Struggling to keep your business finances organized? In this episode, Kirsten Graham and Jeanne Willson share essential insights on bookkeeping for small business owners to help you save money, avoid mistakes, and grow your business with confidence.

Discover practical bookkeeping tips for entrepreneurs, learn to avoid common bookkeeping mistakes, and identify missing write-offs in your small business to lower your tax liability. We also cover managing subscription creep in business, adopting a CFO mindset for entrepreneurs, and effectively organizing your business finances.

Whether you’re thinking about outsourcing your bookkeeping or hiring a bookkeeping virtual assistant, this episode provides the strategies you need to maintain financial clarity and scale your business successfully.

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Welcome to the six Figure Business Mastery Podcast, where every week Kirsten and

Jeanie dive into the essential topics to fuel your business growth, from

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Welcome everyone to our newest episode.

I'm thrilled that it's Kirsten and I presenting just today, and we're

excited to talk about bookkeeping.

Which is one of the first things that I outsource in my business,

and I'm so grateful for it.

But before we say, we're just talking about bookkeeping, we're talking

about how to help you build a kick ass very profitable business, and

to be the CFO in your business.

That's what bookkeeping does for you, right?

Bookkeeping sounds so boring, and I don't wanna do the bookkeeping, but

bookkeeping is magic because it gives you so much flippant information

to make decisions in your business.

Okay, so what is one of the things that people miss when they are.

Either doing their bookkeeping or not doing their bookkeeping.

Yeah, it's interesting because so many small businesses

totally miss write-offs, right?

There's things that they could write off which would lower their tax obligation,

but because of lack of organization, because of lack of bookkeeping, they

end up paying more taxes than they need to, and that's so challenging

because when you're building a business.

Every penny counts.

Whether you're going from zero to 50,000, 50,000 to two 50, or you're trying

to get over that million dollar mark.

Being smart and strategic about your money is incredibly important.

And missing write-offs and paying more taxes just doesn't make any sense.

Are there certain write-offs that a lot of people miss?

Some obvious ones maybe.

Yeah, I think there's some really simple ones that we see a lot of times, like

home offices or percentage of utilities, and I feel like partly because that's

not always tracked in your bookkeeping, but it's one of those things that

people think's not really gonna add up.

First of all, for those of you that have an LLC or you're incorporated, you

have bylaws that you have to abide by in order to have the legal protection

of that LLC or that incorporation.

And one of those things is not co-mingling funds.

So if you are co-mingling funds, you may not have the protection

that you're expecting to have with your LLC or your incorporation.

What happens is when people are commingling their funds, it's

an easy way to miss write-offs.

You're paying for things outta your personal account, and then

you forget to write them off.

A few months go by and you just totally forget about them.

Or at the end of the year, you're trying to pull all these

receipts together and sort it out.

Is that my personal number?

Is that my business account number?

And it's a mess.

So you can really miss all kinds of tax deductions.

When you're not organized and you're not planning where your money's going.

Yeah.

I love that.

That makes so much sense.

I remember you encouraging me to do that when I first started my business.

It was just a really nice definition of, this is personal

stuff, this is business stuff.

And then like you said, it, when you have to pull it all together, you're

not confused about which is which.

Yeah.

It's interesting because I was talking to one of our clients, she

started her business not long ago and she's not quite profitable yet.

She's probably spent a little bit more money than she needs to, which

we're working on with her bookkeeping, va. But she was doing just that.

She was spending her personal money, and I said, if you have to spend

your personal money, sometimes your business might need an influx of cash.

Lend your business the money, write a check to your business as a loan,

$500, a thousand dollars, $10,000, whatever that looks like, and then use

the money from your business account.

Then you can pay that money back as a loan rather than it looks like income.

And then you're paying taxes on it.

So that was one thing that, you know, if you're at that place where your business

is struggling a little bit month to month, or every now and then, and you're

just commingling because of that reason, it doesn't mean you can't ever use

personal income in your business, but you wanna invest it like a business owner.

