Do you ever wonder what numbers are most important to track in your business? Well, today I have bookkeeping expert Courtney Boudet with us, and she is going to break it down so that we can know that we are running a business that is financially strong.
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Welcome to the Breakthrough Mastermind Show. I'm your host, Jen Argue and I facilitate masterminds for women entrepreneurs who want to grow their businesses to help others and create financial independence. I'm so excited to have Courtney Boudet with us today. She's an expert bookkeeper and she's my friend. [laughs]
We have been friends since pretty much the pretty close to the beginning of my entrepreneurial journey, mm-hmm, in the online marketing world and we met at a Amy Porterfield conference [laughs] at the same table, and it was like a lot of us at that table. We just connected and we formed a mastermind. It was one of my early masterminds, mm-hmm and we masterminded, I think for three years. Yes, a hundred percent. Yeah.
Courtney is, um, responsible for helping me get my books in order from the very beginning. And if let me tell you if she can do that, she can help anyone. So, [laughs] yeah. And since then I have referred her to many of my friends, um, to get their books in order, uh, people who are just starting out and people who have been in it for quite a while and have, right, a huge income and are still using their personal cards, which exactly. I have learned from Courtney is a big no-no [laughs] it's huge. So I'm so excited to have you on today because I heard somebody say once if you don't know your numbers, you don't have a business, oh yeah, and that's always stuck with me. So, and just knowing the brilliance that you have, that you were able to get my books in order and that you were able to explain, uh, we use QuickBooks that you were able to explain QuickBooks to me in a way that I could grasp is... right. A pretty amazing ability that you have, but all that aside, like that's the nitty gritty, right? Is getting your books set up. But we wanna talk about today, the financials that are most important to track mm-hmm and why?
Yeah, no, that's very good. So the first thing that I will kind of circle back to is that it's so important to have your personal and business completely separate, especially if you have any kind of entity that is the S Corp or something of that nature, uh, because there is such a thing and I'm not a lawyer, this is not legal advice.
This is just working with tons of different businesses, such thing as piercing the corporate bail. So if you are using your business account like your personal piggy bank, you will... Kind of avoid all of the things and the good things about having an LLC and an S Corp. So it's really important that you really do have that clear differentiation.
And then if you do want to draw money out well with an S Corp, you're gonna pay yourself payroll, but with, you know, an LLC, you can just owner draw it. Like don't let the IRC, what you're paying personally on your business expense owner, draw it and then pay for that personally. Okay. So that's, it is a really big no-no to be co-mingling that's what it's called.
So that's the first thing that's really important is for your financials to track. Is to have the separation as soon as physically possible. And it's my understanding that if you are using a personal credit card, cuz sometimes business credit cards are hard to obtain after, until after you have some track record as a business, it's okay to have like a personal credit card as your business credit card, as long as that's only the only use you're using.
Right? So you're only putting business expenses. You're not putting any personal expense. So it does. That is the one thing I business checking. You have to have a business checking. I don't know why, like it it's just that that's one of the things like that's, that's kind of above my pay grade. I just am spewing the information that I have been that I know is best practice, but I'm not an attorney and I am not a CPA. Um, I am just a very knowledgeable bookkeeper who has worked with a ton of different CFO, CPAs, EAs and, uh, lawyers and you've been trained in profit first. That is correct. Yes. So I am also a profit first professional.
So I have been vetted by them and I use profit first in my own businesses, but I also teach people how to use it in their. Books, because that the transfers are something that can get extremely complicated if you don't set that up properly. And I am a huge advocate of the profit-first method, as soon as I started using that.
And I did what the book said to do the little test accounts, you know, to just test it and see that it works. It just was a game changer for my business. Um, being able to have the tax account and paying your taxes on time and all of those kind of things, it, it really helps with that for sure. Mm-hmm. Yeah, and I feel like that's a whole another podcast.
We should, yes, definitely get together and do that. We'll just have a profit first podcast next time. Perfect. [laughs] So what numbers would you say are most important to track in your business with the financials? When it comes to financials, you want to track your income? Obviously, when you're talking about it in a QuickBooks lens and I'm, I am gonna talk about it in a QuickBooks lens.
Zero same thing, um, I'm not very familiar with Zero. I am getting certified, so I I'm gonna get more familiar with that. But from a QuickBooks online lens, what I do with business owners, especially in my VIP days, which is what Jen was telling me to do from like, jump. She's like, you need to do a VIP day. I just did one.
