of keeping clean records for the IRS, understanding key financial statements, conducting regular financial reviews, and implementing effective tax planning strategies. Additionally, gain insights into setting up a cash reserve, mastering cash flow management, and leveraging accounting software to optimize your business operations. Whether you're a new business owner or looking to refine your financial systems, this episode is packed with practical advice and actionable steps to strengthen your financial foundation.
00:00 Introduction to Financial Fitness for Your Business
01:01 Our Financial Journey: Lessons Learned
02:01 Setting Up Essential Financial Systems
02:36 The Importance of Separate Business Accounts
05:48 Choosing the Right Accounting Software
06:29 Regular Financial Reviews and Tax Planning
12:38 Building and Managing Financial Reserves
16:16 Mastering Cash Flow Management
22:25 Final Thoughts and Next Steps
Links:
Financial Clarity Program
Energetic CFO Website
Book a Call with Tiffany
Transcript
WEBVTT
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Do you feel like your business is financially fit?
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Are you actually confident in the systems and processes in place in your business and feel like they get you where you need to go in this episode, we're going to dive deep into the essential financial systems.
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Every business needs to thrive from setting up bank accounts to managing cashflow.
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We'll cover it all.
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Get ready to strengthen your financial foundation and take your business to the next level.
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Welcome back.
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When Eric and I first started our businesses, We didn't really have any idea what we were doing from a financial perspective.
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I, fortunately, I had the undergraduate education, well, and I had my master's in finance at that point.
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I knew corporate finance, but it's just us and a couple rental properties.
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We don't need to do all that stuff, right?
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Yeah, you do.
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Maybe not all of it, but you need to have some systems in place, and we learned over time definitely learned through the school of hard knocks and found things that worked for us over time.
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So my goal in this is to share some of that so you can shortcut it.
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And realistically, you probably don't have a master's in finance.
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So let's take all of my knowledge from the traditional finance perspective and in the practical world of running a business and combine all of that to help you create the financial framework your business needs.
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So if you're a new business owner, or you're looking to improve your financial systems, then this episode is absolutely for you.
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I just want to start with recognizing you wherever you are.
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I have talked to people who, you know, they have all the things.
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They have the QuickBooks account, they're uploading receipts every couple days, or every day.
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They're doing everything by the book, what they should do.
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And then I've chatted with people who, you know, don't have books at all.
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They pull from all their different bank accounts at the end of the year and send that to their CPA with a box of receipts.
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And that's how they do their financials.
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So wherever you are in that scale, cause it's a pretty wide range of positions.
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That's okay.
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We're going to meet you where you're at.
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So let's just start with the number one fundamental, having bank accounts and credit cards for your business.
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You want to make sure that you're making it easy on yourself.
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Make sure that you have the right bank accounts.
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And by right, have all your business stuff flow through a business bank account, have all your personal stuff flow through a personal account.
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The way I like to look at it, I worked as an employee in a corporation for 10 years.
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And.
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I did not have a debit card to go use their checking account to go buy stuff.
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So make sure that you're not doing that with your business and yourself.
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It is, they're two separate entities.
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They are two separate beings.
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And you don't have your neighbor's credit card, I'm assuming.
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Maybe you do, but if you do, good on you.
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But assuming you don't have your neighbor's credit card, the same would go with your business.
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When I am using my business card.
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I am not using it as Tiffany Vogel, a member of the Vogel family.
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I am using it as Tiffany Vogel, owner of whatever company I'm using it for.
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So it's almost like wearing a different hat or, I don't know, suit when you are using that card.
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So you want to make sure that you are keeping things separate and what that does for you.
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One, it makes you nice and clean for the IRS.
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They like to see you treating your business like a business from a legal perspective.
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There's this thing called piercing the corporate veil.
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And if you're not familiar with what that is, it's basically saying the asset protection you have and having an LLC completely goes away because you're treating it like a personal bank account.
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And then finally, it just makes it easier.
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So you can set up a QuickBooks online or other accounting system.
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Feel free to send me an email and I'll tell you all my favorite accounting systems, or you can reach out and schedule a call with me.
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There are some way cheaper options than QuickBooks out there.
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So just let me know if you want to chat about that.
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But it's so much easier when you can link your credit card, if you use credit cards, and your checking account straight in to that financial system, and we'll talk about that a little bit more in a minute, than trying to pick and choose what's personal and what's not.
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And full disclosure, Sometimes I use the wrong card and I, you know, forget that I'm paying for something for business.
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So I make a note of it and make sure that I get that into my book separately.
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You can also do a reimbursement to yourself.
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Write yourself a check in essence for the amount of that, like you were an employee.
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So in my corporate days, if let's say I drove my car and got mileage, the company would write me a check or put it as a separate payroll for that mileage.
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So it was easy to track that line item.
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So just make sure you're doing that.
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That's probably the cleanest way you could, you know, just manually throw it into the books as a personal expense that you paid for out of pocket.
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But.
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Really the cleanest way is to transfer that money, but you want to make sure that you're keeping your business finances separate from your personal.
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It's just clean, it makes life easier, and sets you up for success.
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Because at the end of the day, we are running businesses, this is not a hobby, this is not a personal thing, it is a separate entity, and you want to treat it that way.
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So next accounting software.
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There are so many things out there you can use, and it's really just finding one that works for you.
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We use different ones in our business, just depending on the nature of the business are real estate.
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We've used several.
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And then we used other ones for our non real estate businesses because the nature of real estate is just very complex and different.
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So find the one that works for you.
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And then make sure you're linking your bank accounts and reconciling monthly with receipts.
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Because at the end of the day, if you get audited, you want to make it easy to get that information over and not make it stressful.
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And at the end of the year, it makes it really easy for tax.
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So let's get into that a little bit.
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If you are just pulling your transactions once a year and sending it to your CPA, I highly doubt you're doing financial reviews.
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And that's really something you want to do.
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So step two, or step one, let's say, is setting up the accounts and having the accounting software.
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Step two is doing the financial review and the tax planning.
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You really want to have daily financial reviews.
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That's inputting any receipts for the day.
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Especially while you're traveling.
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Because, I don't know about you, but I have waited and waited on some, and by the time you get to the receipt, there's no ink on it anymore.
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And then, what do you do?
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You have no documentation.
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Getting that info in at the very least weekly.
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Because, we've, I mean we've had big, Real estate renovations go on and we're busy and now we've got two kids so Sitting down and doing receipts was not a priority and at the end of the renovation eric and I would look at each other and be like Oh gosh, we have you know 500 transactions.
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We need to categorize And then you scratch your head and say what was this for?
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What was that for and you can just make your life a lot easier if you do it at least once a week at the very minimum You Next, you want to do a monthly financial review.
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Looking through your P& L, and we will talk more about that next week, but looking through your P& L and just seeing what's going on.
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Are there, is there expense creep?
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Did you have a revenue drop?
