The Master Guide to Your Business Finances
When you started your online business, you most likely didn’t think so much about the financial aspects of your business.
All that really mattered was that you were doing what you were passionate about and sharing that with the world.
Yes, you wanted to make money, so you were able to easily find a way to collect payments from your customers. But the other money stuff, like your bookkeeping, your accounting, taxes, paying yourself, having a business budget, and even analyzing your business finances, weren’t things that even crossed your mind.
And tracking all of the money stuff and paying taxes isn’t something you really had in mind when you started your business.
Taxes and bookkeeping and accounting are the last thing that is thought about when you think about starting your own business.
Unless you have college degrees or further education in accounting or business of some sort, this stuff was nowhere near your list of priorities.
It might have been in the back of your mind since you do file your tax returns on an annual basis already. Well, at least I hope you file your tax returns.
“There are only two guarantees in this life: death and taxes.”
You can’t get out of this life alive. And you have to pay taxes. No matter what. Unless you can find a way to not pay them, or you decide to evade your taxes.
In order to properly pay taxes for your business, you also have to do your business bookkeeping. So it’s all related.
Since my goal is to make sure that you have all of the money stuff set up and running correctly, let’s go through all of the things you need to have set up in your business.
Your Mindset Around Your Business Finances
There are three main mindsets when it comes to your business finances.
- I have a way to collect money from my customers, that’s all that matters.
- I have everything set up and I know how to do it all myself.
- I am hiring the help that I need to make sure that it is done correctly so I don’t have to deal with it myself. Time is money in my business.
In my experience as both an auditor and a business owner, the majority of business owners fall into category number 1.
The only thing that really matters is that they have a way to collect money from their clients.
The money can come in.
When tax time comes around, then we’ll figure out what needs to be done. Until then, it’s all good.
As long as the money is coming in, you can pay your bills and keep your business running.
When you are a business owner, right now that’s all that matters.
But the money stuff can get quite stressful, especially when you realize how much actually needs to be done for your business finances when you haven’t touched it. Ever.
Your business finances don’t have to be stressful though.
They don’t even have to evoke that panicked feeling you get because you think you could be doing something wrong that is going to be some kind of automatic red flag to the IRS.
You can actually love sitting down to do your bookkeeping or looking at your financial reports.
Ready to start feeling that way? Good! Keep reading and we’ll walk through how to get everything all set up the right way.
Hiring Accountants and Bookkeepers and Other Financial Professionals
As an entrepreneur, you may have the mindset that you really want to do everything for yourself. You really want to run your business on a shoestring budget and only invest money where you really have to.
But there are 2 areas where you should invest in your business and you really shouldn’t try to go the cheap route.
These 2 areas are: legal and your money.
You are going to want to hire lawyers when you really need them, not try to troubleshoot everything for yourself. And you are going to want to hire an accountant, possibly a bookkeeper, and maybe even a financial planner for your business.
Can you learn how to do these jobs for yourself? Maybe. The bookkeeping, yes, most likely you can learn how to do it for yourself. But the professionals are always doing research to make sure that they are giving you the best benefits of the laws and regulations for your business.
Do your business a favor and hire professionals to help you.
Find Professionals who Understand Online Business
When you are looking to hire legal and financial professionals for your business, do your research.
The most important point you need to get across when working with these professionals is how well they understand online business. And then how well they understand what you actually do in your business.
There are professionals out there who are not up-to-date on how online businesses work. Things that you would normally use for your business in the online world are different from what brick-and-mortar businesses use and the professionals don’t completely understand this.
You can use this list of questions to help you with hiring a bookkeeper for your business. They will also help you with hiring an accountant, a financial planner, and a lawyer for your business as well.
I can’t stress how important it is that you find a professional who understands your specific business when you are hiring them.
I spent months cleaning up a client’s books one time because she hired an accountant who did not understand her business and they told her they didn’t understand it. They classified transactions to random accounts because they had no idea what the transactions were.
And on top of those incorrect classifications, they also had her PayPal account linked to her bookkeeping software twice, so they had duplicate transactions.
Duplicate transactions lowered her taxable income incorrectly. While we did catch the duplicate transactions before the tax return was filed, she was expecting to pay less in tax than she ended up having to pay because her bookkeeping was done incorrectly.
Always ask questions when you are hiring a professional and make sure they understand your specific business.
There will be a Learning Period
When you hire a financial professional to work with you in your business, even if they understand online business and your specific business, there is still going to be a learning period between you and the new professional.
It’s just how it works with financial professionals.
But the most important point is that you both have to be communicative and open with each other.
Are you a Nerdy Money Lover or a Fearful Financial Failure?
Now before you actually answer that question, think about which one you really want to be.
It doesn’t matter if money (or math!) isn’t your strong suit. But you are a business owner now. You need to pay attention to your money and handle it with ease on a regular basis.
And if you need help with learning how to do that, then get started with this 5-day boot camp to get your business finances set up and running properly.
I am a former government tax auditor and I have taken everything I learned in my time as an auditor to help you make sure that you have everything set up and running correctly and efficiently. If you’ll have me, I want to be your guide on this journey to making sure your business money is correct and working for you the way it really should be.
So join this 5-day boot camp and let’s get started on this journey together today!
Your Business Money
- How to Properly Set up a Business PayPal Account
- Do I need to have separate bank accounts for my business?
- Find Your Best Business Bank Account
- How Can I Collect Payments in my Online Business?
- How to Use the Mass Payment Feature of PayPal
Hiring a Bookkeeper and/or Accountant
- What’s the Difference: Bookkeeper vs Accountant?
- Is There a Best or Worst Time to Hire an accountant or bookkeeper?
- Why you need to hire a bookkeeper for your online business
- Why you need to hire an accountant for your online business
- Why you need to hire a financial strategist for your online business
- 7 Reasons Why Finding a Bookkeeper is Like Dating
- The Reasons Why You Should Outsource Your Bookkeeping
- Questions You Should Ask Your Potential Bookkeeper
- Working with a Bookkeeper: How to Get the Most Value out of a Bookkeeper
- Most Common Business Bookkeeping Mistakes to Avoid
- Tips for Easy Business Recordkeeping
- How Often & When Should You Be Doing Your Bookkeeping Tasks
- What to Expect When You Hire a Bookkeeper for the First Time
- 5 Easy Accounting Tasks You Should Be Doing Weekly
- Bookkeeping Mistakes that are Screwing Up Your Finances and Your Business
- Are the free bookkeeping programs hurting your business finances?
- How can bookkeeping help you in your business
- Easy Bookkeeping for the “I CAN’T DO THIS!” People
- How to Get Past Your Bookkeeping Overwhelm
- Most Common Bookkeeping Setup Mistakes
- Why bank reconciliations are important for your business
- Top Bookkeeping Frustrations for Business Owners
- Common Bookkeeping Misconceptions
- How to Stop Wasting Time with Your Bookkeeping
- Will bookkeeping and accounting be replaced by robots or AI?
- How to Catch up on your Bookkeeping
- What is the Best Version of Quickbooks Online Cloud Accounting for Your Small Business
- The Top Reasons why you should be using Quickbooks Online
- The Pros and Cons of Freshbooks Online Cloud Accounting Program
- How to Choose the Best Accounting Software for Your Online Business
Paying Employees, Contractors & Yourself in Your Business
- Paying Yourself in Your Business
- Do you have employees or independent contractors?
- How much do you pay yourself in your own business?
- Can you pay your child in your business?