Wendy sitting in a chair and smiling.

Getting Past the Dread of Numbers

Most of us were not trained how to handle money.

We had many lessons in math, science, reading, writing, and history in school, but not many classes revolve around accounting and managing your finances. If you didn’t like math, you probably avoided accounting classes even if they were offered.

From a young age, I just seemed to know how to handle my money. I had a bank account and a check book I balanced. I started earning money from babysitting early on and then part time jobs where I deposited my checks at the ATM. I paid for my own car expenses out of my money and jobs when I was in high school. When I got my first job out of college, I made sure to sign up for the 401k plan to save for the future.

I’ve met many wonderful women who have started amazing creative businesses that are scared about the numbers. They are very good at the services they offer, but avoid the numbers like the plague.

Here are some things I’ve heard from women:

Bank accounts are only looked at when certain bills are due.

  • They are unaware of how much income they are generating and what expenses they need to cover with that income.
  • Fear the IRS but are unaware of how they can save some money on taxes.
  • Having a system in place like QuickBooks is time consuming and hard to use.
  • The cost of having an accountant may be more than they can afford.

Here’s a different perspective.

These are all valid concerns, but let’s talk about them and give them a different perspective.

Bank accounts are the place where your cash comes in and your cash goes out. It isn’t the best indicator of how your business is performing. If you were only using cash, this may be a good metric, but nowadays we all use payment apps, credit cards, and even loans. A business may have gotten a loan that increased the bank balance, but it isn’t considering that the loan will be due someday. Your balance sheet and profit and loss statement will take these factors into account.

QuickBooks can be clunky. They make updates and sometimes things don’t work. But that is why you need a professional that works with the software regularly to help you navigate these bumps and talk to QuickBooks help when needed. QuickBooks is still one of the best systems out there to bring all your income and expenses into one place and knit them together so you can see the whole picture. And it gets much easier once you know how to use it.

If you have your numbers in a system, you can start looking at where your income is being generated from. Can you increase that somehow (price increases, other revenue streams, more clients)? You can also look more closely at your expenses and see where all your money is going. When you are reviewing it regularly, you can make changes (like cancelling subscriptions you don’t need) and adjustments to make it easier to get your business to the goal you want. That could be paying yourself more regularly or putting aside profits for future purchases and growth or even investing.

Taxes are tricky and embedded in a lot of areas of business. There are Federal and State income taxes, self-employment taxes, payroll taxes, and property taxes to name a few. However, there are some ways to minimize those taxes. You can work with a professional to make sure you are taking all the deductions you can, especially mileage and home office deductions. You can open your own investment accounts to save for your future and lower taxes.

Hiring a professional saves money in the long run.

Hiring a professional to help you navigate your numbers and help with taxes can save you money in the long run. Let’s just look at the fees you pay a professional. To use a nice even number, say you pay your accountant $1,000 a month. The $1,000 is a tax-deductible expense for your business. At a Federal tax rate of 22% and a state rate of 5%, you’d be saving $270 a month that would go towards paying income taxes and you’d save another $75 or so on self-employment tax. Your accountant will likely find more deductions your business can take to minimize taxes further. The accountant may also find past errors with bookkeeping or tax filing that could generate more savings or even refunds. And the accountant would help you plan for future growth, which could involve increasing income and minimizing unnecessary expenses.

Book a Call

If you are ready to start addressing some of these areas in your business, book a call with me to discuss your current business finances, your goals, and how we can work together to get there.

My packages address all these areas of concern by helping you understand your current numbers, work with you to minimize taxes, and plan with you for future growth.