For business owners, this is an all-too-common scenario: A seemingly successful coach (or service provider) is hard at work growing their business. They are working lots of hours, and their billable hourly rate is respectable. But their cash flow is dismal! Why? Well, they are working so hard that finding the time to actually take control of her money is impossible! But never forget, money matters!
When this happens, invoices do not get sent on time. Past due balances are ignored. Taxes are incomplete (which causes an even bigger financial problem). And maybe worst of all, they have dozens of monthly recurring auto-draft payments, for unknown or unused items/services.
Does this sound familiar? Sadly, that is exactly what a lot of “successful” businesses look like. When you work at home, and you are accountable to no one but yourself, it is 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 not only possible but easy! The only requirement is setting up some trusted systems (once!!).
Money Matters – Billing
Choose and Use a System
The first step to systemizing your financials is billing. Sign up for and use (we cannot stress this enough) a system such as Freshbooks or Harvest. These systems will automate your timekeeping and produce an invoice with a single click of a button!
Pro tip: Using the system is key! Just like paying for a gym membership, you will only get results if you USE it!
Schedule a Billing Day on Your Calendar
Once a week (or even 15 minutes a day, especially when creating a habit), schedule an unbreakable appointment on your calendar to focus on billing.
As long as you are actually using the billing system, when it is time to sit down for your “billing day” appointment, all you will need to do is 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.
Money Matters – Expenses
Use one system for all of your expenses such as PayPal, a dedicated credit card or even your business checking account. Just make sure it has a reporting feature that will allow you to send monthly statements to your accountant.
Then, at the end of every month, bundle up your expense report, sales report, and your receipts, and send it off to your accountant. 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.
Pro Tip: Dedicating a single system to pay all of your expenses makes it extremely easy to track! This also cuts down on the amount of time necessary for an accountant to sift through it which ultimately saves YOU more money!
If you do your own taxes, 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.”
Regardless of what system you use, make sure you are up to date on your taxes! If you are not, prioritize your taxes and get a payment plan in place (if necessary). This will not only help save time but also money as the IRS will charge late fees.
By simply putting these two systems in place and dedicating time for your taxes, you can easily save yourself 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!