E31: ASK THE ACCOUNTANT with michelle coard
Taking care of your business finances is vital to create a profitable and successful business. In this episode, Michelle Coard, from Business and Personal Accounting Solutions. Michelle talks about accounting taxes, business management, cash flow system, bookkeeping, payroll, and many more to help small enterprises and business owners maximize and create more profits for their business.
Michelle also shares some her best practices and things to consider on starting your business when it comes to thinking of your business finances. Don’t miss this very informative and interesting episode!
What Business Owners Should Look for In an Accountant?
3:48
If you're looking for an accountant, then you want to look for someone depending on where you are in your budget. Your accountant should be able to advise you how do to your own books, how to track your expenses, how to set up or prepare your taxes. It should be really straightforward especially at the beginning. If you don’t want to get a lawyer to help you regarding your business structure, go to your accountant. Look for someone who can help you tie in your business structure to how to plan for your taxes.
5:58
You want an accountant that understands the differences of business expenses for different types of services or businesses. Your accountant should be willing to train you on doing it as opposed to someone just doing your books for you.
Best Practices for Service Based Businesses to Prepare for Tax Season
8:42
In the beginning, even if it's something you have to purchase for that client, you need to start determining what is specific for your business that you can use over and over, or what you will only use for one client.
9:28
Separate out the operating expenses or overhead, which is general. Then the cost of goods sold or cost of services sold per client. Start tracking how much does it take to provide your service to this one client.
10:00
Pricing In the beginning is also going to be important. That plays an important factor into what you can cover. A lot of people go for a zero tax mindset. But if you don't have any profits, you're not going to grow your business.
10:16
Make sure you're recording your expenses because you need them to be less than your income. It’s also going to help you price better for the next client taxes.
10:29
Start tracking what’s coming in and what’s coming out. If you don't track it, you're going to end up either paying overpaying taxes or underpaying it and then getting penalized in the end.
13:22
You have to track and know your cost associated per client and overall.
Building a Profitable Business While Saving Money and Paying Yourself
15:20
Set aside money or set up some bank accounts to filter the money out and start reserving a portion of it. But you have to sit down and look at your profit. Plan your spending, You're going to have to look at what comes in, and then you can start with just 5% paying yourself.
17:11
Know how much you need to pay out each month. Get clear on that and put it in a payables account. Have a profit account where you literally just go ahead and move some money to that account. Be selectively spending in the beginning. But that money will cover the slow seasons. Designate a percentage or a portion of income for yourself, until you get to the point where you can either pay yourself per job or pay yourself by the hour or monthly on a regular salary.
18:56
We have what they call growth net profit. Here’s where you need to distribute that profit. You have some savings, you can pay yourself and pay your bills. You can prepare for the next sale because sometimes we have to pay for stuff up front before we can get it back from the client. That's usually called bill back.
Follow Michelle:
bpaccountingsolutions.com