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What are the trends?
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That's really where the data is.
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So making sure you know what's happening in your business.
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Another thing I love is lag measures versus lead measures.
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So a lag measures revenue, the lead measure is number of sales calls.
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So the idea is with a lead measure, it's the activity that leads to the lag measure.
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So if you can catch the things that really are driving the revenue and the profitability, you can get ahead of it.
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Instead of waiting, you know, until next quarter.
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So I, that's one of the key financial metrics you want to track.
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And it all depends on your business, but what are those lead measures that are going to show up on your P& L?
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So you want to track that monthly as well.
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Quarterly, we need to be doing tax strategies once a quarter with your CPA or tax strategist to make sure you are making the investment and optimized for what's coming.
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quarterly, you want to probably monthly actually build out a forecast of what do you think the business is going to do for the next 369 months.
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And that way, you can have a clear picture and make decisions appropriately, based on the direction the business is going to go.
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So Quarterly is debt.
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Monthly is the financial review.
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It's the projections and planning for what's next.
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Quarterly is doing more tax strategy and make sure you're optimized there.
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And do you need to adjust your quarterly payments?
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Are you optimized for your taxes?
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How does that look?
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And then finally, annually, You want to look at your overall picture for the year.
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Did you reach your targets?
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You want to look at your tax plan for this year and next year.
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I'm recording this in December, so you might not be listening to this, you know, in 2024.
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But make sure you are set for the next tax year.
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Taxes aren't a once a year thing.
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It's something you should be doing throughout the year.
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So find the strategies that work for you.
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and set a rhythm and block your calendar to make sure you do this.
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In our house, we have a weekly meeting, my husband and I, and we go through the finances personally and business.
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And then about once a quarter, I will do a deep dive on the real estate.
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Real estate's a little tricky and I'll get into why in a little bit, but so I would like to do it more often, but one, real estate doesn't change frequently because the rent is the rent, like you don't really change your revenue too often, and most of our expenses are pretty fixed, so it's not as rapidly moving as a traditional business.
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But we like to look at least once a year, but usually quarterly, what's going on in the business and how are we performing compared to our projections.
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And it has led to some crazy decisions.
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We did an analysis looking at profitability on some rentals, and wound up deciding to sell two houses because they were not making as much as we thought.
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And they had some deferred maintenance, like a couple trees.
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And if you've never taken out like giant old oak trees, I think it was like 15, 000 was our budget for these two trees.
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So it just did not make sense to hold them.
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So we sold them and did a tax exchange into two cabins that we now Airbnb that grew our net worth significantly.
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They make more money.
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Like it's just, it was such a good decision, but we wouldn't have known to do that if we didn't have these regular checks.
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Also like making sure you're taking the right tax deductions and credits and finding a really good CPA.
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Also you want to make sure you're planning your taxes in a way that works for you personally and professionally.
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If you have personal goals to buy a house or you want to scale or whatever it is, make sure your tax strategy is fitting that if you're trying to qualify for a mortgage.
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writing off everything under the sun might not be the right play.
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I have a masterclass that I will link in the show notes where we talk about this, but just to give you a high level, you want to make sure that if you're going to pay for, let's say, an expensive coaching program or mastermind, Could you potentially push it to the next year so that your income looks better for this year if you're trying to qualify for a mortgage, as an example?
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So there's some things you can do to play, but you have to have tax planning and strategy around that, and that comes through these regular financial rhythms.
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So we have getting the financial foundation, the bank account, the accounting software, having your regular financial reviews and tax planning.
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for listening.
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And then next, we want to build up a healthy amount of reserves.
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And only you can decide what that is.
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I generally tell people two to three times of your expenses should be in an account somewhere.
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Just as a rainy day fund.
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Now, as a real estate investor, we like to say you need cash or access to cash.
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It's a little bit of a different philosophy because With real estate, you're sitting on usually a healthy amount of equity.
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So you could get a loan pretty quickly on that real estate.
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So I feel more comfortable having the cash in my bank and making sure that it's in a place that's earning some decent interest, but also accessible.
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So you have to balance that, but having at least two to three times your expense.
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And then same goes for if you're looking to hire a new person, having a couple of months of that salary sitting in the account before you hire them.
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So that if business does slow down, you have enough time to pivot before that person's in a spot where they're not getting paid.
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So how do you build reserves?
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I know that's can be tough, right?
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It's, it can be tough to try to figure out how to accumulate two to three months of overhead.
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I have worked with so many clients that they're just trying to cover their day to day bills.
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And the thought of trying to stick that much money aside is overwhelming.
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So let's just start small, automate your savings, have an automatic transfer, go out each month.
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Let's look at your expenses.
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Is there something that can be cut?
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So many times we've done reviews and it's oh, there's a cheaper alternative for the software, whether it's with the same company in a lower package or a competitor.
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You, there's ways to cut expenses in ways that you might not realize.
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And also like, how fun is it to not have to change anything in your business, but looking at a, you know, spending a couple of days, analyzing your expenses, finding some alternatives, and then all of a sudden your income grows because at the end of the day, yes, you can increase your income.
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That's my next tip.
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Increase your income.
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That absolutely will help you build reserves.
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But.
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If that's something that's difficult for you, what if you could just cut your expenses and your overhead and not have to do more work and more sales and more client services or whatever it is, and you just take home more because at the end of the day, it's not what you make.
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It's what you keep.
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And there's so much value and just streamlining your business and making it as lean as possible.
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with keeping in mind that you don't want to cut to the point where you're, you know, overworked.
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So it's definitely a balance, but I would also say avoiding lifestyle creep.
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I've seen it in our business and our life.
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When our second kid was born, we decided to move and absolutely love the house we're in.
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It's perfect for our family, but it more than doubled our mortgage payment.
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So if we had put that off for a little while, we could have significantly grown our reserves faster.
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So what can you do to just stay where you're at today, even as that income grows and be happy with the current situation and let it accumulate?
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And then once you have a safety net, then you can do the next big thing.
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Not telling you what to do what feels right.
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But I think there are ways to build those reserves.
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And I can tell you having cash in the bank, you just sleep a little bit better.
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There's not this concern of our, you know, we had a 10, 000 septic bill and that writing that check was not as hard as it had been in the past because we had a healthy amount of reserves ready to go.
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Next mastering cash flow management.
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So cashflow is an interesting one because we've talked about looking at your P and L, and that's absolutely crucial and important, but you also have to look at your cashflow and there are two different things.
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So high level, there is a difference between a cash basis and accrual basis.
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Accounting accrual is you record the income when the service is provided.
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cash basis as you record it when the cash comes into the bank.
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So most small businesses stick with cash basis just because the system is easier to manage.
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Accrual, let's say you work a project with a coach and you're paying them all up front.
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They will sit that money into in their accounting software into a separate account and spread that over the months of the contract, and each month they record a portion of that income in cash basis.
