In our latest Profit Club newsletters, we explored the impact of positivity on both customers and employees. Join today to stay updated with the latest insights and information.

 

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Need help with the numbers part? We help our clients stay profitable through a variety of tools, including how to properly price your products and services. Book a no obligation call today to learn how we can help. 

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The end of the year is a busy time. Prepping for the holidays, making time for family, and planning our workload in hopes of a few days off over the holidays. 

As a small business owner, your list is even longer with financial statements, taxes, employee incentives, budgeting, and prepping for 2024. 

To help you with this process, we’ve created an accounting checklist highlighting some key areas to focus on as you wrap up the year. 

Year End Accounting Checklist

Review and Organize Receipts

Failure to stay on top of your receipts will lead to errors in your accounting records, stress you out at tax time, and may lead to overpaying taxes if you miss expenses. 

Tracking your receipts is easiest if you have a system in place to record and file them as you go. If you don’t have a system in place, use this time to set one up. Some tips:

• Organize by type of expense
• Organize your receipts using folders, tags, or even envelopes
• Record receipts at the time purchases are made
• Back up receipts digitally by scanning them or taking pictures

Pro Tip: Use a service like Hubdoc to easily capture and manage expenses and feed them directly into your accounting system. Read more about how to set thus up in our post, Streamline Your Business. 

Run Top 3 Financial Statements: Income Statement, Balance Sheet, & Cash Flow Statement

The “big three” financial statements are the best way to see, at a glance, where your business stands financially.

If your profits are lower than expected, you should make some changes as you head into the new year. If your profits are higher than expected, it might be a good time to make larger purchases for which you can record future depreciation.

Speak with a professional before making big purchases to ensure you have the cash on hand, and to understand depreciation rules. 

Analyze cash flow statements

It’s a good idea to review your cash flow statements quarterly. Here are some things to look at for expenses: 

• Review by category, for example, advertising
• Look for areas where you spent a lot of money
• Was it worth it?
• Did my advertising work? Did I go out to eat too much?.. Or have too many coffees?.. mmm coffee

Pro Tip: It’s easy to lose track of unused subscriptions, especially if you’ve set them up via auto-pay. Small recurring costs can add up quickly. Auditing these regularly will cut costs and keep your organization lean.

Reconcile accounts receivable

Run a report of unpaid invoices and make a plan to collect. Reconciling your AR will boost your cash flow and allow you to start the new year without outstanding invoices (and with cash in the bank).

Double-check payroll and benefits

Identify any issues or corrections to your payroll before the year’s end. Ensure easily forgotten benefits, such as educational reimbursement, health and life insurance, and company car, are accounted for.

Verify vendor & customer information

A lot can change in a year. December is a good time to verify your customers’ and vendors’ information. Check that phone numbers, email addresses, and contact names are accurate and up-to-date.

If time permits, evaluate your vendor relationship and look for opportunities to negotiate better deals in 2023. 

Take some time to do this now so you can be present and relaxed over the holidays, and give your business a running start in January.

Join our Profit Club newsletter to get more helpful tips and info on building a profitable business.

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The post Year End Prep Checklist first appeared on The Rayne Firm.

The post Streamline Your Business first appeared on The Rayne Firm.

“86.8% of all Canadian startups make it to year 2” [source]

How many times have we heard something like that? I’d like to see a statistic on how many hours of sleep new business owners lose.

These kinds of things can be disheartening, but I’m here to tell you that most of the causes behind these business failures are avoidable.

This article in the Globe & Mail lists 8 reasons your new business might be failing. More than half of those reasons could be mitigated through better financial management.

Most new business owners are great technicians, meaning they are good at what they do–landscaping, baking, welding–but they don’t have experience running a business.

The business owners that succeed understand their strengths and weaknesses and get help to fill in the gaps.

We all need to bootstrap to some degree in the beginning, but knowing when it’s time to get help is a key differentiator between those that succeed and those that fail. 