This is for you. And so I'm like, awesome. And so she's the direct reason why I'm doing VIP days now. So when I do a VIP session, the first thing that I do is I'm talking about the strategy of what your company wants to track. How do you want to see your income? You do have limitations if you are using integrations.
So if you have an integration, so for example, I use Kajabi. So in order for Kajabi to send the information to QuickBooks. I have to use a third-party program to make it go exactly where I want because I track my income in different areas. So for example, I track my membership as its own line of revenue. I track my courses in its own line of revenue and my outsource bookkeeping.
I track in its own line of revenue. Why do I do that? Because when I read my profit and loss report, I wanna see how much money my membership made versus the outsource bookkeeping really quickly at a glance. So it's really important that even if it's not in QuickBooks, but you have another program or mechanism to track, like the different lines of revenue that you have in your business.
That's huge. It's huge because if you're not making money in a line of revenue, it's really important to see that as soon as physically possible so that it's not because if you're tracking it just by lump sum revenue, and there's nothing wrong with that. Like, all you're doing is this is the revenue that I made.
That's great, but it doesn't tell you which lines of revenue are making more than the others. So it's always best case in my opinion, to track exactly the lines of revenue. Now, you don't have to go crazy with it. You're not gonna track like 15 different lines of revenue. You're gonna do it in the most basic bucket.
Right. So for example, a general contractor, you can track your revenue in bid jobs versus time and material. You know what I mean? Or if you're a residential contractor, you could do residential versus commercial. Like it's really up to you how you want to track it, but it's best to track it. In a way that makes sense when you read the profit and loss report and you don't have to do a ton of work to get to the information that you're looking for.
Cause especially if you're using QuickBooks online, you're already putting in the work and effort to make sure that you're matching to the bank feed and all of those kinds of things. So ideally you want QuickBooks to do that burden for you by setting it up properly. So that, that's a huge piece. If you have not gone through a setup process with a... you know, QuickBook certified professional, uh pro-advisor is what we're called, then I highly recommend that you do it because it's the strategy of the setup that is huge for your business.
Um, so that's the first thing that you need to track, right? Is the income, but more specifically, what lines of income are coming into your business? And an easy-to-read fashion. Does that make sense? It totally does. And I like how you said, you know, get somebody to help you set that up. Because honestly, for me, that was the hardest part was setting it up and, you know, like, I'm just gonna say hiring someone like you would just is like a dream, you know because then it's done really quick.
It's done really well. Right. And you're set up for success to know like you're saying, and I love this input so much that you're telling us to be able to track where those income streams are coming from because that really makes a difference when it comes to our quarterly planning, exactly, and our financial goals to know what's working, and what's not.
For sure, even if you're not going to hire a bookkeeper long-term, you can still hire. Uh, I don't wanna say everyone, but there are a lot of ProAdvisors out there who do... do the setup for you, you know, just so that you can do it and then do the training. And that's actually, my specialty is I have a heart for small business owners who cannot yet hire a bookkeeper for many different reasons.
They can't afford it. They don't trust it yet. You know, all the things. So that's my heart is I really want to empower people to do their own bookkeeping. So if you're not like even wanting to hire a bookkeeper, that's totally cool. Still, hire someone to help you set. So then the next thing that we're gonna track is I like to track cost of services, cost of goods.
Not everyone needs to or wants to, but whenever I set up a file, I always put a cost of good for every single income or service cost of goods or cost of service for every income item. Because when I'm setting up a file, I'm doing it for future use, right? So just because you don't think that there's a cost that's associated with the income doesn't mean that down the line, there wouldn't be.
And the difference between the cost. And this is directly from my buddy, Jamie, who's the CFO and I'm, I'm gonna butcher it. But basically, if you could not do the revenue that you make, the revenue that you made, without this piece of it, that is a cost of doing business. Like that's the cost of service and cost of doing, uh, costs of goods sold.
So that is the differentiation between that and an expense. So if you keep that in mind, you can track those costs. So for example, uh, my husband is an electrician. Well, we have employees and without those employees, [laugh] we would not make money for the service, right? That there's literally no way unless it was just my husband.
So I am not putting them as an expense in my business. I'm putting them as a cost specifically for this it's a little bit complicated, but just go with me for a second. And if it's too much, that's fine. But, for I have different lines of revenue for my electrical company. So what I do is by I use their time sheets to, to get a percentage of how much labor that lump sum cost is in between those things.