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You record 100 percent of it in the month it's received.
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So when you're looking at a P& L in your cash basis, it's literally showing what's coming in the account for revenue for the most part.
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accrual is going to show accrual is just better for forecasting, honestly, because it shows more of like when the work is actually done, because that coach isn't doing all the coaching and month one, they're doing it over say six months.
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So we're spreading that over the six months.
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So it's not saying you need to switch to accrual.
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It's just easier for forecasting, but With cash basis, you still have non cash expenses that will show up on your P& L.
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So in real estate, we have depreciation.
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In other businesses, you might buy a, let's say, an expensive computer, and your accountant says you need to spread that over the course of three years.
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So you're gonna pay that laptop fee, let's say it's a thousand dollars, on day one.
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But you're going to record that 1, 000 spread over 36 months each month.
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So it's not really cash coming out, but it is, you know, an expense on the P& L.
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I just want to start with that foundation.
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I know it can be confusing.
00:18:35.961 --> 00:18:41.031
What you really need to know at the end of the day is that there is a difference between profit and cash flow.
00:18:41.451 --> 00:18:43.811
And we want to make sure we're measuring profit.
00:18:44.261 --> 00:18:58.721
In one view and cash in the other, because if you run out of cash your business is done unless you want to get financing, which is totally an option, but making sure that you are balancing cash versus profit and just paying attention to it and knowing the difference.
00:18:59.172 --> 00:19:04.352
There is a cashflow statement that you can pull within bookkeeping software, which is helpful too.
00:19:04.801 --> 00:19:09.442
I personally love a cashflow forecast and.
00:19:09.836 --> 00:19:20.507
I am building out a course on financial clarity that is going to teach you exactly how to do this and give you the spreadsheets and make it easy because this stuff can be hard.
00:19:20.576 --> 00:19:29.567
And it's, if it's not something you went to school for and spent a lot of money in student loans each month, there, there's a an accrual thing.
00:19:29.567 --> 00:19:33.967
I get to pay for that over months and months, but I've already you know, had the education.
00:19:34.416 --> 00:19:43.356
It's, it can be confusing, so I just want to say I recognize that and I see you and want to help support businesses and learning this stuff because they don't teach it.
00:19:43.807 --> 00:19:50.856
So I like using a cashflow forecast, and it looks a lot like a P& L, but it's a spreadsheet.
00:19:50.856 --> 00:19:52.797
So it's not your official books that go to the IRS.
00:19:53.037 --> 00:19:54.186
It's not what your accountant sees.
00:19:54.186 --> 00:19:57.717
This is just for you and your CFO, if you have one.
00:19:58.166 --> 00:20:01.717
And we use it to play with the numbers.
00:20:02.186 --> 00:20:07.527
Will look at it from a cash perspective, so I'm not gonna put in depreciation and things like that.
00:20:07.856 --> 00:20:13.557
I am gonna add in items that go on the balance sheet, and that could be like paying yourself.
00:20:13.896 --> 00:20:18.852
An owner's draw shows up on the balance sheet, but it is impacting your cash and the bank.
00:20:19.301 --> 00:20:27.311
So we build a cashflow forecast and use that to really get clarity on what's coming in and out of the account.
00:20:27.761 --> 00:20:34.531
I like to also, when I'm building a cash flow forecast, add in any expenses that I think might be coming up.
00:20:35.001 --> 00:20:40.011
Let's say you're signing up for a new program or a new piece of technology and there's going to be an investment with that.
00:20:40.461 --> 00:20:45.632
You can put that on your forecast and then see where that's going to put your cash situation.
00:20:45.642 --> 00:20:50.801
And is it going to put you below that reserve amount or below, you know, the zero mark.
00:20:51.251 --> 00:20:53.422
So it's really just helpful for getting that clarity.
00:20:53.922 --> 00:20:57.942
Also you can improve cashflow with good invoicing and collections.
00:20:58.392 --> 00:21:00.291
Making sure that you are billing your clients.
00:21:00.741 --> 00:21:06.682
I've, I have been guilty of doing work for free and letting clients get behind.
00:21:07.142 --> 00:21:21.092
And we have set a new system and process of Our expenses will be prepaid, and our fee as a CFO or a coach will be prepaid, and if you don't pay, you don't continue receiving services.
00:21:21.541 --> 00:21:26.122
That's one thing we've done making sure that you are collecting on your receivables.
00:21:26.571 --> 00:21:28.211
And billing.
00:21:28.342 --> 00:21:29.071
Oh my gosh.
00:21:29.521 --> 00:21:39.011
We have had contractors not bill us and we've tried, we have tried reaching out to them several times to pay them and they don't get back to us.
00:21:39.461 --> 00:21:45.481
So there's probably like 5, 000 worth of stuff we haven't paid for because they wouldn't invoice us.
00:21:45.541 --> 00:21:46.352
And we tried.
00:21:46.481 --> 00:21:47.741
I don't know what else we could have done.
00:21:48.192 --> 00:21:52.862
So it's just funny having a good grasp on making sure that you're invoicing.
00:21:53.362 --> 00:21:54.061
Is key.
00:21:54.511 --> 00:21:57.102
And then finally, managing your expenses and reducing costs.
00:21:57.491 --> 00:22:01.922
Make sure that you are using the things you pay for.
00:22:02.112 --> 00:22:06.571
Right now we've been talking for weeks about cancelling our Netflix because we're just not watching it.
00:22:06.571 --> 00:22:08.011
We watch on other platforms.
00:22:08.461 --> 00:22:09.291
And just haven't.
00:22:09.442 --> 00:22:11.001
And it's, yeah, it's not a huge cost.
00:22:11.011 --> 00:22:14.271
But also that's, it could be a coffee or two, you know?
00:22:14.372 --> 00:22:15.412
I don't know why we don't cut it.
00:22:15.442 --> 00:22:16.791
It's just, it's interesting.
00:22:16.902 --> 00:22:22.102
Over here, the finance CFO person and I still see us making these mistakes.
00:22:22.112 --> 00:22:23.602
So don't feel bad.
00:22:24.102 --> 00:22:25.102
We're in this together.
00:22:25.551 --> 00:22:29.942
So I really want you to look at your business and do a systems check.
00:22:30.392 --> 00:22:33.281
Do you have bank accounts designated for your business?
00:22:33.332 --> 00:22:34.771
And if you use credit cards as well.
00:22:35.221 --> 00:22:36.721
Do you have accounting software set up?
00:22:36.771 --> 00:22:41.951
And again, feel free to send me a message or book a call and we can chat about the best system for you.
00:22:42.402 --> 00:23:01.642
As far as the accounting software goes, are you doing your financial check ins daily, weekly, monthly, quarterly, annually, and looking at the metrics that you need to track, are you doing tax planning at least quarterly, and then a big one annually to make sure that you're set up and you have a strategy for your taxes?