Here are 4 ways the right financial partner can help you get and stay profitable:

1. Financial data

If you have your books in order and up-to-date, you have the financial data you need to make better business decisions. You can evaluate, forecast, and plan in a way that is impossible when you don’t know your numbers.

2. Cost management

It’s easy for costs to get out of control. Staying on top of your expenses, whether that’s procurement, inventory management, or accounts payable, this is a critical part of your overall cash flow management.

3. Cash flow

Speaking of cash flow…this is probably the most critical and least understood aspect of good financial management.

Your bank account balance is not an accurate reflection of your cash flow.

If your books are up-to-date, you will know your true cash flow position and adjust your actions accordingly. If you don’t manage your cash flow well, the results can be terminal for your business. Everything from negative impacts to your credit rating to losing staff because you can’t pay them on time.

4. Receivables

It’s amazing how quickly you will forget to issue an invoice or collect on an invoice if you run everything out of a shoe box in your truck.

Make sure your receivables are accurate: know who owes you money and have a system for follow-up and collection.

Is it time to get help from a financial professional?

It’s definitely something to think about. The right financial partner will help you go from a reactive, “oh sh$t!” business owner to a confident, proactive CEO.

Need help finding ways to make your money go further? Our Small Business Bookkeeping Audit is for you.

We take a deep dive into your figures to identify how you can tighten your business belt and boost your profitability.

Although this blog offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. The Rayne Firm assumes no responsibility for errors or omissions in the content.

The post Is it Time to Let Go of Your Bootstraps and Get Some Help? first appeared on The Rayne Firm.

Is there no money in the bank at the end of the year? (even though your financial statements say there should be)

Do you have unpredictable and fluctuating margins?

If you’ve answered YES to one or more of these questions, your small business may be headed for some “Bad Weather.”

Recession, economic downturn, a dishonest partnership, or industry shakeout are just some of the events that can put your business to the test. 

After the pandemic lockdown, my business and many of my clients’ businesses ground to a halt. 

And we weren’t prepared for it.

I decided then and there that I wasn’t going to be caught in this situation again. I began looking for solutions to build more resiliency and profit into our businesses. 

That’s when I discovered the Profit First system. 

It’s brilliant in its simplicity, and effective because it works with human psychology rather than against it. It sets you up for success by helping you to master financial discipline and structures your business to run efficiently. 

No matter how new or established your business is, you should not wait for the “Bad Weather” to implement Profit First. You can’t anticipate every hurdle your small business will encounter, but you can be prepared.

What is the key to being consistently profitable?

Profit First is a simple yet very effective approach to finances that works with human psychology to create profitable, sustainable businesses. 

THE PROFIT FIRST FORMULA

The GAAP (Generally Accepted Accounting Principles) formula for determining a business’s profit is 

Sales – Expenses = Profit. 

It is simple, logical and straightforward. 

The problem is it doesn’t account for human behaviour. In the GAAP formula, profit is a leftover, an afterthought, something that is hopefully a pleasant surprise at the end of the year. 

But profit is not a guarantee. We need to be intentional about profit if we want to get out of survival mode. 

One way to do this is with the Profit First method.

With Profit First, you flip the formula to 

Sales – Profit = Expenses.

Logically the math is the same, but from the perspective of the entrepreneur’s behaviour, it is radically different. With Profit First, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses.

It’s a simple shift in perspective that leads to powerful results.

DON’T CHANGE HABITS; LEVERAGE THEM

Through pure willpower, many small business entrepreneurs try to force themselves to improve their bookkeeping skills and become more disciplined in their fiscal management. 

But often the moment you face financial stress or bigger than expected expenses, you break your own money rules and start spending what you had saved.

The Profit First principle does not try to change your habits, it works with your existing habits. 

For example, you may be like many business owners who check their bank balance (rather than their cash flow statement) to see if they have enough money to spend on a conference, a new work truck, or hire a new team member. 