So then that's how I use to make my profit margin, to see what my profit margin is for those things. Um, but like if you had, so for example, there are larger companies that have a specific service department, right? And that, that team only does service work versus, you know, new construction. That kind of thing.
Well, all of those service laborers would be in that service department, cost of goods versus the, the remodel cost of goods. So if that makes sense. And then if you're just not sure if it's something that your whole business uses like an office phone, could you do without an office phone? Yeah, probably, you know, it'd be harder, but you could, but that's like an overall global expense for the company.
So that's the difference between the cost of goods, slash services, and the expenses. But for some of you, you're gonna wanna track that because that really helps you come up with the profit margin per line, item of income. And then the last thing is expenses, right? What would that look like in a coaching business?
Would that be like a zoom, uhm, subscription? So for me, I use my zoom as a cost of goods because I could not run my membership without zoom. It is not an in-person membership. Now I've talked to my CPA about that, so that's good. The other thing is, this is something that you have to talk to your team of financial advisors.
What's good for your business? Do you know what I'm saying? But yeah, that for me, zoom, I put it in the cost of goods because I'm not using zoom as like, something that I do like I'm using zoom with you right now, but for the most part, I'm using it for my members to hop into that those office hours. So I could not make that income without that piece of technology.
Okay. Yeah. Yeah. Does that make sense? And then also like Kajabi, like that could be something else like that is without that platform, I couldn't make the sales, mm-hmm, but you know, that's where it starts to get the gray area. So for me, if it's clear cut, I could not use that piece of technology or that, you know, vendor bill, if I could not make money without it, then I put it there.
If it's kind of the gray area, I'll put it in expenses and just talk to my CPA about it. Okay. Yeah. And then, so for expenses, You're going to track all of the reasonable business expenses that you possibly can. Keeping in mind that they're, and again, I'm not a tax attorney, I, I'm not a CPA, I don't know the ins and outs of the tax laws.
What I do know is what people give me feedback as I'm sending my books to them for multiple clients on the year to year basis and how they want it. So for some people, you know, they're gonna track less expenses and just more generalized buckets. And then other people like it really detailed. My recommendation, if you're doing your own bookkeeping, is that you keep the expense buckets as minimal as physically possible, because some people like to have like the details with the sub-accounts under the sub-accounts, and it gets kind of granular that way.
It's easier to, miscategorize an expense in that manner. So it's really best practice to keep it. If you're doing your own bookkeeping, keep it as minimal as possible. So, you know, dues and subscriptions, that's a normal one that I see a lot in small business owners, office expenses, um, advertising expenses.
If you have a company vehicle, automobile expenses, if you have a vehicle, I get this question a lot. So I'll mention it. And I, it, it really depends on what your CPA wants you to do. It depends on what's best for your business. If you have an automobile that you use for partial, you know, personal partial business, I track real expenses, and I also track mileage, I do both because I never know which is going to be best for me. And depending on what my CPA wants me to do. I give him both. And that way I can track the real-world expenses through my QuickBooks. That's easy enough. Cause if I have to track it manually, I'm not gonna track it. I just know myself.
I'm not like... I'm not gonna keep gas receipts that I can't just put into a receipt reader. Do you know what I'm saying? like I'm not gonna do that. So I track it real-time in my business. And then if the, um, CPA wants to use mileage, cool, they just journal it out and make it to where it matches the tax return. And that's another thing is getting a, a year-end journal entry from your CPA at the end of the tax year.
So that your books stay clean, um, and match your tax turn, and then you can move forward. But yeah. So the biggest thing about expenses is that you're not trying to be, I don't wanna say shady, but there's but shady, [laughs] you know what I mean? Like you're not trying to like, like sweep under the rug as much of the personal expenses.
Like you really want to do, want to put expenses through that are actual business expenses because you also don't wanna get yourself flagged for an audit. And I dunno if you've heard but the IRS just hired like 81,000 tax agents for something of that nature. You know, I think it was in the hopes that they're gonna be auditing the, the big guys, but I know what that means is it always trickles down to the small business owners.
So it's really, really important, more than ever to make sure that your finances are in order that you have matching receipts. That is so, so critical. A lot of people are like, no, you know, the bank detail, especially with QuickBooks, it connects to your bank. And so there is some level of bank information and now what's actually really cool is that the bank information is pulling the receipts for you in some cases, not all the time, but in some cases. Uhm, but that is still not enough detail to where if you were audited, that that would pass the test, you really do need to have as much detail on that receipt as physically possible.