00:23:02.092 --> 00:23:03.291
Do you have the reserves?
00:23:03.412 --> 00:23:05.501
And if you don't, what can you do to start growing them?
00:23:05.511 --> 00:23:09.301
So that you're not in that hand to mouth constant struggle.
00:23:09.751 --> 00:23:11.001
Oh, we have lived that.
00:23:11.281 --> 00:23:14.092
And I can tell you it feels so much better on the other side.
00:23:14.541 --> 00:23:17.672
And then finally, making sure you understand cashflow.
00:23:18.112 --> 00:23:21.281
And then managing it effectively, especially with that cashflow forecast.
00:23:21.311 --> 00:23:24.902
And if you want more information on the course that we're building, please reach out.
00:23:24.922 --> 00:23:27.352
I'd love to chat with you and see if it's a fit.
00:23:27.422 --> 00:23:35.612
We I always say we because Eric and I have built every business together and this is me, just me.
00:23:35.951 --> 00:23:37.842
And I've got to change that.
00:23:37.882 --> 00:23:38.701
It's so funny though.
00:23:39.152 --> 00:23:41.041
If you want info on that, please reach out.
00:23:41.102 --> 00:23:45.832
I would love to have a conversation with you and see if it's something that's a fit.
00:23:46.122 --> 00:23:52.122
I am going to be launching it in January, February at the latest.
00:23:52.201 --> 00:23:52.912
And.
00:23:53.362 --> 00:23:57.071
We'll probably not launch it again until the fall.
00:23:57.102 --> 00:24:04.701
Just with a baby on the way, you know, we got to make sure that everything is ticked and tied for me to go on some form of maternity leave.
00:24:04.701 --> 00:24:09.561
So if you're interested, please reach out and let's chat.
00:24:09.771 --> 00:24:16.571
And I'd love to know in your comments of the podcast, what's your biggest financial challenge as a business owner?
00:24:16.781 --> 00:24:20.432
And What do you think is causing that challenge?
00:24:20.672 --> 00:24:28.321
Just would love to chat more about it and see as you're building your financial systems and your framework what is, what are the struggles for you?
00:24:28.771 --> 00:24:30.801
So that's all I have for you today.
00:24:31.291 --> 00:24:53.481
Next time we're going to talk about financial statements and how to read them and how to leverage this in your business because I know I talked very high level about P& Ls and cash flow statements and a little bit about the balance sheet, but knowing how to read these things can absolutely change your business because you have the clarity in knowing what the numbers are saying.
00:24:53.682 --> 00:24:59.142
So come check it out and remember small steps, bigger rewards.
00:24:59.382 --> 00:25:01.511
Remember your future self will thank you.
00:25:02.011 --> 00:25:02.711
See you next time.
00:00:39.843 --> 00:00:42.033
Do you feel like your business is financially fit?
00:00:42.482 --> 00:00:52.402
Are you actually confident in the systems and processes in place in your business and feel like they get you where you need to go in this episode, we're going to dive deep into the essential financial systems.
00:00:52.442 --> 00:00:56.292
Every business needs to thrive from setting up bank accounts to managing cashflow.
00:00:56.332 --> 00:00:57.093
We'll cover it all.
00:00:57.542 --> 00:01:01.372
Get ready to strengthen your financial foundation and take your business to the next level.
00:01:01.823 --> 00:01:02.753
Welcome back.
00:01:03.203 --> 00:01:10.662
When Eric and I first started our businesses, We didn't really have any idea what we were doing from a financial perspective.
00:01:11.112 --> 00:01:16.673
I, fortunately, I had the undergraduate education, well, and I had my master's in finance at that point.
00:01:17.123 --> 00:01:21.382
I knew corporate finance, but it's just us and a couple rental properties.
00:01:21.382 --> 00:01:22.843
We don't need to do all that stuff, right?
00:01:23.293 --> 00:01:24.183
Yeah, you do.
00:01:24.233 --> 00:01:35.733
Maybe not all of it, but you need to have some systems in place, and we learned over time definitely learned through the school of hard knocks and found things that worked for us over time.
00:01:35.862 --> 00:01:39.272
So my goal in this is to share some of that so you can shortcut it.
00:01:39.283 --> 00:01:41.873
And realistically, you probably don't have a master's in finance.
00:01:41.953 --> 00:01:55.302
So let's take all of my knowledge from the traditional finance perspective and in the practical world of running a business and combine all of that to help you create the financial framework your business needs.
00:01:55.753 --> 00:02:01.183
So if you're a new business owner, or you're looking to improve your financial systems, then this episode is absolutely for you.
00:02:01.632 --> 00:02:05.263
I just want to start with recognizing you wherever you are.
00:02:05.712 --> 00:02:08.932
I have talked to people who, you know, they have all the things.
00:02:08.932 --> 00:02:12.823
They have the QuickBooks account, they're uploading receipts every couple days, or every day.
00:02:13.152 --> 00:02:15.703
They're doing everything by the book, what they should do.
00:02:16.152 --> 00:02:19.927
And then I've chatted with people who, you know, don't have books at all.
00:02:20.268 --> 00:02:26.157
They pull from all their different bank accounts at the end of the year and send that to their CPA with a box of receipts.
00:02:26.247 --> 00:02:28.258
And that's how they do their financials.
00:02:28.698 --> 00:02:33.907
So wherever you are in that scale, cause it's a pretty wide range of positions.
00:02:34.358 --> 00:02:35.117
That's okay.
00:02:35.217 --> 00:02:36.288
We're going to meet you where you're at.
00:02:36.288 --> 00:02:42.687
So let's just start with the number one fundamental, having bank accounts and credit cards for your business.
00:02:43.138 --> 00:02:47.437
You want to make sure that you're making it easy on yourself.
00:02:47.907 --> 00:02:50.608
Make sure that you have the right bank accounts.
00:02:50.798 --> 00:02:56.228
And by right, have all your business stuff flow through a business bank account, have all your personal stuff flow through a personal account.
00:02:56.657 --> 00:03:03.087
The way I like to look at it, I worked as an employee in a corporation for 10 years.
00:03:03.538 --> 00:03:04.198
And.
00:03:04.647 --> 00:03:09.348
I did not have a debit card to go use their checking account to go buy stuff.
00:03:09.798 --> 00:03:12.487
So make sure that you're not doing that with your business and yourself.
00:03:12.508 --> 00:03:14.538
It is, they're two separate entities.
00:03:14.758 --> 00:03:15.997
They are two separate beings.
00:03:16.298 --> 00:03:18.818
And you don't have your neighbor's credit card, I'm assuming.
00:03:18.848 --> 00:03:21.237
Maybe you do, but if you do, good on you.
00:03:21.548 --> 00:03:27.918
But assuming you don't have your neighbor's credit card, the same would go with your business.
00:03:28.367 --> 00:03:30.207
When I am using my business card.
