How To knock out several goals at once!
photo by ed ludwick
The following is a guest post by Mike Vande Brake, partner at Vande Brake and Baker CPAs.
It’s nearly time to begin making those New Year’s resolutions, the wishful thoughts borne out of our guilt for the things we typically let slip. Lose weight. Exercise more. Eat fewer sweets. You get the idea.
We can all come up with something we should be doing or at least something we ought to do better. Sometimes these things are trivial, and if we don’t keep our resolution, the impact is negligible.
But there are those rare occasions when a New Year’s resolution can completely change the course of your life.
Even in our business lives, we set goals: I will not avoid the person in the next cubicle but will, instead, be friendly and open to conversation even though my inbox is a mile high.
Yet for many business owners, particularly new ones, the day-to-day trials of working with clients, answering phone calls, or completing the day’s task list can be overwhelming. The thought of setting a goal other than “Be home by 5:30 p.m. one day a week” is a pipe dream.
There is one goal, though, that may make all of your dreams come true: organization
Drowning in Paper
Do you keep your receipts in a shoebox? In a drawer? Do you wait until the end of the year to balance your checkbook? Does the idea of using a computer to track your finances send you into a cold sweat?
Being organized can be daunting, particularly when you’ve never spent a lot of time perfecting the skill. Do you look at the piles on the floor and wonder if you can actually drown in a sea of paper?
You’re not alone, trust me. As a CPA, I have encountered organization at its worst…and its best.
What do you think about this scenario?
You always know how much money is in the bank and, therefore, you know you can hire more staff or move out of your cramped office space and into something bigger. You know the balance on your credit cards and can weigh that against your cash flow. You can calculate your profits and losses with little energy.
Does this sound good to you? How about this?
It’s November. You have a meeting with your tax advisor, and you bring with you a print-out your financial statements or even just a simple spreadsheet with a summary of your income and expenses. Your CPA uses the numbers to estimate your tax liability and then discusses with you several options you have to save tax money. Now may be a perfect time to purchase the equipment you need to make your operation more efficient. Maybe this year’s tax liability isn’t so bad, so you ought to wait to purchase an asset until the beginning of next year. The possibilities are there, and yes, you could save money by reducing your tax bill.
When all is said and done, organization gives you the control to make wise financial decisions and avoid penalties that result from poor planning. Just think, you can plan now to set aside money long before the tax bill is due. No payment plans, no extensions, no surprises.
What Would Martha Do?
My wife loves Martha Stewart. We’ve considered adding a line in our household budget specifically for her “Martha-inspired projects.” Take a deep breath. Being organized doesn’t have to make Martha proud. It can be a simple system, like filing receipts by month and reconciling your various bank accounts and credit cards on a regular basis. It can (and should) include computer software that, though initially costing you a little extra time to learn, can track your finances, investments, and notes payable with a few keystrokes. You don’t necessarily have to go back in time, either. You can start today and work forward.
Regardless of what your organization system looks like, this will always be true: you rarely will be surprised by a bounced check, you will be armed with the financial information you need to make wise business decisions, and you will save money.
Make the resolution to get organized. It might be first resolution that can change the course of your business forever.
Note – I can highly recommend Mike as someone that can really help get your financials organized and provide quality advice and support. He’s not your stereotypical CPA – he’s friendly, easy to talk to and is comfortable with all aspects of business. – Shawn
Shawn Kinkade Kansas City Business Coaching