You wanna think about your business as a separate entity and make a loan.

And then if I'm not mistaken, a lot of people don't take all the

mileage writeups that we have now.

A lot of us don't have as much mileage as we used to, but again, it's something

that people probably say it's not that important, but it's one of those things,

if I'm not mistaken, that does add up.

Yeah, mileage can definitely add up.

And the problem is people, they worry about getting audited, which they should.

And because they haven't really tracked their mileage, they're not

using a simple mileage app, they don't have a really good record of it.

So most accountants and will tell you to err on the side of caution

if you really can't documented it.

Don't just jump in and guess and have 10,000 miles this year.

So you really wanna make sure you're documenting your mileage

and it's, everything is so much easier now because of technology.

There really isn't any reason not to do that.

Yeah.

You don't have to have those little books anymore where you write down where you

started, where you ended, and then you gotta pull up Map Quest or something

to figure out how many miles it was.

Yeah.

So let's talk about another issue people sometimes have with

bookkeeping and actually what bookkeeping will alleviate, and that

is subscription creep they call it.

Yeah.

That's really funny.

'cause a lot, again, it goes back to our clients when they first

start working with their bookkeeping VAs, we hear it all the time.

I had no idea I was still paying for this.

Oh my gosh.

Or I was looking at all of these different subscriptions I have and

realized half of them I'm not even using.

So again, as a business owner, you get so busy, you're out trying to make money.

You're working with your clients, you're trying to make them happy.

You've got all kinds of things going on.

So it's very easy, and that's why subscriptions, memberships, and things

like that can be so profitable is because people often forget that they have them.

What we find most of the time is clients are often paying for multiple

softwares and they don't need to be.

So some examples of that is one of our clients, she's on our software from leads

to sales, our white labeled version of high level, and she was still paying for

a software that would do QR codes for that can be done right in the software.

Or you'll have someone who has something like.

They're still using Calendly even though it could be done in their software.

So as things are moving a lot faster with technology, a lot of times you

don't need all of these different softwares when everything can be in

one place and way more cost effective.

But yeah, all those little subscriptions can add up quickly.

And what about the ones that you sign up for a week free or two weeks free?

Do you know why they do that?

Because a lot of people forget and then they'll just carry on

and see build month after month.

Yeah, and it's so powerful because again, we get really busy and you

think, oh, it's $10 here, $20 there.

It's not gonna make or break me.

But the reality is when you start looking at your money each month and

you realize that there's just all these little tiny leaks in your bucket.

That money adds up quickly.

And so by sending those subscriptions and really knowing where your

money's going each month, it gives you the power to choose.

It's also, I know shopping for our business cell phones, Jeannie, we

make sure to do something every couple of years because otherwise

they will continue to go up.

This isn't about business, this is about personal, but I

want you to think about this.

On one vehicle I had, one vehicle that I've registered in Florida is mine and.

I've had the same insurance company for the past few years, and it had gone up.

It was almost, it was coming out like $2,000.

I shopped it and I'm saving $800 a year.

Think about that.

$800 a year on auto insurance.

And so as a business owner, think about, are your cell phone bills going up?

Is there anything in your business that you can shop for,

even your business insurance?

Can you shop for those things that make sure you're getting the best prices?

Because sometimes when you're with the same company.

It's kind of being boiled slowly, right?

They just go up a little bit each year and you're so busy you just

think, oh, that must be normal.

I hear about how expensive insurance is in Florida.

So I guess that's just the way it is.

And this year I was like, I'm just gonna, I'm gonna spend

some time and check around.

I was blown away that it was an $800 savings.

So yeah, we can end up wasting a lot of money.

I think that can be personal as well as business.

And that's another thing that I love, Jeannie, is so often our clients will

have once their bookkeeping VAs up and running with all their business stuff and

they built a great relationship with them.

They'll often have their bookkeeping VA take care of their business and

personal bookkeeping and that can just help them save so much money.

But actually I have a real life example as well, and that is our home wifi,

which I also use for my business.

And I had.

The same subscription I've had for years and years.