00:03:30.673 --> 00:03:34.453
I am not using it as Tiffany Vogel, a member of the Vogel family.
00:03:34.802 --> 00:03:40.332
I am using it as Tiffany Vogel, owner of whatever company I'm using it for.
00:03:40.763 --> 00:03:47.163
So it's almost like wearing a different hat or, I don't know, suit when you are using that card.
00:03:47.603 --> 00:03:51.527
So you want to make sure that you are keeping things separate and what that does for you.
00:03:51.527 --> 00:03:53.782
One, it makes you nice and clean for the IRS.
00:03:53.823 --> 00:03:58.703
They like to see you treating your business like a business from a legal perspective.
00:03:59.152 --> 00:04:01.242
There's this thing called piercing the corporate veil.
00:04:01.693 --> 00:04:10.323
And if you're not familiar with what that is, it's basically saying the asset protection you have and having an LLC completely goes away because you're treating it like a personal bank account.
00:04:10.772 --> 00:04:12.383
And then finally, it just makes it easier.
00:04:12.383 --> 00:04:16.853
So you can set up a QuickBooks online or other accounting system.
00:04:16.913 --> 00:04:21.992
Feel free to send me an email and I'll tell you all my favorite accounting systems, or you can reach out and schedule a call with me.
00:04:22.293 --> 00:04:25.012
There are some way cheaper options than QuickBooks out there.
00:04:25.103 --> 00:04:28.302
So just let me know if you want to chat about that.
00:04:28.302 --> 00:04:45.372
But it's so much easier when you can link your credit card, if you use credit cards, and your checking account straight in to that financial system, and we'll talk about that a little bit more in a minute, than trying to pick and choose what's personal and what's not.
00:04:45.593 --> 00:04:52.322
And full disclosure, Sometimes I use the wrong card and I, you know, forget that I'm paying for something for business.
00:04:52.773 --> 00:04:56.822
So I make a note of it and make sure that I get that into my book separately.
00:04:57.322 --> 00:04:59.702
You can also do a reimbursement to yourself.
00:05:00.103 --> 00:05:04.713
Write yourself a check in essence for the amount of that, like you were an employee.
00:05:04.892 --> 00:05:15.362
So in my corporate days, if let's say I drove my car and got mileage, the company would write me a check or put it as a separate payroll for that mileage.
00:05:15.492 --> 00:05:18.083
So it was easy to track that line item.
00:05:18.093 --> 00:05:20.122
So just make sure you're doing that.
00:05:20.302 --> 00:05:27.213
That's probably the cleanest way you could, you know, just manually throw it into the books as a personal expense that you paid for out of pocket.
00:05:27.223 --> 00:05:27.583
But.
00:05:28.033 --> 00:05:35.293
Really the cleanest way is to transfer that money, but you want to make sure that you're keeping your business finances separate from your personal.
00:05:35.742 --> 00:05:40.612
It's just clean, it makes life easier, and sets you up for success.
00:05:40.663 --> 00:05:48.173
Because at the end of the day, we are running businesses, this is not a hobby, this is not a personal thing, it is a separate entity, and you want to treat it that way.
00:05:48.622 --> 00:05:50.562
So next accounting software.
00:05:50.932 --> 00:05:54.853
There are so many things out there you can use, and it's really just finding one that works for you.
00:05:55.302 --> 00:06:00.043
We use different ones in our business, just depending on the nature of the business are real estate.
00:06:00.043 --> 00:06:00.923
We've used several.
00:06:01.372 --> 00:06:08.882
And then we used other ones for our non real estate businesses because the nature of real estate is just very complex and different.
00:06:09.333 --> 00:06:11.173
So find the one that works for you.
00:06:11.622 --> 00:06:17.153
And then make sure you're linking your bank accounts and reconciling monthly with receipts.
00:06:17.252 --> 00:06:23.952
Because at the end of the day, if you get audited, you want to make it easy to get that information over and not make it stressful.
00:06:24.403 --> 00:06:27.543
And at the end of the year, it makes it really easy for tax.
00:06:27.632 --> 00:06:29.093
So let's get into that a little bit.
00:06:29.543 --> 00:06:38.552
If you are just pulling your transactions once a year and sending it to your CPA, I highly doubt you're doing financial reviews.
00:06:38.632 --> 00:06:40.452
And that's really something you want to do.
00:06:40.903 --> 00:06:46.153
So step two, or step one, let's say, is setting up the accounts and having the accounting software.
00:06:46.163 --> 00:06:49.702
Step two is doing the financial review and the tax planning.
00:06:50.103 --> 00:06:53.442
You really want to have daily financial reviews.
00:06:53.473 --> 00:06:55.642
That's inputting any receipts for the day.
00:06:56.093 --> 00:06:57.392
Especially while you're traveling.
00:06:57.793 --> 00:07:03.882
Because, I don't know about you, but I have waited and waited on some, and by the time you get to the receipt, there's no ink on it anymore.
00:07:04.293 --> 00:07:05.252
And then, what do you do?
00:07:05.343 --> 00:07:06.523
You have no documentation.
00:07:06.973 --> 00:07:09.702
Getting that info in at the very least weekly.
00:07:10.002 --> 00:07:28.108
Because, we've, I mean we've had big, Real estate renovations go on and we're busy and now we've got two kids so Sitting down and doing receipts was not a priority and at the end of the renovation eric and I would look at each other and be like Oh gosh, we have you know 500 transactions.
00:07:28.117 --> 00:07:31.677
We need to categorize And then you scratch your head and say what was this for?
00:07:31.757 --> 00:07:42.228
What was that for and you can just make your life a lot easier if you do it at least once a week at the very minimum You Next, you want to do a monthly financial review.
00:07:42.458 --> 00:07:50.747
Looking through your P& L, and we will talk more about that next week, but looking through your P& L and just seeing what's going on.
00:07:51.028 --> 00:07:52.577
Are there, is there expense creep?
00:07:52.987 --> 00:07:54.267
Did you have a revenue drop?
00:07:54.538 --> 00:07:55.598
What are the trends?
00:07:55.637 --> 00:07:57.418
That's really where the data is.
00:07:57.867 --> 00:08:00.437
So making sure you know what's happening in your business.
00:08:00.887 --> 00:08:05.437
Another thing I love is lag measures versus lead measures.
00:08:05.648 --> 00:08:11.048
So a lag measures revenue, the lead measure is number of sales calls.
00:08:11.497 --> 00:08:17.677
So the idea is with a lead measure, it's the activity that leads to the lag measure.
00:08:18.098 --> 00:08:26.958
So if you can catch the things that really are driving the revenue and the profitability, you can get ahead of it.
00:08:27.408 --> 00:08:30.048
Instead of waiting, you know, until next quarter.
00:08:30.408 --> 00:08:34.597
So I, that's one of the key financial metrics you want to track.
