Incite-FUL Profit Podcast | Incite Tax
When business owners have clarity in their financial actions, they’re able to use their wealth for good. We're here to provide clear communication on steps you can take to accelerate your profit and build financial resiliency as a business owner. Profit first!
Incite-FUL Profit Podcast | Incite Tax
Catch Up on Your Bookkeeping
Stop letting messy books hold your business hostage. In this video John gives the no fluff options to getting caught up.
And remember...the #IRSSUCKS
John Briggs | Tax Genius
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What's the best way to catch up on my books if I haven't really touched them all year? I love this question. Look, not to be Debbie Raincloud here, but the first step is to stop being lazy. I get it. You started your business, and most of our clients—and the world—don’t have an accounting business. So, this idea of accounting and bookkeeping probably isn’t your favorite thing. Totally get that. But I believe it's a really important tool that we, as business owners, can use to grow our business. It gives us information that helps us make better decisions.
Honestly, the answer is—you just have to get it done. A couple of things I would think about: First, do I have some cash flow that I can use to pay someone to do my bookkeeping, including the catch-up work? If I have some of that, it’s better to use somebody who does this all the time versus trying to tackle it sporadically. Consistency is better, and having someone skilled in it is better.
No offense to our spouses or children or best friends or clients that don't have accounting experience—but they’re not the right fit to be your accountant. So the first question is, do you have some cash flow to leverage? Use that to get some important information that can help you make better decisions. Because if you're in the situation where you're asking how to get caught up on your books, that means you're not currently using your books to make financial decisions.
Another great thing to do when it comes to financial decisions is to review your expenses. In my book, Profit First for Microgyms, I have an entire chapter on how to analyze expenses. There are nine questions I love, but I’ve also read books by Keith Cunningham—the real Rich Dad from Rich Dad Poor Dad—and he has an even simpler way to look at it. I bring this to you via Keith Cunningham.
The idea is to look at your expenses and ask: “Does this expense bring in clients or help me retain clients?” Ultimately, that’s what we’re trying to accomplish in business—to stay relevant, to get new clients, and to keep current clients. So, if the expense doesn’t do that, cut it. Or figure out how to do the same thing for less money.
Go through your expenses. You’ll probably free up some money. With that freed-up cash, look at hiring a bookkeeper to help you get caught up.
Now, if you want to go the do-it-yourself route, the only solution is to get it done. You have to schedule the time, stay focused, and put in the hours to do the bookkeeping. It doesn’t do itself.
So, if you haven’t really touched your books all year and want to catch up, your options are simple: either do the work yourself, or find the cash flow to pay someone to do it. I know that’s overly simple, but often those are the right answers.
Remember, profit is a choice. Have the courage and wisdom to choose it.