And if it's like already talked about this at the beginning, if you're in a store, say you're in target and you're getting some office supplies with some personal stuff. It is easiest, I know it doesn't feel like that at the time. To put the little glider or, um, divider down and put your personal expenses on your personal card and then do another transaction... for your business stuff.
Like I used to be a coupon, so I'm like, I don't care about doing multiple purchases in one trip. [laughs] you know what I mean? Because it's like, it's, it's totally normal to me, some people are like, ah, it's too, too much of a hassle, just do as best you can to get those receipts to where it doesn't have personal stuff on it.
Um, because you'll just be so glad you did that in an audit and to have the backup of all of the business expenses in an audit. Now, if you do set up a QuickBooks file, you'll notice that there's already like a pre-made chart of accounts in there with like standardized expenses. So it's really helpful to be like, oh, okay.
Yeah, job supplies, if job supplies is meaningful for you, then great use that, use that expense account. If job supplies means nothing to you and you don't have job supplies, then don't use it. You know what I mean? Use the expenses that you do, keeping in mind that there are certain things that are, you know, a partial deduction like meals.
But if you have a meal with an employee, that's a hundred percent deduction and again not a tax person. I'm just telling you what other CPAs have been telling me as I've been coding, because I, I do code those separately. I have a, a totally separate expense account for employee meals versus regular meals and those kind of things.
Also cell phones, you know, if you're using it for mixed use, meaning you're using some, it. Some for personal versus business, that's gonna be a partial deduction, not a whole deduction. Whereas an office line will be a hundred percent deduction. So you just, those are the things that you have to keep in mind.
Well, I think what you're doing is you're really helping us to... approach this in a very practical way that makes life easier for us, right? Mm-hmm, so you're giving us these practical tips along with just the knowledge of how to run a business in a sound way, when it comes to finances. Um, one of the questions I had in regards to receipts, because like you said, the government hired all these new, is it auditors?
I think it's mostly auditors. Yeah. Yeah. I heard that too. So keeping track of all of that stuff is really important and I like how you said keep receipts, but I'm wondering, you know, a digital copy of that receipt, good enough then can I get, a hundred percent? *** Yes, you do not have to keep paper receipts, especially if you're using QuickBooks or Zero, because I know Zero has hub doc built into it, which is great.
So I use, uh, Dex, which is a receipt reader. That's way more robust than the QuickBooks one. But if you are using QuickBooks, they have a receiver that a receipt reader that's very decent. So as long as you have the receipts somewhere digitally. Okay. That's all that matters because if they say I wanna see the receipt for this expense and they can pick it random, they can go through and they're like, I wanna see that receipt.
You have to provide it, [laughs] you know what I mean? So it's like, that's, that's pretty much it it's like, and you, and you don't know what they're gonna look at. You don't know what, if they're in a good mood that day, if they're in a bad mood, you know, it's just, they're just people. Um, cause I remember when I first started my business, I was really scared of talking to... IRS agents. But I have to tell you, when I call the IRS and speak to an agent, they have been super nice, like for the most part and like extremely helpful, not all the time, but like that could be anybody, you know what I mean? Like calling customer support is like a gamble. It's like sometimes you get a really helpful person, sometimes you don't.
So I do wanna take away that stigma of like, you know, because even an auditor, like does not mean that they're gonna be mean and like whatever they're gonna do their job. And they're looking to make sure that you know, that you have done your job. And that's the other big thing about being a small business owner and tracking all of the financials that I just said, because those are basic compliance.
The strategy piece about the income, that was a little bit next level of like, just seeing the income in the way that makes sense to you so that you can see your different streamline cause the, the IRS doesn't necessarily care about that type of thing. They just care about income, less cost versus less expenses kind of thing.
The IRS does not care that you don't know how to do your bookkeeping. Mm-hmm, they absolutely don't care, mm-hmm, it is something that they expect that as a business owner you'll do it. They it's part of compliance, you know what I mean? Yeah. So that is a big piece that I feel like people don't really take that into account is that, oh, you know, I don't know how to do this, but like you started a business and part of it is to know the compliance and that's really like that's statewide, that's Countrywide.