Profit First doesn’t ask you to change that habit. Instead, your incoming cash is allocated to different accounts, removing the temptation to “borrow” from yourself. 

This means you will always have enough money to pay suppliers, staff, and taxes. You will always have money set aside as profit. Your business will become fiscally strong, and you will benefit from regular profit distributions.

The Psychology: Parkinson’s Law

When profit comes at the end of the equation, we are making do with what’s left over. There’s a little theory called Parkinson’s Law which tells us that work continually expands to fill however much time we have available to complete it.

If there are 6 months available to complete a project, we will spend 6 months working on it. Give us only 1 month, however, and we’ll get exactly the same amount of work done in ⅙ of the time.

Sometimes, taking less time improves the results–we are more focused and motivated. With a finite amount of time to complete the project, we defy our expectations and get the work done. We achieve the seemingly impossible.

Profits and expenses work under the same principle. When profit is at the end of the equation, all the money we have coming in is up for grabs. 

Now replace “time” with “money” in Parkinson’s law. If we have X amount of money available, our expenses will increase, gobbling up all that money.

If we have less money available to spend, we will find a way to do the same thing for less.

The problem with viewing profit last (the GAAP formula) is that your expenses are free to expand and consume that space – money!

When the amount of money available for expenses is reduced and finite (the Profit First formula). We get the job done with the funds available.

And it’s not a magic trick. It will not come at the expense of the quality of our services or the products we produce. Instead, it forces us to stick to what is actually available – this much money, no more. We hustle a little harder, think a little deeper, and come up with innovative and creative ways to do things or create new methods that don’t require as much capital to spend on expenses.

We surprise ourselves.

We can help you SURPRISE yourself and steer you away from the “Bad Weather.” 

Just like going to the gym and trying to lose weight, we all know what to do and how to do it, but personal trainers oversee the best workouts. As a Profit First Professional, Bookminders Services is your financial trainer. 

Are you ready to get your Profit First Blueprint? Get a lightning-quick analysis of your company’s profit so you can instantly destroy debt and begin amassing capital. Painlessly go from ZERO to 20% profit allocation in your business and break free from the survival trap and begin to accumulate wealth.

Although this article offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. Bookminders Services Inc. assumes no responsibility for errors or omissions in the content.

The post Is your Small Business Prepared for “Bad Weather”? first appeared on The Rayne Firm.

Eight types of cyber attack

There are a number of different technical methods deployed by cybercriminals to gain access or disable the operations of businesses and individuals alike. There are always new methods proliferating, and some categories overlap, but these are terms that you’re most likely to hear.

1. Malware
2. Phishing
3. Ransomware
4. Denial of service
5. Man in the middle
6. Cryptojacking
7. SQL injection
8. Zero-day exploits

Here are ten ways to help keep your business safe from online threats

whether at an office or working from home.

1. Have a cybersecurity strategy. Have a plan in case your business is hacked. Update or install antivirus and monitoring software and test your existing capabilities to deter an attack.
2. Understand the risks. Educate yourself (and your employees) about the risks like email scams, phishing attacks, and viruses. Don’t open emails or click on links that look suspicious, download and install malware. Create strong passwords and change them every few months.
3. Don’t share personal info online. Guard your personal and financial information, and don’t share it online.
4. Be social savvy. When using social media networks, be cautious about the information you share.
5. Lockdown your Wi-Fi network. Ensure your Wi-Fi network in the office or at home is password-protected.
6. Protect your computers. Lock your screen when you’re away from your desk. If you’re travelling with a laptop or mobile device you use for work, keep it secure and always be mindful of where it is.
7. Scrutinize your business partners. Consider your supply chain or partners with which you regularly conduct business. Are their security protocols up to date? What security measures do they use to protect their companies and partners?
8. Back up your mission-critical data. Automate and regularly backup and encrypt all essential business information to store at a secure off-site location or in the cloud.
9. Use a Virtual Private Network (VPN). A VPN is affordable for small businesses and required if your employees work remotely. VPNs establish secure network connections by encrypting your online traffic and disguising your identity by hiding your IP address. VPNs prevent people outside your secure network from seeing which websites and data you access online. 
10. Think about getting cyber liability insurance. Even if your business has stringent cybersecurity software and policies, there is no guarantee that you won’t get hacked or suffer a data breach. Restoring systems takes time and money, and you could be exposed to a lawsuit from third parties. Getting cyber protection may cover your business’s legal costs and damages.