00:08:35.048 --> 00:08:40.518
And it all depends on your business, but what are those lead measures that are going to show up on your P& L?
00:08:40.967 --> 00:08:42.538
So you want to track that monthly as well.
00:08:42.988 --> 00:08:54.168
Quarterly, we need to be doing tax strategies once a quarter with your CPA or tax strategist to make sure you are making the investment and optimized for what's coming.
00:08:54.618 --> 00:09:03.957
quarterly, you want to probably monthly actually build out a forecast of what do you think the business is going to do for the next 369 months.
00:09:04.408 --> 00:09:11.908
And that way, you can have a clear picture and make decisions appropriately, based on the direction the business is going to go.
00:09:12.357 --> 00:09:14.107
So Quarterly is debt.
00:09:14.177 --> 00:09:16.288
Monthly is the financial review.
00:09:16.587 --> 00:09:20.467
It's the projections and planning for what's next.
00:09:20.918 --> 00:09:25.118
Quarterly is doing more tax strategy and make sure you're optimized there.
00:09:25.457 --> 00:09:28.317
And do you need to adjust your quarterly payments?
00:09:28.327 --> 00:09:30.577
Are you optimized for your taxes?
00:09:31.028 --> 00:09:31.967
How does that look?
00:09:32.138 --> 00:09:37.238
And then finally, annually, You want to look at your overall picture for the year.
00:09:37.557 --> 00:09:38.847
Did you reach your targets?
00:09:39.217 --> 00:09:43.258
You want to look at your tax plan for this year and next year.
00:09:43.707 --> 00:09:48.378
I'm recording this in December, so you might not be listening to this, you know, in 2024.
00:09:48.388 --> 00:09:52.258
But make sure you are set for the next tax year.
00:09:52.528 --> 00:09:54.317
Taxes aren't a once a year thing.
00:09:54.347 --> 00:09:56.418
It's something you should be doing throughout the year.
00:09:56.418 --> 00:10:00.837
So find the strategies that work for you.
00:10:01.283 --> 00:10:05.342
and set a rhythm and block your calendar to make sure you do this.
00:10:05.702 --> 00:10:14.962
In our house, we have a weekly meeting, my husband and I, and we go through the finances personally and business.
00:10:15.072 --> 00:10:19.253
And then about once a quarter, I will do a deep dive on the real estate.
00:10:19.493 --> 00:10:37.753
Real estate's a little tricky and I'll get into why in a little bit, but so I would like to do it more often, but one, real estate doesn't change frequently because the rent is the rent, like you don't really change your revenue too often, and most of our expenses are pretty fixed, so it's not as rapidly moving as a traditional business.
00:10:38.182 --> 00:10:46.673
But we like to look at least once a year, but usually quarterly, what's going on in the business and how are we performing compared to our projections.
00:10:47.123 --> 00:10:50.173
And it has led to some crazy decisions.
00:10:50.523 --> 00:11:00.962
We did an analysis looking at profitability on some rentals, and wound up deciding to sell two houses because they were not making as much as we thought.
00:11:01.232 --> 00:11:04.692
And they had some deferred maintenance, like a couple trees.
00:11:05.062 --> 00:11:12.393
And if you've never taken out like giant old oak trees, I think it was like 15, 000 was our budget for these two trees.
00:11:12.842 --> 00:11:14.962
So it just did not make sense to hold them.
00:11:15.052 --> 00:11:24.342
So we sold them and did a tax exchange into two cabins that we now Airbnb that grew our net worth significantly.
00:11:24.423 --> 00:11:25.423
They make more money.
00:11:25.432 --> 00:11:31.202
Like it's just, it was such a good decision, but we wouldn't have known to do that if we didn't have these regular checks.
00:11:31.653 --> 00:11:38.302
Also like making sure you're taking the right tax deductions and credits and finding a really good CPA.
00:11:38.753 --> 00:11:45.942
Also you want to make sure you're planning your taxes in a way that works for you personally and professionally.
00:11:46.373 --> 00:11:56.783
If you have personal goals to buy a house or you want to scale or whatever it is, make sure your tax strategy is fitting that if you're trying to qualify for a mortgage.
00:11:57.232 --> 00:12:00.023
writing off everything under the sun might not be the right play.
00:12:00.472 --> 00:12:20.763
I have a masterclass that I will link in the show notes where we talk about this, but just to give you a high level, you want to make sure that if you're going to pay for, let's say, an expensive coaching program or mastermind, Could you potentially push it to the next year so that your income looks better for this year if you're trying to qualify for a mortgage, as an example?
00:12:21.253 --> 00:12:31.003
So there's some things you can do to play, but you have to have tax planning and strategy around that, and that comes through these regular financial rhythms.
00:12:31.452 --> 00:12:38.352
So we have getting the financial foundation, the bank account, the accounting software, having your regular financial reviews and tax planning.
00:12:38.352 --> 00:12:38.418
for listening.
00:12:38.868 --> 00:12:42.067
And then next, we want to build up a healthy amount of reserves.
00:12:42.518 --> 00:12:44.998
And only you can decide what that is.
00:12:45.447 --> 00:12:52.028
I generally tell people two to three times of your expenses should be in an account somewhere.
00:12:52.148 --> 00:12:53.398
Just as a rainy day fund.
00:12:53.847 --> 00:12:59.288
Now, as a real estate investor, we like to say you need cash or access to cash.
00:12:59.788 --> 00:13:06.202
It's a little bit of a different philosophy because With real estate, you're sitting on usually a healthy amount of equity.
00:13:06.562 --> 00:13:09.702
So you could get a loan pretty quickly on that real estate.
00:13:09.832 --> 00:13:18.273
So I feel more comfortable having the cash in my bank and making sure that it's in a place that's earning some decent interest, but also accessible.
00:13:18.283 --> 00:13:22.812
So you have to balance that, but having at least two to three times your expense.
00:13:22.873 --> 00:13:30.673
And then same goes for if you're looking to hire a new person, having a couple of months of that salary sitting in the account before you hire them.
00:13:31.138 --> 00:13:37.628
So that if business does slow down, you have enough time to pivot before that person's in a spot where they're not getting paid.
00:13:38.077 --> 00:13:40.008
So how do you build reserves?
00:13:40.177 --> 00:13:42.097
I know that's can be tough, right?
00:13:42.138 --> 00:13:48.687
It's, it can be tough to try to figure out how to accumulate two to three months of overhead.
00:13:49.048 --> 00:13:53.187
I have worked with so many clients that they're just trying to cover their day to day bills.
00:13:53.592 --> 00:13:58.003
And the thought of trying to stick that much money aside is overwhelming.
00:13:58.082 --> 00:14:04.643
So let's just start small, automate your savings, have an automatic transfer, go out each month.
00:14:05.092 --> 00:14:06.653
Let's look at your expenses.
00:14:06.702 --> 00:14:08.003
Is there something that can be cut?
