Tax season is creeping up on us really fast!
So which one are you?
If you answered A, congratulations! However, there are many people I meet that are B. It will either take you days to put things together for your accountant, or the accountant will charge you extra for doing it for you.
1. How much do I need to make to be profitable?
We are all in business to make a profit. Even non-profit organizations need to at least break even.
Before we can get into calculating profitability, everyone needs to start by tracking their expenses. Without this information, you will not know how much money you need to bring in to cover your monthly costs.
2. Planning for the future
- Can I afford to hire someone to help me?
- Which product line is making me the most money – not necessarily which one I have sold the most?
- Who are my top clients and what percentage do they represent?
These questions can only be answered if you have been tracking both your income and expenses and having them properly categorized. Once you have the base system in place, you can then analyze the data and have it presented to you in a way where you can make proper decision in directing your company onto the path to success!
3. Preventing the unexpected
It is important for you to review your numbers on a regular basis and not wait until the end of the year. If part way through the year you are going off course on your spending, you need to know about it right away so you can take corrective action. You cannot recover from a bad year if you don’t know your numbers until your accountant finishes your taxes in the spring.
There are many ways to stay on top of things. A bookkeeper is helpful but some prefer the do-it-yourself method. If you are still doing things by hand, NCP Consulting has a spreadsheet that can help you throughout the year. It will not only organize your receipts, but your spending is also summarized for you to make decisions about your business.
Contact NCP Consulting for more details.