DID YOU KNOW?

Canadians lost over $230 million to online fraud during 2021!

The Canadian Anti-Fraud Centre (CAFC) estimated that Canadians lost a total of CAD $230million to fraud in 2021. Over CAD $100 million of this sum was associated with online fraud. 

A KPMG spokesperson said in a news release that:

“The reliance on digital platforms and cloud computing has put more sensitive data within the reach of cybercriminals, who are becoming increasingly more adept at accessing or hacking into ‘secure’ customer databases to steal identities.”

According to the results of an 2021 online survey by the Insurance Bureau of Canada (IBC), 47% of small business owners admit they don’t allocate any portion of their annual operating budgets to implementing cybersecurity defences. [source]

October is Cyber Awareness Month. 

The Government of Canada offers free resources to raise awareness about cyber security and help fight phishing.

https://www.canada.ca/en/communications-security/news/2022/09/cyber-security-awareness-month-2022.html

Get Cyber Safe is a national public awareness campaign created to inform Canadians about cyber security and the simple steps they can take to protect themselves online.

https://getcybersafe.gc.ca/en

At Bookminders Services we take your data security seriously.

QuickBooks Online (QBO) is a cloud accounting software that we love and use for most of our clients. Read here about how QBO protects your online info, automatically backs up your data.

https://theraynefirm.ca/blog/why-we-love-quickbooks-online/

Although this blog offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. Bookminders Services Inc. assumes no responsibility for errors or omissions in the content.

The post Cyber-attacks on Canadian small businesses are on the rise. first appeared on The Rayne Firm.

If you’re a small business owner, chances are you’re dealing with your bookkeeping on your own. After all, you went into business for yourself. While many entrepreneurs enjoy the freedom and perks of owning their business, it also means that expenses are kept to a minimum for success. Hiring a bookkeeper is a decision many small business owners struggle with. That’s why we’ve compiled the top three reasons why hiring a bookkeeper may be the best decision you’ll make for your business in 2023!

Profit Margins

Owning a small business means keeping your profit margins at a minimum. A professional bookkeeper can keep track of these margins and offer guidance on controlling operating expenses for a better return on investment. A bookkeeper can also manage your monthly transactions, payroll, and government fees and ensure that bills are paid promptly and accordingly. A bookkeeper pays for themselves by freeing up your valuable time,  finding cost savings, avoiding penalties for late filings, and following up on accounts receivable, so you get paid on time.

The Ups and Downs of Tax Season

Bookkeeping and tax planning only become more complicated in the first few years of owning a business. A bookkeeper can alleviate the stress of taxes, especially during tax season! (which is coming up very soon). Employing a bookkeeper, even on a temporary basis, to accurately report your expenses and budgets may be the way to go.

Stress and more Stress

No one likes stress. The first few years of running your business require many long hours and dedication. In fact, the first few years are the most difficult as you scramble to make ends meet and become profitable. Chances are you are managing all the different areas, such as sales, marketing and bookkeeping. Let’s be honest, not all of us are good with numbers! Juggling multiple tasks at once can translate into neglecting other crucial parts of the business. A bookkeeper can help with administration and free you up to concentrate on growing your business.

Doesn’t that sound great?

While employing a bookkeeper may be a tough decision for a small business owner, the decision may be worth it in the long run. Think BIG, as it could save money and time and reduce stress.

At Bookminders, we use the Pure Bookkeeping system so that everyone on our highly skilled team follows the same processes, uses the same reports, and records information the same way.