00:14:08.442 --> 00:14:18.052
So many times we've done reviews and it's oh, there's a cheaper alternative for the software, whether it's with the same company in a lower package or a competitor.
00:14:18.503 --> 00:14:22.232
You, there's ways to cut expenses in ways that you might not realize.
00:14:22.653 --> 00:14:37.613
And also like, how fun is it to not have to change anything in your business, but looking at a, you know, spending a couple of days, analyzing your expenses, finding some alternatives, and then all of a sudden your income grows because at the end of the day, yes, you can increase your income.
00:14:37.673 --> 00:14:38.643
That's my next tip.
00:14:38.753 --> 00:14:39.533
Increase your income.
00:14:39.572 --> 00:14:41.393
That absolutely will help you build reserves.
00:14:41.842 --> 00:14:42.293
But.
00:14:42.743 --> 00:14:57.663
If that's something that's difficult for you, what if you could just cut your expenses and your overhead and not have to do more work and more sales and more client services or whatever it is, and you just take home more because at the end of the day, it's not what you make.
00:14:57.663 --> 00:14:58.403
It's what you keep.
00:14:58.403 --> 00:15:06.243
And there's so much value and just streamlining your business and making it as lean as possible.
00:15:06.692 --> 00:15:12.153
with keeping in mind that you don't want to cut to the point where you're, you know, overworked.
00:15:12.222 --> 00:15:16.123
So it's definitely a balance, but I would also say avoiding lifestyle creep.
00:15:16.572 --> 00:15:18.263
I've seen it in our business and our life.
00:15:18.653 --> 00:15:25.113
When our second kid was born, we decided to move and absolutely love the house we're in.
00:15:25.582 --> 00:15:31.003
It's perfect for our family, but it more than doubled our mortgage payment.
00:15:31.452 --> 00:15:37.092
So if we had put that off for a little while, we could have significantly grown our reserves faster.
00:15:37.543 --> 00:15:47.143
So what can you do to just stay where you're at today, even as that income grows and be happy with the current situation and let it accumulate?
00:15:47.592 --> 00:15:52.962
And then once you have a safety net, then you can do the next big thing.
00:15:53.143 --> 00:15:54.873
Not telling you what to do what feels right.
00:15:54.932 --> 00:15:58.523
But I think there are ways to build those reserves.
00:15:58.543 --> 00:16:02.552
And I can tell you having cash in the bank, you just sleep a little bit better.
00:16:02.653 --> 00:16:16.182
There's not this concern of our, you know, we had a 10, 000 septic bill and that writing that check was not as hard as it had been in the past because we had a healthy amount of reserves ready to go.
00:16:16.682 --> 00:16:19.653
Next mastering cash flow management.
00:16:19.743 --> 00:16:31.283
So cashflow is an interesting one because we've talked about looking at your P and L, and that's absolutely crucial and important, but you also have to look at your cashflow and there are two different things.
00:16:31.732 --> 00:16:36.732
So high level, there is a difference between a cash basis and accrual basis.
00:16:36.732 --> 00:16:42.072
Accounting accrual is you record the income when the service is provided.
00:16:42.572 --> 00:16:46.023
cash basis as you record it when the cash comes into the bank.
00:16:46.503 --> 00:16:54.182
So most small businesses stick with cash basis just because the system is easier to manage.
00:16:54.633 --> 00:17:04.042
Accrual, let's say you work a project with a coach and you're paying them all up front.
00:17:04.492 --> 00:17:17.313
They will sit that money into in their accounting software into a separate account and spread that over the months of the contract, and each month they record a portion of that income in cash basis.
00:17:17.653 --> 00:17:20.133
You record 100 percent of it in the month it's received.
00:17:20.583 --> 00:17:30.073
So when you're looking at a P& L in your cash basis, it's literally showing what's coming in the account for revenue for the most part.
00:17:30.522 --> 00:17:43.772
accrual is going to show accrual is just better for forecasting, honestly, because it shows more of like when the work is actually done, because that coach isn't doing all the coaching and month one, they're doing it over say six months.
00:17:43.952 --> 00:17:45.982
So we're spreading that over the six months.
00:17:45.982 --> 00:17:51.192
So it's not saying you need to switch to accrual.
00:17:51.252 --> 00:18:01.083
It's just easier for forecasting, but With cash basis, you still have non cash expenses that will show up on your P& L.
00:18:01.242 --> 00:18:03.932
So in real estate, we have depreciation.
00:18:04.413 --> 00:18:12.512
In other businesses, you might buy a, let's say, an expensive computer, and your accountant says you need to spread that over the course of three years.
00:18:12.962 --> 00:18:20.393
So you're gonna pay that laptop fee, let's say it's a thousand dollars, on day one.
00:18:20.762 --> 00:18:25.853
But you're going to record that 1, 000 spread over 36 months each month.
00:18:26.303 --> 00:18:30.942
So it's not really cash coming out, but it is, you know, an expense on the P& L.
00:18:31.393 --> 00:18:33.801
I just want to start with that foundation.
00:18:34.251 --> 00:18:35.511
I know it can be confusing.
00:18:35.961 --> 00:18:41.031
What you really need to know at the end of the day is that there is a difference between profit and cash flow.
00:18:41.451 --> 00:18:43.811
And we want to make sure we're measuring profit.
00:18:44.261 --> 00:18:58.721
In one view and cash in the other, because if you run out of cash your business is done unless you want to get financing, which is totally an option, but making sure that you are balancing cash versus profit and just paying attention to it and knowing the difference.
00:18:59.172 --> 00:19:04.352
There is a cashflow statement that you can pull within bookkeeping software, which is helpful too.
00:19:04.801 --> 00:19:09.442
I personally love a cashflow forecast and.
00:19:09.836 --> 00:19:20.507
I am building out a course on financial clarity that is going to teach you exactly how to do this and give you the spreadsheets and make it easy because this stuff can be hard.
00:19:20.576 --> 00:19:29.567
And it's, if it's not something you went to school for and spent a lot of money in student loans each month, there, there's a an accrual thing.
00:19:29.567 --> 00:19:33.967
I get to pay for that over months and months, but I've already you know, had the education.
00:19:34.416 --> 00:19:43.356
It's, it can be confusing, so I just want to say I recognize that and I see you and want to help support businesses and learning this stuff because they don't teach it.
00:19:43.807 --> 00:19:50.856
So I like using a cashflow forecast, and it looks a lot like a P& L, but it's a spreadsheet.
00:19:50.856 --> 00:19:52.797
So it's not your official books that go to the IRS.
00:19:53.037 --> 00:19:54.186
It's not what your accountant sees.
00:19:54.186 --> 00:19:57.717
This is just for you and your CFO, if you have one.
00:19:58.166 --> 00:20:01.717
And we use it to play with the numbers.
