Tag: business finances

Are You Ready for Fourth Quarter?

Can you believe it? 2023 is speeding by, and we’re fast approaching the fourth quarter. Are you ready for a strong finish? Could it make or break your business? We’ll explore some effective strategies you can put in place to achieve your annual goals and start the new year strong.

1. Evaluate your financial health. Start by evaluating your current cash flow. Small businesses should aim for at least 3 months worth of cash reserves to cover their expenses. That said, even through periods of uncertainty, businesses shouldn’t sit on large reserves of cash. If your liquidity is strong and you’ve got enough to cover you for the next 90 days, then invest in growth. In keeping with cash flow, it’s also a good idea to review your clients and highlight any late payers.

2. Invest in talent. With salaries and contractor costs accounting for up to 60% of your total expenses, your people are your biggest asset. Therefore, to help set you up for a strong fourth quarter, consider investing in your team. As the saying goes, “people buy from people”, and so by investing in your team members, your clients will enjoy working with a motivated, efficient, and highly skilled team, which will drive strong results for the end of the year.

3. Set up simple structures. If you want a strong finish to the fourth quarter, consider setting up simple structures to improve efficiency. By streamlining internal processes, you’ll make your workflows more efficient, which means a more productive team, which also will give you the competitive advantage to finish the year strong. Consider investing in software that automates time tracking and project management to help set up simple structures and operations in your business.

4. Design a three-month game plan. As we approach the fourth quarter, it’s time to sit down and devise a sales strategy and marketing plan to finish the year strong. To help you do this, you should first assess your current year-to-date performance. How was the last quarter? How are you tracking year-to-date? Aside from the goal-setting and sales plan, you should also design an aggressive marketing strategy to set up strong pipelines for the new year.

With year-end fast approaching, now’s the time for professional services firms to devise a plan to get ready and finish strong. You should also use the next three months to assess your financial health, invest in your team, and set up simple structures to ensure a strong start to the new fiscal year. Schedule a call to learn more about how we can help with your business’s financial health.

Summer Financial Health Check: Assessing Your Business’s Financial Well-Being

As the sun shines brightly and the temperatures rise, summer presents the perfect opportunity for business owners to take a step back and conduct a thorough financial health check.

Assessing your business’s financial well-being during this season can provide valuable insights and help you make informed decisions for the rest of the year. Here are some key steps to consider in your summer financial assessment:

1. Start by analyzing your income and expenses for the first half of the year. Identify any trends or patterns, and compare the figures to your initial projections. This review will give you a clear picture of how your business is performing financially.

2. Review your profit margins and overall profitability. Identify areas where you can reduce costs or increase revenue. This assessment can help you fine-tune your pricing strategies and budget allocations.

3. Take the time to adjust your budget for the second half of the year based on your financial assessment. Account for any changes in income, expenses, or business goals. A well-adjusted budget will serve as a roadmap for the remainder of the year.

4. Consider gathering customer feedback on your products or services. Satisfied customers are more likely to become loyal, repeat customers. Address any concerns or suggestions to enhance customer satisfaction.

5. Engage with financial advisors or accountants to gain valuable insights and expert advice. Their expertise can help you make well-informed financial decisions and set your business up for success.

Conducting a summer financial health check allows you to identify strengths, weaknesses, and growth opportunities for your business. With this knowledge, you can proactively address any financial challenges and build a solid foundation for continued success throughout the year and beyond.

Looking for help with your business finances? We’ve been working with small business owners to free up more time, get more financial clarity, and create more cash flow in their businesses. Ready to learn more? Book a call to get started!

The Benefits of Hiring Independent Contractors for Your Business

As a business owner, you’re constantly faced with decisions that impact the success and growth of your company. One such decision is whether to hire employees or independent contractors to meet your business’s needs. Hiring independent contractors can offer numerous advantages, and understanding the benefits can help you make an informed choice for your business.

1. Cost-Effectiveness: One of the most significant advantages of hiring independent contractors is cost-effectiveness. Unlike employees, independent contractors are not entitled to benefits such as health insurance, retirement plans, or paid time off. This means you can save on payroll taxes and other employee-related expenses, resulting in significant cost savings for your business.

2. Flexibility: Independent contractors provide a high level of flexibility for short-term or project-based work. Whether you need extra help during peak seasons or require specialized skills for specific tasks, independent contractors allow you to scale your workforce as needed without long-term commitments.

3. Specialized Skills: Independent contractors often bring specialized skills and expertise to the table. By hiring contractors with unique talents, you can access high-quality work and knowledge that may not be available within your existing team.

