How to get out of accounting overwhelm

Close your eyes and imagine a time where it is the end of the month and your bookkeeping is complete, accounts reconciled and you pull your reports and you actually enjoy the process of reviewing your numbers and you are excited to see how well your business is doing. This scenario feels so out of reach for so many business owners and it doesn’t have to be this way.

This year we worked with a client who was a very successful wellness coach, her business was scaling by leaps and bounds this year but she didn’t understand why she didn’t have enough cash to pay all of her contractors and bills every month. Sound familiar? 

Jenna hid from her accounting because it was confusing to her and she didn’t have time to learn a new skill. 

After several months of the same circle of confusion Jenna reached out to us for help. After 3 months Jenna has been able to confidently make more strategic spending decisions so that she can decrease spending and increase her profits (this also means Jenna is taking home a bigger paycheck). Now I promise you this is not magic.

How can you use these same strategies that we taught Jenna in your business?

• Set revenue goals next month, quarter and year?
• Start with the gross sales amount-where do you want to be in gross sales? 
• How much money do you make per product/service on average? 
• How many clients/products do you need to sell each month in order to hit this sales goal? 
• (Average sales price) / Total Gross Sales goal = # of clients/products 

 

• Determine your financial goal for next month, quarter and year?

 

For example will you be increasing advertising costs in an effort to increase your revenue or will you be decreasing expenses in order to maximize your profitability.  

• Make business decisions with your financial data 
• Your numbers are trying to tell you a story, it’s your job to listen to the story and use that information to make better business decisions.  
• Review your sales by asking yourself
• What percent did your revenue growth year over year?
• What product or service has the highest sales? How can you capitalize on this momentum? 
• What product or service has the highest profit or lowest cost of goods sold? What product or service has the smallest margin? Do you need to continue to offer that product or service? 
• Review your expenses
• What percent did your expenses grow year over year? Why?
• What expenses are consistent month over month? Do these expenses support your business and your goals? 
• Are your expenses growing faster than your revenue? What changes can you make to prevent this from continuing?

 

Use these questions as a guide to review your financials this month and every month. 

It’s time to listen to stories your numbers are trying to tell you so you can use that information to grow your business. Listen up!

If you need additional support in analyzing your financials and creating profits in your business you can find additional resources here: www.profitplannerbookkeeping.com

Danielle Hayden is Co-Founder of Kickstart Accounting, Inc. in Cleveland. Kickstart is passionate about helping entrepreneurs take accounting off their plate, get confident about their bookkeeping and finally understand their financials. As a Chief Financial Officer for over 10 years, Danielle loved accounting, but felt like something was missing while just helping investors and board of directors of large companies. That’s when she realized she had a certain thrill for helping entrepreneurs, especially women, who were breaking the rules of business in order to create something amazing – something the rest of the world didn’t expect them to do.