And

We Lead With Profit!

Our firm has received an Advanced Level Certification in Profit First. One of the few selected globally!

What does this mean for you and your small business?

Pure Bookkeeping is a proven, widely-used system that guarantees compliance, consistency, and quality in your business finances. Paired with the Profit First method that we bring to all of our clients, working with us will help you build the financial foundation you need for a profitable and sustainable business.

Find out more, schedule a Free Consultation here.

Although this article offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. Bookminders Services Inc. assumes no responsibility for errors or omissions in the content.

The post Does your small business need a bookkeeper? first appeared on The Rayne Firm.

No doubt, your passion as a small business owner, 24/7 work requirements (that may sometimes border on obsession), and home life can be challenging to balance.

Growing a company takes great motivation, perseverance and commitment to move forward, overcome setbacks and reach success. Entrepreneurs thrive on hustle culture — it’s what keeps them going when times are tough.

Wikipedia puts it best: “Work–life balance is a concept including proper prioritizing between ‘work’ (career and ambition) and ‘lifestyle’ (health, pleasure, leisure, family and spiritual development/meditation).”

THE Work-Life balance myth

• Implies that there is a difference between Work and Life, which, for entrepreneurs, is rarely true.
• Only measures output. (Which is exhausting).
• Implies that your energy, like a pie, can be divided.

Let’s face it: The phrase “Work-Life balance” loses all meaning once you become an entrepreneur. However, there are ways to manage your time and energy to optimize not only your health but the health of your business!

To find a balance, you may need to implement some simple practices! Understanding Do’s are always easier to follow than Don’ts!

Do

• Define your Top Five priorities (Everything else is fun but not necessary.) Make a list, sleep on it, narrow it down and review the top 5! And YES, Work can be an essential and meaningful priority in your top 5….just not all 5!
• Become more mobile – Technology allows the ability to integrate Work and Life more than ever. Cloud-based services such as Google Drive, Dropbox, or QuickBooks Online will enable you to access and work on your documents and financials anytime, anywhere. From office documents to the family calendar, your list of to-dos can fit in the device that you slip into your pocket. When you become more mobile, you become more agile.
• Take Advantage of ‘Away’ and ‘Snooze’ in your app and on your devices, and take official “break times” during the day to allow yourself time to decompress and recharge during your workday.
• Delegate, delegate, delegate and EMPOWER staff members or professionals with tasks!

Remember YOUR Physical and Mental Well-being.

1. Meal delivery services can help with healthier eating.
2. You may not think of going to the gym as an investment in your business; reducing your stress is a wise investment of time, energy, and funds. 
3. Listen to audiobooks to ease tension and maximize your commute times.
4. Tomorrow is a new day. Feeling like there aren’t enough hours in the day, think about how much more productive you’ll be tomorrow with a good night’s sleep tonight. Get some shut-eye instead of burning that midnight oil.

Hiring a bookkeeper will give you more time to focus on your Work-Life balance!

Often Small business owners have the mentality that they need to have their hand in every task because otherwise, the job won’t get done right.

Don’t take your own time for granted – every minute you spend on a task has a dollar equivalent. Compare your “salary” as your company’s bookkeeper against the price of a professional bookkeeper. Once you treat the time you spend bookkeeping as an actual expense in cash, you’ll have a better idea of whether you should keep doing it. 

Accept that finding ‘truly perfect’ Work-Life balance for you may require some work!

Start small. Build from there!

Join our Profit Club newsletter to get more helpful tips and info on building a profitable business that thrives in all weather conditions. https://profitclub.ck.page/

Although this blog offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. Bookminders Services Inc. assumes no responsibility for errors or omissions in the content.

The post Work Life Balance first appeared on The Rayne Firm.

We hope you found this valuable!

Book your Profit First Blueprint today to improve profitability and proactively start planning your exit strategy. 

The post Do You Have an Exit Strategy? first appeared on The Rayne Firm.