You have to know the laws that you're abiding by and the town that you're in and the state that you're in, in the country that you in. Or you have to [laugh] consult with somebody or pay, exactly, who knows that. Exactly. Yeah. So exactly. Yeah. I think most people starting a business, they have their, their sites set on other things, yes, then the financials, but the, but it really is smart.
What you're saying is it's smart and it's, um, expected that you do it. Exactly. Whether it's you or somebody else, but that, whether it's you or somebody else. I thank you for, thank you for saying that, cuz I didn't mean that you have to know those things, but your business as an entity has to somebody on that team needs to know those things.
Yeah. Yeah. I mean, otherwise, if you don't, if you've been running your business, which is not out of the range of normal, yeah, to be an entrepreneur that's even making likes, you know, way over six figures to not have your books done and to be using personal cards and to just be like, kind of like thinking if I don't look at it, it's gonna be okay.
You know the, right, the hostage, and, yeah, they're head this an type mentality. There's lots of people there. You, you know, if you're listening and you're one of them. Yes. You're not alone. You are not alone. And I think that's really important. I wanna stop there for a second because one of the things that I first paid for when I started my business was a little logo.
I had, I hired a, an artist to do that said shame free zone, because that was something that I remember when my husband and I started first started our business. I felt intense shame that I didn't know what I was doing. I like my first set of books, just so that we can be like super transparent here was a dumpster fire.
Like I went to school for photography. I did not go to school for business or anything like that. Now I'm a third generation business owner that kind of like figure it out kind of mentality. I've seen it modeled for me time and time and time again, same for my husband. Like we just come from families who were small business owners, but it wasn't like, I intuitively knew quickBooks and how to do it.
Like I knew how to do pieces of it because I had worked in my family businesses before, but I never knew the full accounting cycle. So it took me a lot of trial and error to learn that. And you know, it was when I first started working with a CPA who took the time to help me know why I did wrong, like things that were wrong on my first set of books when we were just a sole prop.
And like, it just took me that, and then the next level was working with a CFO who was like, oh my gosh, took me to the whole another level of like, okay. Yeah, this is like the compliance piece, but this is like the next level of like, and that's why I really learned how to set up... a setup... set books is from that CFO because, you know, he took me through the theory of it all and like, why...
How we wanted to set it up for that company. Cause the books were already set up. We had been using them for years. I, I was doing the compliance just fine, but then it just took it to the next level of like, Hey, no, like if you do it like this, then you can see this profit margin, all those kind of things.
Um, so I really learned by doing business. So that being said, like I just told you, my first set of books was a dumpster fire. So I had intense shame about... doing you know, about my financials and stuff like that until, you know, I worked with people who did not shame me, but taught me. So that's really important.
So that even if you think that there's somebody that you're like, oh my gosh, that person has it all together. I, time and time again, when I get in a set of books from somebody who comes to me and I'm like, oh, this person has it all together there. It's just gonna be a light cleanup. It's like, oh boy, you know, there's some things here.
So you are definitely not alone. If you are struggling with getting your finances in order, and it's not matching up, or you have reconciliation leftovers, like all those little things at the top of the reconciliation that was from years past that you don't know what to do with like, that's common. Like I'm dealing with that right now.
Like I, after this meeting, I'm hopping into a VIP day and doing, doing that kinda thing. So please do not let shame or fear that somebody's going to look at you any differently, hinder you from asking for help because bookkeepers CPAs, EAs, the, at least the ones that I'm talking to, cuz I align myself with strategic people, with people who are kindhearted and who love small business owners.
So if you find those types of support in, you know, any of those areas that I just said. You will not feel shame. You know what I mean? You'll just feel like, Ugh, the weight is lifted. That's how you should feel when you're talking to any of those people. [laugh] Yes. Which is why I think we're so aligned because I, I approach coaching in the same way.
It's a shame-free zone. Yes. But I have to say it's... like you are just who, if you're listening to this and you're like, oh my gosh, that's me. You are just not alone. I have different masterminds. I have one for women who are making six figures plus, mhmm, and half of them that come in, don't have their books done, right, and I've referred them to Courtney and Courtney's, you know, help them and they feel so good.
And it's been fast and easy. And, uh, yeah, you bring a lot of like order and joy [laugh] and peace to people's lives. [laughs] So, and I love, I just love that about you, that you have this background in photography and you're a musician too, yes, I am, yeah. I love, I love that you hold both. Both sides of your brain. So equally it's pretty weird, huh? [laughs]
Like that's not normal sometimes. I'm like, I I'm a weirdo sometimes, but that's OK. I love it. Like, I love you. I love you being weird. [laughs] I'm weird too. That's why we connect exactly. Oh, that's the best. Okay. So let's say all your books are in order, yeah, you've got all the categories set, you've been keeping track of receipts and you're confidently like letting a bookkeeper handle your books as a business owner, like in the coaching world.
