Last week we talked about how understanding your small business expenses is a crucial component in making your business more profitable. Now we’re going to build on that with what we all really think of when we think of profitability, income.

The Expense and Income Relationship

In its most simple form, your income is all the money you bring in and your expenses are all the money that goes out. Your profit, or lack of, is the difference between these two numbers.

One common phrase that we hear and say frequently is “if you want to make money, you have to spend money.”

That doesn’t mean you just need to spend a certain amount of money, you need to make good decisions about what you spend your money on so those expense result in income for your small business.

Evaluating your expenses on a regular basis is one of the best ways for small business owners to stay on top of their financial plans and, most importantly, meet...

Keeping your Small Business books in good order is something that we’ve hammered home to our readers over the last year - but there’s more to good business than just keeping your books up to date, in fact, that’s only the beginning! 

Good bookkeeping is the gateway to making your business go from good to amazing and it will allow you to turn small successes into huge gains.

So.... What is profitability?

Well it’s not just your top line that is important. That is to say, profitability is not measured only by your INCOME, it’s more than that.

Profit is an absolute number that is calculated by subtracting the total expenses from the total income.

So your profit margin is a solid number, while your profitability is a relative one. If this sounds more like math theory than business practice, don’t worry, stick with us and we'll explain...  

In the most simple sense, profitability is a metric that a company will use to determine how...

Employment taxes

We typically think of taxes as a once a year rodeo. There are, however, taxes that are reported and paid on a regular basis, such as employment taxes.

If you as a small business owner have employed other individuals on an hourly or salary basis, then you are responsible for paying certain types of taxes to the government.

As an employer not only must you pay and report employment taxes to the government, you are also required to prepare W-2 forms to report wages, tips, and other compensation paid to your employees.

There are two main factors that you have to pay attention to when it comes to employment taxes: reporting schedules and the different types of taxes.

Tax Types

There are several categories of taxes that an employer is responsible for and you must make sure that you are not only withholding them, but also that they’re making it to the correct place.

As an employer, you are responsible for calculating and...

We see you... small business owners

We know how demanding and stressful and hard it is to be self-employed.

We know how exhausting, frustrating and rewarding being your own boss can be.  We also know that carrying around that stress can negatively impact all aspects of your life, not just your business!   

And we know that when we're stressed.... how hard it is to stay inspired and focused on your passions and goals.

So we wanted to take a minute to share with you a stress reduction exercise that we do when we're feeling completely crushed by the overwhelming weight of the responsibilities of being self-employed...

So.... Whether you started your business 10 years ago, 10 months ago, or you've just come up with 10 ideas for your first business, we want to give you some strategies that work for us when we're feeling burned out and uninspired.

Whenever we're feeling like we can't keep up our head above water, it helps for us...

With the regular 2018 tax season over, most of us are breathing a sigh of relief, but it doesn’t mean that we can slack off! Staying on top of your taxes is a year long process, but it doesn’t have to be a stressful one.

Whether this tax season was a breeze for your small business, or it was traumatizing and you considered the white flag, we have a way for you to keep your taxes in line and out of mind!

Estimates

How do you know if you need to pay quarterly estimated taxes?

If you are a sole proprietor, S-Corp shareholder, or self employed, you generally have to pay quarterly taxes.

If you will owe $1000 dollars or more in taxes, you should definitely be paying quarterly tax estimates.

Why do we pay quarterly and not just once a year?

This cuts down on penalties from the IRS. It also allows your small business to plan accordingly for four smaller expenses instead of one large yearly expense.

Withholding

If you are an employee or if...

Tax season is stressful even when you’re prepared for it, but it’s downright overwhelming when you aren’t. Piles of paperwork, deadlines, and the fear of not knowing how much you might owe can make the most shrewd business owner consider procrastinating until the last minute, we know, we’ve considered that one-way ticket to Kauai too.

Never fear, we’ve compiled some great advice to help you climb that tax mountain and find your sweet return at the top!

1 Know your Deadlines

If you know when you need to have things done by, planning them out is easier. Here are the most important tax deadlines that you should know about:

• January 31, 2019: File forms 1099 for non-employee payments you made of over $600.
• March 15, 2019: Partnerships & S-Corps must file by this deadline and provide K-1 forms to partners or shareholders.

• April 15, 2019: Individuals and Corporations must file their 2018 taxes. The 6-month extension and...

The tax law reform that went into effect in January of 2018 was the biggest reform passed in the last 30 years. It will affect both individual and business returns in multiple ways.

If you’re curious as to how these laws may change your tax return, we have you covered!

Changes for Individual Taxes in 2018

There are several large changes that you’ll be seeing this spring on your tax return, and some are more noticeable than others.

The Racket About Brackets

For 2018 the tax brackets have seen significant changes that will affect how much you owe compared to the previous year.

These rates will change again for 2019.

Exemptions and Deductions

Personal and Dependent deductions, the per person deductions of $4050 on your 2017 return, have been suspended, and will not be appearing on your 2018 return.

However, the standard deduction has been significantly raised.

For healthcare, the allowable medical deduction floor has been...

There’s nothing quite like the end of the year to help remind you about how busy you’ve been for the past 11 and a half months.

So, to put a bow on our 2018, we’ve got a short list of our best bookkeeping blogs and our guide on how to pay yourself.

If you’re spending a lot of time with us, there’s a decent chance that you’re in the northern hemisphere, and that means it’s winter! Here’s my favorite warm drink recipe, a mexican mocha, as a little treat from me to you this season!

Inside Out Mexican Mocha Recipe

This can be used with a regular 8 ounce cup of coffee or with a double espresso shot :)

• 1 cup powdered sugar

• ½ cup unsweetened cocoa powder

• 2 generous tsp of cinnamon

• 2 tsp nutmeg

• 1 tsp cayenne pepper (1 ½ if you like things a little spicy, like me)

• Use 3 Tbsp per serving, mix into a regular cup of coffee or your favorite espresso drink.

• Enjoy!

End of the Year...

Can you believe that 2018 is almost done??!

We certainly can’t! It doesn’t seem to matter how organized your are, when you have a lot of stuff to do, it’s almost like time passes faster. And since I’d get in trouble if this blog became a discussion about relativity, we’ll skip to the good part and cover 4 Tips and Tricks to help you make sure your books are where they need to be!

4 Ways to Ensure your Books are Ready for the New Year

If you’ve kept up with our blogs throughout 2018, you might be familiar with some of these tips, but that won’t make them any less useful.

Whether you’ve mostly kept up with your books for the year, or you’re staring down multiple months of transactions, read on for some ways to save your time and sanity!

1 The Chart of Accounts

Your Chart of Accounts, or CoA, is your friend! It contains all of the categories that you use to keep your bookkeeping records as well...

In our last blog post, we talked about Quickbooks Online integrated applications for tracking mileage. This week we’re still talking QBO integrations, but now it’s all about TIME!

In your small business, time is quite literally money, whether it’s billable to your client or the hours that go into figuring out your payroll, you absolutely must be tracking work hours!

Time Management

Tracking your and your employee’s time is important, obviously. But, like most things in business.... Just because it’s important doesn’t mean it’s convenient or easy though!

Time tracking applications exist to save you time and to help prevent mistakes. Many options allow you to code different pay rates, set schedules or approve time, and view basic reports on how much time and money are going to different types of work.

All of the applications we’re covering here will integrate directly with Quickbooks Online, making it...