And then I think something, I had an issue with it, something wasn't working, and

so when I reached out to them, I said, what kind of deal can you gimme now?

Oh, we can give you this deal.

It halved my cost and from I think $150 to $70 a month.

I was shocked that, like you said, we forget when we use the same

company over and over, that A, we can shop it and that B, there just

may be a better package you can get.

And you're probably getting faster internet, better package all together.

So Great.

And again, we get so busy.

I know, Jeannie, when you started your business, your kids were little and then

you were taking care of aging parents.

Took care of both my parents when they were ill.

And so you go through these phases.

It's not just life, it's business, but we get so busy.

There's so much going on, and sometimes there's things that are just more

important than sitting down and shopping around for that or trying

to find that other pack of receipts that we could use for write offs.

So being proactive and having support.

I always like to use this, the word support, because when I think

about outsourcing, whether it's.

To a bookkeeping va, or you're using a software virtual assistant or a marketing

virtual assistant, it really is about having someone in your business to support

the things that need to get done in order to allow you to run a really profitable

business and have time for your life.

I, I, I feel we're a little older than a lot of the other business owners that

we talk to, and I feel like burnout has become such a big thing in some cases.

I feel like it's almost been a, a badge of honor, and I guess that

maybe that comes from the hustle culture, but being self-employed for

so many years, you're going on what?

18 years of being self-employed?

I've never burned out, and I think it's because you and I have both

understood the value of outsourcing.

And the value of having support in our business, or even sometimes

it's having support at home, right?

It could be someone that cleans the house or cuts the grass or things like that.

You can't do it all and you shouldn't.

And build a balanced, healthy life.

Yeah.

And especially the bookkeeping part, because that's the part that

we always feel bad about because we have, ugh, we're behind in our numbers

and ugh, we haven't looked at this.

And then there's that guilt and that shame of having that.

But when you have a bookkeeping person, a bookkeeping, virtual assistant.

You're looking at those numbers at least every month and you're

feeling really good about it.

Even if the numbers aren't great, there isn't a lot of revenue coming in.

You still know what your goals are and you know what you need to bring in

order to take care of those expenses.

So yeah, so valuable.

I love the whole concept of what we focus on.

We get, and if you focus on having a financially healthy business.

That's what you'll end up getting by going out and getting more clients,

raising your prices if you need to.

Eliminating some of your offers by having the information that bookkeeping

provides, because yes, we need bookkeeping for taxes, but the reality

is solid bookkeeping allows you to make decisions in real time based on the

numbers that you have, and that's really part of building a stable financial

business that can continue to grow.

Because if you're not looking at that financial foundation and a great

opportunity comes along to grow, you may not have the money for it, or

you may not have put the structure in place with other support people on

your team to be able to take on great opportunities or to double your income

or to scale at the level you want.

So understanding your numbers and really being active with

your finances, it doesn't mean you have to do your bookkeeping.

It just means you need to be involved with your bookkeeping

and reviewing things and really strategizing about how you wanna use.

Your money.

Yeah, because I think a lot of people see their sales and they assume

that's net revenue, and it's not.

It's gross revenue, right?

You have to take into consideration what am I paying for this?

What do I pay every month for that?

Or every once a year?

And so yeah, it's really important for you to stay on top of that.

Yeah, it's interesting because I was talking to someone, I was being

interviewed on a podcast the other day, and I don't recall who it is,

but we were talking after the podcast interview and the host said, do

you know so, and, and I said, no.

Who?

She was saying, oh, he is a great guy, blah, blah, blah.

He does, I, I think she said he does like 3 million in revenue, but he is

running like an 85% profit margin.

And I'm like, dang, that's impressive.

So you could have a $3 million business and make 50 grand a year.

And that means you've got a lot of headaches, a lot of liability, and a lot

of work for very little income that you're pulling out very little profit and salary

that you're pulling out for yourself.

So I think that's another way we like to encourage our clients

to look at your business.

You wanna look at it?