If I were to connect, you know, and, and look at my books, if I were to like pop into QuickBook, mm-hmm what would I be watching for? Or if I were to ask my bookkeeper to give me a report, yeah, at the end of the month, what would be most important for me to be looking at? That's a really good question. So if you have an outsourced bookkeeper, they should be giving you a financial packet with the basics, which is a profit and loss report.
And you can get as detailed as you want, but a profit and loss report, a balance sheet, and sometimes statement of cash flows just for your, um, CPA, um, they may or may not want that, but, so that's my basic financial packet. And then I talk to the client and say, okay, what other information do you want? What other reports make sense to you?
Cause sometimes they want a budget. You know what I mean? They want a budget, they wanna create a budget and then they wanna see the budget versus actuals. That's really helpful. Um, so around September is when I start doing budgeting for, uh, the clients that have like that controller CFO level package.
And we build out a budget. We talk about what do you think your sales are for next year on a monthly basis. Um, and then what do you think your salaries are going to be like, how many people are on your team? So we go through an in-depth view of that, and that's really helpful. A lot of people like the budget piece, um, because then it, it helps you to forecast what you think is gonna happen.
And whenever I do budgeting with somebody, you know, we do three-pronged approach. So if you don't know your sales. The best way to know about your sales is historical. So if you do have a set of books that you can go back one to two years and see what, what were your trends? What months are higher than others?
What months are lower than others? You know what I mean? Mm-hmm, um, then that can help you really do the sales forecast, but we do best. Like big, hairy, audacious goals, mid-road, and then worst case scenario. Sometimes I call that the wheels fall off. Like if the wheels fell off, what would be the worst-case scenario?
I did that a lot during COVID and it just helps you to know. And it's so helpful to know, like, if like the bare bones revenue came in. This is what we would need to do. And then you can shift the budget, uh, accordingly. So that's the that's the revenue. So you're gonna, you know, budget for that. And then you're gonna budget for like I said, the salaries and then I have like a little salary spreadsheet.
I'm happy to, to do that every week for you. So if people are listening to that, I can do, um, that where they can just click through and, and get that, um, salary spreadsheet. It's a little complicated without explaining it. So maybe I can make a video on it too, but basically, it's like every single department that you have, you can put the people in there.
Or the person or the task that they're doing. So like say it's a VA or say it's a, a marketing person or something like that. It's the, the position, the position that they want. Um, so then you do that and you basically put their salary for the year plus if you're giving any benefits if you're doing increases, all those kind of things.
So it really helps you to plan out like, can I afford a person? Uh, because then you're gonna put all the rest of your expenses in the budget. And then you're gonna input the salary cuz the salary for most small business owners is the biggest piece. Um, the biggest expense is, is people. So then what you're gonna do is you're gonna plug-in from the salary budget, into the salary line and the actual budget forecast.
Um, but then you put on in all the other things. And so if you're doing the mid-road sales forecast, you can put 'em all in. So put in the wheels, fall off forecast and see if that works with your budget. If you don't have enough money at the net income at the bottom line, You can't afford those things. If the wheels fall off.
Good to know. So then is that realistic though? Is your revenue gonna be at the wheels fall off? Probably not. So let's use the mid-tier revenue forecast. So then you put that in. Does that work for your budget at the net bottom of your budget? Do you use to have money left in the bank? [laugh] kind of thing. Like, are you making money?
And so most times yes or it's yes ***, and so some months it's good. Some months it's not. So then it's like, okay, where can we trim from the budget to make it in alignment for the forecasting? So that's kind of a lot of people like that one, um, that one it's harder to do on your own for sure. But I still can do the salary spreadsheet cuz it, that one just helps you to know if you can afford people next year.
You know what I mean? If you can afford increase, cuz there's so many people who are like, well, how do I know? And there's a lot of different methodologies, but I like to spreadsheet it. I, I just like to see, like, what is the all-in cost? Because a lot of people don't factor in the employer tax the benefits and all of the things that you have to pay on top of having an employee.
