This week Jackie is back with Melissa Houston to discuss spring cleaning finances for business owners. Melissa is a speaker, Author and Forbes writer. She will be letting us know what it means to get your finances organized this tax season.
Are you one of those business owners who pile up receipts in a shoe box and get overwhelmed when it comes to dealing with numbers?
Money matters can be emotional, and you must understand how you relate with your money and what works. Your mindset is the real boss of you! Do not take it for granted. Melissa realized from her years of experience working with business owners and individuals that changing your mindset is the most important step.
Personal finance gets more airtime than finance for business owners especially small business owners. Some business owners feel shame when it comes to discussing their finances and that should not be the case.
Do you pay Yourself What You’re Worth?
It is easy to get distracted comparing yourself with the numbers that 7-figure business owners are doing and don’t realize that you can be a 6-figure business and still be making more money than someone earning more. Remember, it is not about revenue but what you get to keep at the end of the day. Stay focused and face your numbers head on with the mindset of improving how your money is being utilized so you can be in business for the long term.
So many entrepreneurs and business owner struggle with paying themselves and that is not a great way to operate. What is the point of having a business that does not pay you? Set up your business so it pays you instead of the other way around.
How can business owners get organized this spring especially around tax?
The best tip is to start organizing next year’s taxes the moment you file and not wait till the following year to do that close to the deadline. It is important to monitor your numbers month on month as you will end up in a situation where your finances become hard to manage. It is time to start paying attention to your finances, that way you can estimate how much you will be paying in taxes sooner rather than later. Talk to your tax accountant and they can give you an actual average of what you could potentially be paying in taxes before tax time. This will help you to put away that tax money in an account before you need will need to pay your tax bill.
This habit will also give you a level of confidence that your business is where it needs to be because you are tracking numbers that translate to how your business is actually doing versus going along and having no idea. Find a good bookkeeper, be proactive about getting your financial statements monthly and manage your expectations so you get to sleep well at night. Going through your numbers will also let you know how your business is doing financially. For example, are you profitable? Are you spending money on activities that is generating enough revenue for the business? Is your business focusing on the right activities? How will you know this without looking regularly on your numbers?
Focus on Making More Profit instead of Just Paying Less Taxes
Some business owners want to earn less, so they pay a smaller amount on taxes. This mindset is so wrong. Of course everyone wants to save on taxes but not at the cost of making money in their business! It is highly recommended that you work with a highly qualified tax accountant that gives you great tax saving strategies and your business begins to earn more and more income. Maximizing profit and minimizing taxes is a good problem to have versus not making any money in the business.
Meet with your accountant outside of tax season
Melissa recommends working with an accountant that is very collaborative and meets with you ideally on a quarterly basis instead of just at tax time. Meeting with your accountant once a year is going to mean that important information about your business does not get discussed because the accountant may be too busy. It’s also too late to plan to reduce your tax bill as well.
Choose Your Financial Team Wisely!
Remember you are the boss, make sure you hire an accountant or financial professional who is going to meet you where you are, makes you comfortable and gives you that sense of confidence around your financial circumstances. As a business owner, feeling that your finances are in order will make all the difference in pushing ahead with your business! Get your tax documents together and get it in as early as you can so that you feel financial peace instead of a sense of overwhelm! Do not procrastinate any longer and when you start, keep that momentum going.
Mellissa can be reached at Shemeansprofit.com and you can download the five step growth map to a profitable business here https://melissahoustoncpa.lpages.co/5-step-biz-finance-roadmap
Feeling overwhelmed about spring cleaning? Reach out to our team with your burning questions and you can take advantage of our free 30-minute strategy session. Reach out to firstname.lastname@example.org to book a session today!