As your growth revenue, you wanna look at it in the sense, are you

pulling out a fair salary, something that will be competitive in the

marketplace, and then on top of your salary, is your business profitable?

So you're taking distributions.

And I think when people start to understand that part, it allows

you to cut costs anywhere you can.

If that money's not working for you and making a difference,

maybe you don't need to spend it.

And then how can you lower your cost?

And it's interesting because.

We were, I was talking to someone and there's a bookkeeping shortage in the us.

There's just not a lot of bookkeepers, and I actually hire bookkeepers

for bookkeeping companies and CPA companies, which is how you and I

ended up here today helping our clients hire bookkeeping virtual assistants.

But it's interesting because if you're a small business and we help

you hire a bookkeeper at $6 an hour.

So maybe your software's costing you $20 a month and your bookkeeper's

costing you $30 a month.

So you're paying 50 bucks a month for your bookkeeping as your business

grows and you become more profitable, and you could afford to pay 50 to a

hundred dollars an hour in the us.

But why?

Why pay more money for the same service?

You can get at a very cost effective rate.

So that's one of the things we're always talking about.

Is there a way to get the same quality of service or product at a better

price when you're thinking about how you're growing your business?

I love that.

Okay.

Another thing that people make the mistake in their bookkeeping

is, this is the big one, tax time.

They're not ready when the CPA says.

I need your stuff, or when that time of year rolls around and they go, oh, I

gotta pull all this stuff together, and then they're frantic for weeks and weeks

trying to find things that they had.

So that goes back to missing all of those write-offs and overpaying for services

and subscriptions and things like that.

So yeah, it's, think about the mental health, the mental stress

and anxiety and wasted energy.

Just so much wasted energy knowing here comes April 15th.

Oh man, I filed the extension.

Or if you have an LLC, March 15th, I've got the extension

filed so I can relax a little bit.

But then all of a sudden, the next deadline comes and you're back to

anxiety driven and in overdrive trying to get stuff together.

It is so much better to go into tax season with everything done.

You can hand it to your CPA, you could file your taxes without an extension,

but also what happens is as your business becomes more profitable and you're

able to take more money out personally.

By having everything done regularly, you can start meeting with your CPA

or your financial planner in advance.

If you wanted to start contributing to your IRAs or things that are tax

deferred, you can make a plan to do that to lower your tax liability.

So by having a plan in place, you can start strategizing

different tax strategies that may help you save more money.

I've got this book right here.

I have not read it yet.

I actually want it in an event, and it's called The Power of Zero.

It's basically like how to lower your taxes, how to get to a zero tax bracket.

I don't know how you do that and make a lot of money, but I'm gonna read it

and find out, and I'm actually gonna invite someone to come on our show to

talk about this because we wanna make all the money we can and we all have an

obligation to pay taxes and we wanna.

Help put those kindergartners through kindergarten and get them through

middle school and high school.

We wanna make sure our roads are taken care of.

We wanna make sure that we're taking care of elderly people,

like paying our taxes is important.

It funds the police department.

It does all of these things.

We want to pay taxes, but you don't wanna pay more taxes than you have to.

So the reality is by having great bookkeeping, you can start to really

learn how to manage your money so that you are paying your fair share of

taxes, but not overpaying in your taxes.

I love that.

So three mistakes that people make that we wanna make sure you

don't make are missing write-offs.

Two is subscription creep and the third is not being prepared

and planning for your taxes.

Yes, I'm hoping that everybody listening this has been really valuable for you and

that you've learned a little bit today.

And if you're actually interested in outsourcing your bookkeeping because

it's something you know you should do or you don't want to do, we will

put a link in the show notes to our program called Love Your Profit, where

we will help you find an amazing and qualified bookkeeping virtual assistant.

So thanks for joining us today.

Thanks for listening to the six Figure Business Mastery Podcast.

If you enjoyed listening to this episode and you are ready to leverage video

marketing on all online platforms, or maybe even start your own video

podcast, then you need to check out the Done for You and Done with You program

at the marketing va advantage.com and take your business to the next level.