00:20:02.186 --> 00:20:07.527
Will look at it from a cash perspective, so I'm not gonna put in depreciation and things like that.
00:20:07.856 --> 00:20:13.557
I am gonna add in items that go on the balance sheet, and that could be like paying yourself.
00:20:13.896 --> 00:20:18.852
An owner's draw shows up on the balance sheet, but it is impacting your cash and the bank.
00:20:19.301 --> 00:20:27.311
So we build a cashflow forecast and use that to really get clarity on what's coming in and out of the account.
00:20:27.761 --> 00:20:34.531
I like to also, when I'm building a cash flow forecast, add in any expenses that I think might be coming up.
00:20:35.001 --> 00:20:40.011
Let's say you're signing up for a new program or a new piece of technology and there's going to be an investment with that.
00:20:40.461 --> 00:20:45.632
You can put that on your forecast and then see where that's going to put your cash situation.
00:20:45.642 --> 00:20:50.801
And is it going to put you below that reserve amount or below, you know, the zero mark.
00:20:51.251 --> 00:20:53.422
So it's really just helpful for getting that clarity.
00:20:53.922 --> 00:20:57.942
Also you can improve cashflow with good invoicing and collections.
00:20:58.392 --> 00:21:00.291
Making sure that you are billing your clients.
00:21:00.741 --> 00:21:06.682
I've, I have been guilty of doing work for free and letting clients get behind.
00:21:07.142 --> 00:21:21.092
And we have set a new system and process of Our expenses will be prepaid, and our fee as a CFO or a coach will be prepaid, and if you don't pay, you don't continue receiving services.
00:21:21.541 --> 00:21:26.122
That's one thing we've done making sure that you are collecting on your receivables.
00:21:26.571 --> 00:21:28.211
And billing.
00:21:28.342 --> 00:21:29.071
Oh my gosh.
00:21:29.521 --> 00:21:39.011
We have had contractors not bill us and we've tried, we have tried reaching out to them several times to pay them and they don't get back to us.
00:21:39.461 --> 00:21:45.481
So there's probably like 5, 000 worth of stuff we haven't paid for because they wouldn't invoice us.
00:21:45.541 --> 00:21:46.352
And we tried.
00:21:46.481 --> 00:21:47.741
I don't know what else we could have done.
00:21:48.192 --> 00:21:52.862
So it's just funny having a good grasp on making sure that you're invoicing.
00:21:53.362 --> 00:21:54.061
Is key.
00:21:54.511 --> 00:21:57.102
And then finally, managing your expenses and reducing costs.
00:21:57.491 --> 00:22:01.922
Make sure that you are using the things you pay for.
00:22:02.112 --> 00:22:06.571
Right now we've been talking for weeks about cancelling our Netflix because we're just not watching it.
00:22:06.571 --> 00:22:08.011
We watch on other platforms.
00:22:08.461 --> 00:22:09.291
And just haven't.
00:22:09.442 --> 00:22:11.001
And it's, yeah, it's not a huge cost.
00:22:11.011 --> 00:22:14.271
But also that's, it could be a coffee or two, you know?
00:22:14.372 --> 00:22:15.412
I don't know why we don't cut it.
00:22:15.442 --> 00:22:16.791
It's just, it's interesting.
00:22:16.902 --> 00:22:22.102
Over here, the finance CFO person and I still see us making these mistakes.
00:22:22.112 --> 00:22:23.602
So don't feel bad.
00:22:24.102 --> 00:22:25.102
We're in this together.
00:22:25.551 --> 00:22:29.942
So I really want you to look at your business and do a systems check.
00:22:30.392 --> 00:22:33.281
Do you have bank accounts designated for your business?
00:22:33.332 --> 00:22:34.771
And if you use credit cards as well.
00:22:35.221 --> 00:22:36.721
Do you have accounting software set up?
00:22:36.771 --> 00:22:41.951
And again, feel free to send me a message or book a call and we can chat about the best system for you.
00:22:42.402 --> 00:23:01.642
As far as the accounting software goes, are you doing your financial check ins daily, weekly, monthly, quarterly, annually, and looking at the metrics that you need to track, are you doing tax planning at least quarterly, and then a big one annually to make sure that you're set up and you have a strategy for your taxes?
00:23:02.092 --> 00:23:03.291
Do you have the reserves?
00:23:03.412 --> 00:23:05.501
And if you don't, what can you do to start growing them?
00:23:05.511 --> 00:23:09.301
So that you're not in that hand to mouth constant struggle.
00:23:09.751 --> 00:23:11.001
Oh, we have lived that.
00:23:11.281 --> 00:23:14.092
And I can tell you it feels so much better on the other side.
00:23:14.541 --> 00:23:17.672
And then finally, making sure you understand cashflow.
00:23:18.112 --> 00:23:21.281
And then managing it effectively, especially with that cashflow forecast.
00:23:21.311 --> 00:23:24.902
And if you want more information on the course that we're building, please reach out.
00:23:24.922 --> 00:23:27.352
I'd love to chat with you and see if it's a fit.
00:23:27.422 --> 00:23:35.612
We I always say we because Eric and I have built every business together and this is me, just me.
00:23:35.951 --> 00:23:37.842
And I've got to change that.
00:23:37.882 --> 00:23:38.701
It's so funny though.
00:23:39.152 --> 00:23:41.041
If you want info on that, please reach out.
00:23:41.102 --> 00:23:45.832
I would love to have a conversation with you and see if it's something that's a fit.
00:23:46.122 --> 00:23:52.122
I am going to be launching it in January, February at the latest.
00:23:52.201 --> 00:23:52.912
And.
00:23:53.362 --> 00:23:57.071
We'll probably not launch it again until the fall.
00:23:57.102 --> 00:24:04.701
Just with a baby on the way, you know, we got to make sure that everything is ticked and tied for me to go on some form of maternity leave.
00:24:04.701 --> 00:24:09.561
So if you're interested, please reach out and let's chat.
00:24:09.771 --> 00:24:16.571
And I'd love to know in your comments of the podcast, what's your biggest financial challenge as a business owner?
00:24:16.781 --> 00:24:20.432
And What do you think is causing that challenge?
00:24:20.672 --> 00:24:28.321
Just would love to chat more about it and see as you're building your financial systems and your framework what is, what are the struggles for you?
00:24:28.771 --> 00:24:30.801
So that's all I have for you today.
00:24:31.291 --> 00:24:53.481
Next time we're going to talk about financial statements and how to read them and how to leverage this in your business because I know I talked very high level about P& Ls and cash flow statements and a little bit about the balance sheet, but knowing how to read these things can absolutely change your business because you have the clarity in knowing what the numbers are saying.
00:24:53.682 --> 00:24:59.142
So come check it out and remember small steps, bigger rewards.
00:24:59.382 --> 00:25:01.511
Remember your future self will thank you.
00:25:02.011 --> 00:25:02.711
See you next time.