It's a lot of risk management. It sounds like, mm-hmm. Yeah. And when I think of the coaching world, I think of too, a lot of people are very inconsistent income because they function off of their launch income. Right. Mm-hmm. And so they have like, let's say two launches a year, and each launch brings in anywhere, you know, between like 20,000 to 200,000 or something, they might only get that influx twice a year.
Right. And so you don't really know. And, and for launches, it's, you know, you can go with a methodology of like, what were your last three launches like, you know what I mean? Mm-hmm, so if, say one launch was a hundred, say one launch was 20 and the other one was 50. You know what I mean? I would average. I would average the between the last three launches.
So that then I could say, well, on average I made about that, or you could just, you could go wheels fall off and say, well, I made the minimum I made was twenty, [laughs] you know what I mean, so that's just the strategy that you used. It's your risk level, but the budget, so the profit loss, the balance sheet, a budget to verse to actuals.
That's a, a one that people really do like, and then also like I do write a report, my couple of coaches to where they can see a report of the product. So like by the actual product, because sometimes you in the income bracket that you have, there's like four or five different products. So that's a report that some people like to do.
Um, just so that they can see. Even more in-depth, but it's just automatically pulled from QuickBooks, you know, I just run a, a customized report that way. So it really depends on what you wanna see and what your metrics are of the extra reports. But I mean, gosh, you can do so many. You can do like a profit and loss year to date by month, by quarter, you know, and the biggest piece that the report are helping you to do is have historical data.
Mm, mm-hmm, historical data is so important because then you can start to see the trends and you can start to make decisions based on what's happened in the past couple years. Now, you know, we just went through a pandemic. It was super unusual. So maybe the 2020, like year doesn't make sense to use, and maybe it changed your business so much that you also have to start tracking, you know, from 2022 almost, you know what I mean?
Like it's a little bit of an anomaly, but it's just, you know, all of the numbers that you have and the longer that you're more consistent with, you know, reconciling your books and closing them on a monthly basis and not doing any changes, you know, in past months. Um, that's a huge one because then if you do run report.
And then you change something. Then when you go back to look at the historical report and it's changed, you're like, well, how did it change? That's another really critical, um, piece about doing your bookkeeping is do your best to close your books, you know, on a monthly basis, quarterly at maximum. So that then your numbers don't change.
Cuz then it's a moving target and it's really hard to have historical data, that makes sense. Mm-hmm, yeah. Okay. That makes complete sense. Yeah. Cool. I think that's really good. And I like what you're saying about the historical aspect that you can see how things change over time. Mm-hmm, or you can see which months, you know, are stronger for you.
Yes. And, you know, adjust your strategy according to what the actual data is telling you. Right. Which is great, we wanna use both our intuition and data when making decisions in our business. Exactly and that's piece that I feel like it's interesting when you know, I'm doing books for somebody and like, I know that I'm sending their reports or I'm putting it into their Google drive, which that's how I communicate with my, or, or keep historical data.
But, I know that they're not reading them. [laughs] So I'm like, you know, it's just always very interesting when you have the people who are not looking at their data, because it is, oh my gosh. Like it's such a treasure trove of like, what happened, and like I nerd out on it. And, um, that's really one of the reasons why I, I named my company *** country, because I love crunching those kinds of numbers. Yeah. That's like my JAM.
So, are there any final thoughts that you think are really important for entrepreneurs to know as they're tracking their financials? Yeah. I'm just gonna kind of go over the key points of what I said because there were some really big, important things that if you don't do anything that you should do those things, first thing is, do not co-mingle.
Just separate, separate, separate business and personal reconcile your books at the end of the month, I know a lot of people send their financials to a CPA, um, to do their tax returns, but they haven't reconciled their bank account, credit card accounts. And those kinds of things. That's where like a lot of stuff, like I just did something with somebody who found $20,000 of expenses that was overestimated.
So they over or underpaid taxes because the expenses were $20,000 more. It's really important that you do the cleanup of the books too. And the recon, bank reconciliation is one of the key areas that finds all the junk. That's kind of hanging out there. [laugh] the reconciliation leftovers that I say is what I call them.
Um, so that's really important is to, if you are not doing it, have your bookkeeper or somebody doing that piece of it for you. It's so extremely important. And then look at your reports. You know what I mean? I've done all of the work to get your bookkeeping up to date, look at the stinking reports. Okay. Because they are the things that's the whole point compliance is great.
