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Do you ever struggle with staying on top of all your financials such as balancing your budget, paying your taxes, paying your bills, and paying employees? Today’s video shares 3 methods to make this task easier and more efficient!
To learn more please either watch the video above, read the transcript or listen to the podcast below.
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Read the Video Transcript by Clicking Here...
Do you ever struggle with balancing your budget, paying your taxes, paying your bills, paying employees, and just staying on top of all of this stuff. I got a great question from a user that asked, “How can I stay on top of all of this (financials)?”
How do you stay on top of your financials?
First: budget. I’m not going to get too far into it but if you’re not familiar with the software that I created called clickBACON (https://clickbacon.com/), go check it out. BACON is a budget tool that will help you create a budget and help you stay on top of your budget so you never miss your food cost, labor cost, or budget again. Great information on that site about what it is. Yes, I’m recommending it because I created it. But the reason I created it is because it works and you guys need it. So first thing is to check out BACON.
Second: paying taxes and all the other stuff. I suggest that you have three bank accounts in your business – one bank account is your operations account, one is your tax account, and last is your profits account. At some point every week, usually on a Monday or Tuesday, I suggest that you take 10% of your sales and transfer to the tax account. Take another up to 10% of your sales and transfer it to your profits account. Now that only leaves 80% of last week’s sales. 10% should be saved right away for taxes. It’s already gone; you owe that money. Maybe taxes are actually 8.75%, 9.25% or whatever, but if you allocate 10% you can always reimburse yourself at the end of the year.
The reason I set aside 10% for profits is because you should make money in this business! If you only have 80% of the money left in your bank account, you’re going to be a little more careful about what you buy and how you operate your business. Some of you who maybe aren’t profitable right now won’t be able to do the 10% for profits, then do 1%. If you have $10,000 in sales last week, transfer $100-$300 or whatever you can do, but never go backwards. If you want to start at 1% and do that for two months, then in two months go to 1.5% or 2% – that’s fine. Never stop doing this and never go backwards.
Third: staying on top of bills. First of all, you really should be using an accounting program like QuickBooks, Xero, FreshBooks, etc. While BACON is phenomenal, it’s not an accounting program. You should be using an accounting program or your bookkeeper should be doing this. If your bookkeeper does this, they probably have their own system.
The reason I’m getting this question is some of you might not have bookkeepers. Additionally, bookkeeping shouldn’t be a daily process. If you try to do it daily it’s going to overwhelm you. I believe you should log into your QuickBooks account in general twice a week, usually on a Monday and a Thursday. Monday is the day that you can transfer your money, log into your QuickBooks account and then again Thursday. What you do for the two times you log in is on Monday you’re going to enter in all of your sales, purchases, bills that need to be paid and all your credit card receipts. All that needs to get entered into QuickBooks especially the bills.
On Monday you’re gonna go back to any bills that are on your desk, then let’s say an invoice comes in on Thursday or Friday. You put it into an envelope, it sits on your desk, then Monday you enter it into QuickBooks with the date that your received it and the due date on it. That’s called an account payable, that’s money that you owe someone else. Same thing on Thursday, anything that came in after you did your QuickBooks on Monday-Thursday morning gets entered on Thursday afternoons.
Here’s the difference, Thursday is also your bill-pay day. After you enter everything into QuickBooks, you can run a report that’ll show you what bills are coming up based on the due date then you can select which ones you want to pay. Just put a checkmark next to it and you print out the check, this way you can control and stay on top of everything.
Maybe there’s a bill that really is due but you’re gonna wait another week or maybe there’s one that you just want to pay and get it over with, you’re in control.
However, if someone calls you on a Wednesday and reminds you’re a little late on this certain bill just say, “It’s in my it’s in QuickBooks, and pay bills on Thursday and mail all checks on Friday. Yours will go out this week.” If someone calls you on Friday afternoon and says they really need to get paid now, tell them, “I have you in QuickBooks, I didn’t get to your bill this week since I have some other bills in front of you. You’ll be in the next check run.”
Another important thing, don’t print checks in the middle of the week! For two reasons: 1) I want you to create that rhythm, that timing, with your vendors where you print checks and sign them on Thursday and then you mail them on Friday. 2) I also don’t want you constantly going in because every time you do that you’re wasting time. Go into QuickBooks twice a week, Mondays you enter bills and Thursdays you enter bills and pay them. This is a system that I use in my current business and with other restaurants. It’s a system that I’ve taught many others – very simple, straightforward and it works.
We covered a lot and I hope you take at least one piece of the advice here.
Your Next Step
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