Money
Matters: How to Systematize Everything from Invoicing To Tax Preparation
Here’s an all-too-common
scenario: A seemingly successful coach (or service provider) is hard at work
growing her business. She’s working lots of hours, and her hourly rate is respectable.
But her cash flow is dismal.
Why?
Because she’s working so
hard that finding the time to actually take control of her money is impossible.
Invoices don’t get sent on
time. Past due balances are ignored. Taxes aren’t done. And maybe worst of all,
she’s got dozens of recurring payments that go out automatically each and every
month, and she has no idea what they are or if she’s even using the programs
she’s paying for.
Sound familiar? Sadly,
that’s exactly what a lot of “successful” businesses look like. When you work
at home, and you’re accountable to no one but yourself, it’s far too easy to
let these little things slide until, like an avalanche, they have a devastating
effect on your business.
The good news is, cleaning
it up is easy, when you take the time to put some trusted systems in place.
Start with your billing.
Sign up for (and use) a system such as Freshbooks or Harvest, which will
automate your timekeeping and produce an invoice with a single click of a
button. Then put your billing day on your calendar as an unbreakable
appointment.
Log into your timekeeping
app, generate your invoices, and click send. You’ll be done in a jiffy. Not
only that, but most billing systems automatically send follow-up messages for
unpaid invoices, so you don’t have to worry about tracking down those slow
pays.
For your expenses, use a
single system. That might be PayPal or a dedicated credit card or even your
business checking account. Whatever it is, be sure it has a reporting feature
that will allow you to send monthly statements to your accountant. At the end
of every month, bundle that up with your sales report and your receipts, and
send it off. When tax time rolls around, you’ll be sitting back with your feet
up while everyone else scrambles to find documents and update their accounting
system.
If you do your own taxes
(kudos to you!) then look for tools that will talk to each other easily. For
example, you can download a Quickbooks file right from PayPal for super-fast
reconciliation at the end of every month. That alone will save you hours of
“doing the books.”
Just putting these two
simple systems in place can easily save you 10+ hours per month, but the even
larger benefit is that the money work will get done. And what that will do for
your cash flow is priceless.
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