4. Reduced Administrative Burden: Hiring and managing employees comes with various administrative responsibilities, from payroll processing to compliance with labor laws. When you hire independent contractors, many of these administrative tasks are often handled by the contractors themselves, easing your administrative burden.

5. Limited Liability: Independent contractors are responsible for their own business operations and liability. This means that you may have reduced legal exposure compared to hiring employees.

It’s important to note that misclassifying employees as independent contractors can lead to legal issues and fines. Make sure to adhere to legal guidelines and the CRA criteria for determining worker classification.

Discover the seamless experience of working with our expert team. Let us handle your business finances while you focus on growing your business.

How to Make the Most of the Next 6 Months of 2023 For Your Business

The last six months are a great opportunity to reflect on achievements, reassess goals, and lay the groundwork for a successful year-end. To make the most of this time, it is essential to identify key focus areas that can help move your business forward. Here are 4 crucial aspects that businesses should prioritize during the last six months of the year.

Goal Review and Adjustment

Begin by evaluating the goals you set at the beginning of the year. Determine what progress has been made and identify any adjustments needed to align with current market conditions and evolving business dynamics. This assessment will provide a clear roadmap for the next six months.

Client Engagement and Retention

Focus on nurturing existing customer relationships. Implement targeted marketing campaigns and personalized communication to engage customers, and encourage repeat business. Leverage customer feedback to identify areas for improvement and enhance the overall customer experience.

Operational Efficiency

Streamline internal processes and optimize efficiency across departments. Evaluate workflows, identify bottlenecks, and implement automation or technology solutions to enhance productivity. Focus on cost management and identify areas for potential savings without compromising quality.

Financial Management

Pay close attention to financial performance and cash flow management. Review budgets, track expenses, and ensure proper accounting practices. Prepare for tax season in advance, engage with your bookkeepers or accountant, and explore opportunities to optimize revenue generation.

The last six months of the year are a valuable opportunity to drive growth and position your business for success. By focusing on key areas such as goal review, customer engagement, operational efficiency, and financial management, you can set the stage for a strong finish to the current year and a promising start to the next. To learn more about how we can help manage and keep your finances organized through the rest of the year, schedule a call with us today.

How To Conduct A Mid-Year Budget Review

With the midyear of 2022 quickly approaching, it’s a great time to perform a budget checkup to help evaluate how your business is performing and determine whether any adjustments should be made to ensure a successful year-end. Consider these key areas of your budget when conducting a midyear review:

  1. How are your year-to-date expenses and revenue aligning with your initial projections? Are you meeting your sales goals? If not, how will you address the situation? Add new products? Eliminate unprofitable products that may be zapping your time? Are you pricing your product correctly? Is your marketing/sales plan being followed? What is the potential revenue from the changes you are making?
  2. What is your cash flow situation? Many businesses have been experiencing significant cash flow shortages due to cost fluctuations in supplies and, in some cases, slow-paying customers. Consider performing a cash flow analysis to help detect if there are any collection issues or whether you should revisit some of your vendor relations. Once you’ve reviewed key areas such as the actual costs of your inventory or supplies, vendor payments and collections from customers, it will help you make the appropriate adjustments.
  3. Are there any adjustments you should consider from a tax perspective? A few areas to evaluate from a tax perspective include whether there have been any recent changes in tax laws, plans for capital expenditures, and tracking your quarterly tax payments to see if any adjustments should be made. With economic conditions changing so drastically right now, it’s a great time to review these payments rather than wait until the year-end, when you usually do.
  4. If you hire new personnel, there are more things to consider as well. Will additional phones be needed, cell phone or land line? How much training time is needed? What will the training cost? Are more supplies needed? Is there enough office space?

Have questions or need assistance with your budget review, contact us today.

How to Build a Business Emergency Fund in 8 Steps

An emergency fund is an essential part of a solid financial plan. It can help you pay unexpected expenses and avoid taking on more debt from high-interest credit cards or loans. You can build up your business cash reserve account in several ways:

