5-Step Roadmap to a Profitable Year
You’re determined to live your best financial life! You’re going to have your bookkeeping up to date every month, stay on top of your numbers, and finally start paying yourself. This year is going to be your best financial year yet, you just have to figure out HOW to make that happen. That’s where money habits come in. There are five core money habits that every small business owner should adopt. If you keep up with these steps, you’ll have a roadmap to a profitable year.
Do Your Bookkeeping Weekly. Doing your bookkeeping weekly means logging and categorizing all your financial transactions in your business. It is the most important money habit you can adopt! The time it takes to do this each week will vary depending on how many transactions you have among other things, but on average, it’ll take about 30 – 60 minutes. But staying on top of it week-by-week will help it go faster and has a HUGE impact.
Review your numbers monthly. This money habit is all about running a Profit and Loss report (also called the Income Statement) every month. Compare the previous month’s report to the current month’s report. When you do the comparison, you start to think critically about your business finances.
Save for your taxes monthly. Saving for taxes means putting a percentage of your profits aside for taxes. You do this so that you have money available to cover your estimated tax payments. To save for your taxes, transfer 30% of your monthly net income (not your gross income!) to a tax savings account every month.
Pay yourself every month. Instead of pulling money out of your business whenever you need it, pay yourself a set amount once or twice per month. You should do this every single month, which is why it’s a money habit!
Clean up your spending every year. Just like material clutter, we can have financial clutter! Decluttering your spending is really important. At the end of every year, you should perform an in-depth spending audit. If you don’t make a conscious effort to carefully go through your transactions, you’ll keep wasting money for another year.
Following this 5-step roadmap can help you get on the path to healthy money habits for your business so you can wave goodbye to bookkeeping overwhelm. If you’d like to learn more about utilizing my services to assist you in keeping your records organized, schedule a consultation with me today!