The IRS wants you to do it, but the best part for your business is the actual data that you're pulling from it. But so, yeah, I, I think those are the main points. The other thing that I want to mention, cuz I, I just, it's something that is very common is getting into the tax time stress cycle.
So I did wanna mention that, that is when you do all of your bookkeeping and for a year so that you can do your tax returns and that is stressful to not only yourself, but it's stressful to your CPA because you know, you're generally going to the very last minute there, but the biggest piece. That is non beneficial for the business owner is that you lose a whole year of information and data, right?
So you, yes, you get your books done in a year, but the best part about doing your books on a consistent rhythm and a consistent basis is that you get to see like as soon as the month is, is done, what happened. And if you're waiting for the whole year, a lot could have happened. I mean, you know, one of the business, biggest reasons why small businesses go under is cash flow.
So if you know that you're losing money fast, you can do something about it because you're looking at your financial reports, but if you're just winging it and you're like, well, I have money in the account and doing account based. Like checkbook accounting basically. And like, if you have money, you're good.
If you don't, then you're not, that's not going to grow your business. It's not gonna be helpful for you. But a lot of people do get into that cycle. If you're in that cycle, again, this is a shame-free zone. Like I cannot reiterate that more. You're not alone, but let's make that a goal for you to get out of that cycle because it will benefit your business tremendously.
Mm-hmm... mm-hmm... I agree, especially because I know for myself, I tend to want to get that little extra discount instead of doing the monthly subscription, I do annual subscriptions. And so then when those annual subscriptions hit, you know, it's always like a comfort to know, like I've prepared for that, totally fine.
And, and actually like, I'm grateful. I can have like grateful feelings towards those subscriptions because they feel good knowing that they're providing a service to my business. I like them. And I have prepared for them. Right. Exactly. Exactly. Yeah.
So if people wanted to work with you, what are different ways that you provide that? Yeah, so I have three different ways, so I have three different avenues for the true DIY. So those are the people who are they work best by like going, you know, like Videos on YouTube and all of those kinds of things. So I have services for that. And then I have done with you services where, you know, I'm actually hopping in the file with you and we do it together.
And that most of those kinds of things are in group settings, but there are potentially like a couple one on ones or small, very small group where we're doing, uh, it together. But I do have done with you services and then I have done four you services. So I try to have a level of service for each one of those types of small business owners who are, you know, in the process of doing their own books to outsourcing and it's all on my website. So, and I try to make it really easy so that it's like, okay, DIYer, go click here. And you get those services done with you, click there and go to those, you know? So I try to really break it up that way because I just know that that's where it is.
Like after years, you know, since, since I've known you, I've been really kind of researching, like, what do people need and what manner do they need it and how do they best like it? You know what I mean? So that's, that's kind of where I. Mm-hmm. Yeah. And I can attest, I took Courtney's course when it was in beta mode. [laughs]
So way back when and it was awesome back then. So I can't even imagine how awesome it is today. So you could have so many great options working with her, whether you're DIY done with you or done for you, which is typically my mastermind clients. I'll just immediately go for the done for you. And like she said, it's a shame-free zone and she gets.
You know, in ship shape. So exactly. Yeah, [laughs] it's been so much fun catching up with you. Thank you for having. Getting your wisdom. [laughs] So thank you so much. Yeah. Thank you so much.
I hope you enjoyed that time with Courtney as much as I did. And one of the things we were talking about after we stopped recording was that... small businesses really are the bread and butter of our economy and Courtney and I both see that so clearly. And both of us with our businesses want to support small businesses so much. We really desire to see women and all businesses grow so that the owner can be financially independent and bring their goodness into the world and her heart is so there, I hope you really felt that in this show today.
So thank you so much for listening and I want to be sure and mention this. I have a retreat coming up this November and it's the women's entrepreneur mastermind retreat. It's going to be luxurious. You're going to be guided into analyzing different parts of your business and your mindset.
We really are gonna be focusing on busting through some limited. Beliefs that, that we have, and we're going to have fun and play and rest and all of the things. So this is a real boost for your business, and I hope you join us. You can go to my website and find the information there at the very top of the website.
There's a little bar that you can click to get the mastermind retreat information. Or anywhere you are listening to this, whether it's in the show notes or down below, if you're watching on YouTube. So I hope you join us and I will see you next time.
And if you are looking for more support, challenge, and inspiration in running your online business, I would love to have you apply to my mastermind.
Check it out! @jenargue.com
