Labour Day has come and gone, and with it marks the end of summer playtime. Whether or not we have kids in school, we think of September as “Back to School” time. Being business owners, it means that we start tightening up our laissez-faire attitude of the summer. This is the perfect time to take a look at your business financials and really consider where your money is going.
All of our bookkeeping clients get the standard Profit-and-Loss (P&L), P&L Detail and Balance Sheet each month. Many use these reports to make decisions about the wisest investment of their resources. Others simply watch the reports come in, and aren’t really sure what to do next.
Here are a few suggestions for diving in and making an impact going into the end of the calendar year.
File Your Taxes And Pay Back Taxes
You may wonder “Why think about taxes now when the year hasn’t ended?”. The fact is, especially in this year of the pandemic, many have filed extensions. Now’s the time to catch up on those filings and payments, and prepare for the upcoming year.
If you’ve been working with our Money Coach program, you’ve already been setting aside money to pay your taxes. However, if you haven’t done so already, September is the perfect time to analyze your business income and see if you need to set aside money to pay taxes.
The last thing you want to be doing is make a huge payment to Canada Revenue or the IRS unexpectedly. Saving for your taxes each month allows you to spread the payments over a longer period of time, so you’re not scrambling to find the money when you file your taxes in the following year.
Collect Outstanding Accounts Receivable
September is when we’re all getting serious, and really start paying attention. This is a great time to follow up on outstanding accounts receivable. Do you have clients that haven’t paid you in weeks, months, or longer? Start reaching out to people that owe you and get paid!
If you’re not comfortable doing the reach out, ask us, we’re really good at keeping the emotion out of asking, and have a great success rate of recouping what is owed to you. This gives us time to determine what may need to be written off as uncollectible by the end of the year.
Stop and Take Account
It happens, summer is either busy in the business or filled with holidays and enjoying being away. Now it’s time to dive in and see how much and how you’re spending your hard earned dollars. What are your greatest expenses?. What is necessary versus what is discretionary? Maybe it’s time to cut costs in one area to be able to invest in another that will generate more revenue.
We have 115 days left in the year. We can usually see impact in 90-day increments. What can you accomplish in the next quarter in terms of decreasing expenses and increasing revenue?
Evaluate Your Budget
If you had a budget for 2021, now is the time to go through it and make sure you’re on track. Have you been over or under budget each month? If you’ve been over, it’s time to reign it in. If you’ve been under, consider where you can reallocate those funds to have the greatest impact.
If you’re WAY off your budget or don’t have one at all, it’s time to have a conversation with Monica about the Money Coach program. In this program we can assess where you are now and set a realistic budget. In addition, the accountability conversations help keep you on track and use her 20+ years’ experience to make the appropriate adjustments each month, so that you have no surprises at the end of the year.
Start Preparing Now for the January Deadlines of Employee Reporting (1099s and W-2s for our US clients).
In the US, if a contractor has earned over $600, you’ll need to send them a 1099. Do you have all the information at your fingertips? This would include legal name, address, social security number or EIN for businesses. Virtual Bookkeeping will send you reminders about this, and starting now, will give you time to collect the information from often busy contractors.
Although these aren’t due until January 31, you don’t want to spend your holidays tracking down the required information, right?
So how’d you do? Is everything on the list ticked off? AWESOME! If not, let’s get you on the schedule and discuss what you need to have better insight into your business and to make more informed decisions.
