In today’s episode on The Render Podcast, we are continuing our Finance Series and talking about everything that comes along with keeping up with your finances within your business. Without maintaining certain steps along the way it only gets more difficult to manage when it comes to the end of the year or when numbers are due (trust us, we have been there).
If this all feels overwhelming and daunting to you, think of today’s episode as a key and stepping stone to the first step in accomplishing these tasks for this year in business! We understand that this can feel like a lot, but we are here to help and cheer you on!
We are going to start with what not keeping up with your finances can do and lead to. When you are not good at keeping tabs on your finances and what is being spent where, and how your expenses are categorized in Quickbooks Online, it will inevitably create more havoc in the long run. We get it, as a creative human who does that best, your finances may not be a top priority. However, if you want to continue running your business successfully, you must prioritize your money.
If you are unsure of where to begin, this episode is definitely for you as we go through tasks that may seem small, but will save you so much time and energy in the end. Smaller tasks that you could be doing daily will be the game changer in your approach and only be a win for you! As mentioned last week, we highly suggest you use Quickbooks Online (and no, this is not an ad, we just really love it). This software can integrate with just about any other software you may use and this service helps get you into a good routine to stay on top of your financial tasks!
While there is not a lot that can be done daily, we recommend looking at your accounts daily to keep track of your numbers and know what is going in and coming out. You could take 10-15 minutes and categorize revenue and expenses where they need to be. Another task you can do is assess your Accounts Receivable and get a forecast of what is going to hit the bank accounts and what to expect revenue wise. Alongside this, we check on our Accounts Payable and see what costs and expenses are coming out of the account and keep track of where your money is going. Rather than spending an hour at the end of your work week, work smarter (not harder), and get ahead on these tasks by doing a quick “check-in” on your money!
As we mentioned in our daily tasks, we can still do a check-in on our finances and look at our Accounts Receivable and our Accounts Payable for any payments or payables that may have come in or out of the account. We also run a P+L report (Profit and Loss) to check on any changes we may need to initiate to make sure the company is running smoothly and in line with our yearly budget. Doing this on a weekly basis helps initiate any changes that may need to be made and we can assess monies as well. Maybe you can predict that you will be a little behind this week, or maybe an expense is coming out that slipped your mind — checking in on your money helps you know where you are and what you can predict.
This is also very important and by checking in monthly, you can see overall what you spent that month and how to plan moving forward. Doing this monthly can help you analyze your money and set a financial goal or see the trend in expenses. More on Data Analysis & Strategy in next week’s episode!
Something that we do monthly is run our tax report. We pay on a monthly basis and when you do this, payment is typically due around the 20th. We run our report at the beginning of the month so we know what we owe and assess how our money is being spent. This task typically takes about 30 minutes to an hour to complete and we like to do this out of the office — working in a quiet space with no distractions is better for focusing on making sure nothing is missed!
For your quarterly finances, it is important to look at the trends and analyze this based on historical expenses in your business. If you were in business during 2020, you know that events can change overnight and stay in the know for these potential shifts in this industry is a great component to stay on top of when running a business. We will touch more on this next week, but this is something to still think about right now!
To sum all of this up, let’s touch base on this on an annual basis and approach this strategically. When you have looked at your stats and run the numbers from the year before, look at the data you have pulled from checking in on your numbers daily, weekly, monthly, and quarterly. Do a comparison to the previous year. When you are checking your money and comparing the stats, you can see how you could shift an idea or plan moving forward for a better turnaround.
Have you heard of Analysis Paralysis? If you are solely looking at the numbers, yet not using them as a vehicle or a tool to make better decisions for your business, what is the point in all of this work you have put in? Yes, we are giving you a little bit of tough love, but we all need to hear it at one point or another.
As always, we are so grateful to have you as part of our Render Podcast Community and we hope that you are loving the Finance Series! If you would like to leave us a Review on Apple Podcasts or Spotify Podcast, we would love to hear from you! Your input and what you are loving about what we are offering you is key to making sure we are still bringing you the content you want and can benefit from. Until next week, friends!
Raven Scott | Podcast Manager
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