  1. Determine Your Needs. The first step is to determine how much you need in an emergency. Your needs will be unique, depending on your business. A rule of thumb, 10% of your annual revenue might be a good benchmark.
  2. Set Reasonable Emergency Savings Goals. Start small so you can meet your monthly savings goal than struggling to hit a bigger number. Set small, achievable targets for your monthly savings, and increase the amounts when you’re comfortable that you can handle them without hurting your business.
  3. Save Consistently to Build Your Cash Reserve Fund. As with any savings program, you need to put together a plan and follow it consistently. Commit to putting a certain amount of money aside each month. One of the easiest ways to do this is to save a percentage of your monthly revenue.
  4. Automate Business Emergency Fund Savings. An effective way to build a financial cushion for your company is to open a separate account and set up a monthly deposit from your business account. Then savings can happen without requiring you to manually move the money each month.
  5. When Business Is Good, Build Up Your Financial Cushion. When you have a good month financially and a better net profit, put a little extra into your emergency business funding until you reach your goal.
  6. Check for Nonessential Expenses. Certain expenses are unavoidable. If you have a mortgage on your property, you need to make the monthly payment. You’ll need to pay utilities and employees if you want to stay in business. However, other items aren’t essential.
  7. Protect Your Business Emergency Fund. It can be tempting to dip into your emergency fund for things that aren’t emergencies. Avoid the temptation to do that if at all possible.
  8. Don’t Stop Building Your Cash Reserve Fund. When you reach your goal, take a breath and congratulate yourself. It’s a big step. Consider continuing to save and building your cash reserve fund to create an even bigger financial cushion.

Setting up a business cash reserve fund also provides peace of mind. You’ll sleep better knowing you have some money set aside to handle emergencies. If you’d like to learn more about how we can take managing your business finances off your plate and help you grow your business, schedule a call with us today!

5 Step to Conduct a Mid-Year Financial Assessment

A mid-year financial assessment is the best way to evaluate whether or not you are on target to hit your goals. It’s also the perfect time to pivot if you’ve gotten off track. However, to point yourself back in the right direction, you have to know where you’re currently standing:

  1. Check-in With Yourself. First and foremost, how are you feeling about your business at the mid-year mark? Do you feel like you’re on your way to achieving whatever it was you originally set out to achieve? If not, this is a great time to get clear on whether you’re running your business or whether your business is running you.
  2. Revisit Your Budget. The mid-year check-in provides a perfect budget review opportunity. Take a look at what you forecasted for the year in terms of revenue and expenses.
  3. Review Your Financial Statements. Profit and loss statements, balance sheets, and cash flow statements are standard financial documents to review during a financial checkup. Compare your financials right now to your financials from this time last year to trends and cycles.
  4. Evaluate Your Goal Progression. Remember those goals you set for your business at the start of the year? It’s time to see where you’re at in meeting them. Whether you set concrete financial milestones or identified systems and processes you wanted to employ, take some time to see if you’ve made meaningful strides toward getting there.
  5. Check-in On Your Taxes. This is a good time to make adjustments to your 3rd and 4th quarter estimated payments if you’re forecasting an increase in revenue for the second half of the year. If you haven’t made your estimated tax payments, then it might be worth scheduling an appointment with your tax professional. Putting off making tax payments causes unnecessary stress. Attending to taxes all year can make for an easier, less stressful spring.

Building good habits as an entrepreneur, like running a mid-year financial checkup, is critical to the success of your business. But habits aren’t always easy to establish or maintain. Maybe you don’t even know where to start. If your business needs support, contact us today to schedule a consultation.

Is Outsourcing the Right Option to Grow Your Business?

Outsourcing helps you abandon the mindset of “I can do it all myself” and offload boring back-office tasks and hand them over to professionals with better expertise and reasonable costs.

Before outsourcing, consider:

  • If you can afford and have the monthly budget of the services
  • If the costs incurred by outsourcing benefit the business in any way
  • If you are equipped to handle the task on your own
  • If outsourcing helps you focus on the strengths of the business

Here are the advantages of outsourcing:

  1. Increased productivity. Many entrepreneurs think they can do everything, but by eliminating the most time-consuming tasks, you can focus on tasks that make a huge difference in meeting the goals of your business.
  2. More time. Time is a limiting factor, you can spend your valuable time dealing with more important tasks like providing the best customer service and improving your ROI rather than wasting your time managing your bookkeeping.
  3. Expert services. Outsourcing allows you to hire an expert for a specific task without dealing with the risk of degraded quality. By outsourcing the right work to more qualified professionals, the books are handled timely and accurately than if business owners handled the same thing themselves.
  4. Cost-effective. Recruiting and training people is expensive and time-consuming; there are other hidden costs to consider as well. You will be able to harness the expertise of a professional without breaking the bank or incurring high overhead costs.
  5. Investing in other growth areas. Comparatively, it is much more affordable to get a task done by a professional externally rather than paying a monthly salary to a hired professional within the business. This increases your budget in other areas.

Outsourcing can bring significant benefits to the business. If you’d like to learn more on how we can help take managing your business finances off your plate and help you grow your business, schedule a call with us today!

5 Financial Reports You Should Track For Your Business

There are a number of financial reports that can give information on the business’s past, current, and future financial state. The top five financial reports that every business owner has to regularly and yearly review to better understand the business’s financial performance are listed below.

  • Balance Sheet. It provides a snapshot of a business’s financial position, including the economic resources the business owns or owes and the sources of financing for those resources.
  • Income Statement. It summarizes the total revenues and expenses incurred by the business, showing the profitability (net income or net loss) over a specified period of time, usually a month, quarter, or year.
  • Cash Flow Statement. It is presented in three sections: operating, financing, and investing activities, and it indicates which areas of the business are generating and using the most cash. One of the best uses for the Cash Flow Statement is to estimate future cash flow, which will assist with budgeting and decision-making.
  • Accounts Receivable Aging Report. It categorizes outstanding accounts receivable into groups based on the due date of the invoice, typically current, as well as 1-30, 31-60, 61-90, and >90 days overdue.
  • Budget vs. Actual. It can help identify areas that were over or under budget, indicating the ability to hire additional employees. The Budget vs. Actual Report should be prepared on a monthly basis and reviewed with the financial statements to determine if any areas of the business are not meeting expectations and should be investigated further.

We consistently provide timely and accurate financials and reports (like the ones mentioned above) on a monthly basis, as well as the actionable financial analysis you need to effectively run your business, analyze operations, and guide business decisions. If your business needs support, contact us today to schedule a consultation.

Running Reports in Quickbooks

Running Reports in Quickbooks

How much insight do you have into your business’s finances?

At The Number Works, we work hard to ensure that our clients completely understand their businesses’ financials and that they’re fully aware of what is happening with their bottom line.

But what if you’re going at it alone without an accountant, bookkeeper, or other financial professionals? How can you get the kind of financial insights that you need to grow your business?

Let us introduce you to a powerful QuickBooks Online feature that can help you keep your finger on the pulse of your finances: Reports!

QuickBooks Online

Suppose you currently handle your finances through Excel spreadsheets and put your business receipts in a box. In that case, it’s definitely time for a significant upgrade in the way you manage your financial information!

There are many online accounting systems that can help you make this upgrade, but our favourite, by far, is QuickBooks Online (QBO).

In our opinion, QBO’s cloud-based service offers business owners the best mix of features, ease of use, and affordability. As everything is hosted in the cloud, you can access information about your business’s finances on any device that has an internet connection. And with its flexible plan structure, you can pick the version of QBO that best meets your needs and budget!

QBO Reports

There are over 120 reports that you can run through QuickBooks Online, depending on your plan. These reports can offer you insights into almost every aspect of your business, including:

  • Sales
  • Purchases
  • Inventory
  • Banking
  • Payroll
  • Accounting
  • Budgets
  • …And many more!

Many businesses will only use a small number of these reports, while others might use all 120. The best part about QBO is that you can customize your Reports Center to only see the reports that apply to your situation.

How to Run a Report

To get started, click on the Reports option in the sidebar. You’ll then need to pick one of the categories. At the top of the screen, you’ll see several options, including Standard, Custom, and Management. After you’ve learned how to set up reports, you can focus on these other options. For now, select Standard.

This is the area where you select the type of report you want to run. If you wish, you can click on the Star next to a report, and it will appear in Favorites at the top of the Standard report page for easy access.

Once you’ve selected a report category, it will appear on the screen. To update your report at any time, you can click on “Run Report.”

Customize Your Reports

From here, you have many options for customizing the information you see in your chosen report.

For example, you can select a date range at the top for your report from the presets, or you can choose “Custom” if you only want to see a specific set of dates.

You can also select either accrual or cash-basis accounting. You have the option to compare your current report to a previous period or customize the report so you won’t need to see any rows that contain zeros.

At the top of the report, you can select how you want the information sorted, along with adding notes. Notes can be an invaluable feature if you plan on sharing reports with an accountant or bookkeeper.

If you click on the “Customize” option to the right, you can pick more specific options, including filters. You can then save all of these customizations, allowing you to access your customized reports from the Reports menu in the future without needing to alter any of the settings!

Creating reports is easy, but the tricky part is understanding them. That’s where The Number Works comes in! We can help you get a better handle on your business by teaching you how to interpret the numbers to ensure you know the state of your current finances.

The Number Works also helps small business owners learn how to use some of the more complex features of QuickBooks Online, including reporting. If you’d like to learn more about QuickBooks Online and how it can help you grow your business, please feel free to get in touch with us today!