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So what exactly is TSheets? TSheets is a time tracking and scheduling software designed for businesses that track, manage, and report time. TSheets provides the alternative to paper timesheets and/or punch cards to simplify human resource and data processing roles for companies of all sizes.
Small business owners have a lot on their plates, and time simply does not allow you to become an expert in all the areas required for running a business. Here are a couple of common mistakes that we see all the time. Correcting them will help you be more productive and profitable in your business.
1. Mismanaging receipts
Maintaining receipts are challenging for everyone, but the IRS requires that you have proof of business expenditures. Periodically, we come across people who feel that keeping the credit card statements are enough; unfortunately, they’re not. You’ll want to create a process to keep your receipts all in one place so they don’t get lost.
Receipts printed on thermal paper (think gas station receipts and many more) will fade within a year or two, and the bad news is the IRS could audit several years back if they come calling. Correct this by scanning them in or taking a clear picture of them using your smartphone.
Some accounting systems and/or document management applications allow you to upload the receipt and attach it to the transaction in your accounting system. This is a great solution, and if you’re interested in this, please ask us about it.
2. Ignoring the accounting reports
There are gold nuggets in your accounting reports, but some business owners don’t take the time to review them or are uncertain about how to interpret them. Your accountant can help you understand the reports and find the gold nuggets that can help you take action toward profitability.
Some of the things you can do with your reports include:
- Identifying your highest selling services or products
- Projecting cash flow so you’re not caught short at payroll time
- Getting clear on your top customers or your demographic of top customers
- Evaluating your marketing or business development spend
- Pointing out trends compared to prior years, budget, or seasonality effects
- Checking up on profit margins per product or service to make sure you are priced correctly
- Managing aging receivables or speeding up collections
- Measuring employee profitability, if relevant
- And so much more
Being proactive with your accounting will help you spot opportunities in your business that you can act on, as well as spot and correct problems long before they manifest into trouble.
3. Mixing business and pleasure
In your bank accounts and on your credit cards, mixing business and pleasure is to be avoided when possible. All businesses should have a separate bank account, and all business transactions should go through there. It takes an accountant much longer to correctly book a business deposit that was deposited into a personal account.
Taking out a separate credit card and putting all your business transactions on it will save your bookkeeper a ton of time. The credit card doesn’t even have to be a business credit card. It can just be a personal credit card that’s solely used for business. If you have employees making credit card charges, sometimes a separate card for them helps you control fraud.
The hardest area in which to separate business from pleasure is cash transactions. Be sure your accountant knows about these. The accountant can either set up a petty cash account or a reimbursement process so that you can get credit for cash expenditures that are for the business.
How did you rate on these three mistakes? Avoid these three and your accounting department as well as your business will run a lot smoother.
As a business owner, you’re likely torn in a hundred different directions every day. It can take up most of the work day just fighting fires, serving your customers, and answering employee questions – never mind the time spent on email. It’s super-easy to lose sight of what you can be doing to move your business forward the most.
That’s when “the one question” can come in handy. It’s something you can ask yourself at the very beginning of each day, even before you check your email. Make your question about you and your goals for your company.
The one question is, “What’s the highest payback thing I can do today?”
If your goal is to boost profits, then ask “What’s the highest payback thing I can do today that will boost my profits?” If your goal is to empower your employees, then ask “What’s the highest payback thing I can do today that will empower my employees?” If your goal is to make a difference in your community, then ask “What’s the highest payback thing I can do today to make a difference in my community?” If your goal is something else, tailor your one question to that specific goal.
It’s not about fighting fires or answering routine employee questions or even serving current customers. Although those tasks are all important and essential, none of them will take your business to the next level.
It could be meeting with a power partner or referral source that sends you a lot of business, designing the next campaign that will bring in a higher level customer, meeting with your employees for lunch, or researching new products to sell. It’s going to be a task that gets you working “on” your business instead of “in” your business.
If you like this idea, consider writing the question on a sticky note and posting it to your bulletin board so that you can see it every day. I write my question and my intentions each morning on a colorful piece of paper that I carry with me all day. I do this while having my coffee and long before I check an email, text or telephone message.
Try asking yourself this one question each day: “What’s the highest payback thing I can do today?” Then do it, and watch your business grow.
Many businesses operate with seasonal peaks and valleys. Retail stores flourish in their busy holiday season. Construction contractors are busy when the weather is good. Accountants are very busy from January through April, but also experience a quarterly peak in July and October.
Your business many have its own calendar of busy and slow times. If your business goes through slow times, then your cash flow may suffer at certain times of the year. But having seasonal sales is only one of the reasons for a bumpy cash flow.
You might also have a business where annual payments are made for many items such as equipment purchases, software licenses, insurance renewals, and other large costs. On the revenue side, it could be that your clients pay you annually, which can be hard to predict.
There are many solutions that can help to smooth out the seasonal bumps, and here are a few ideas for your consideration.
Plan for Prosperity
When income and expenses go up and down and up and down, it’s really hard to know if you have enough money for obligations coming up. Creating a budget can help a great deal. Consider creating two budgets: one that shows the ups and downs and one that averages a year’s income and expenses into twelve equal parts.
With both budgets, you’ll be able to see which months will be deviating from average and by how much. From there, it’s easy to create some forecasts so you can stay on top of your cash requirements.
Cash vs. Accrual Basis
It might help your business decision-making to convert your books from cash basis to accrual basis. This is a huge decision that should be made with an accounting and tax expert, as there are plenty of ramifications to discuss.
In some cases, the accrual basis of accounting will help keep those annual payments from sneaking up on you as 1/12 of the payment can be accrued on a monthly basis to a payables account. This also keeps your net income figure steadier from month to month.
If your clients prepay their accounts on a yearly basis, you can book the income monthly and keep the difference in a Prepaid account. This spreads your revenues out and recognizes them over time.
If you feel accrual basis accounting is a little too much of a commitment, your accountant can still work with you to help you avoid the impulse of spending too much during the cash-rich busy season. Perhaps the excess cash can be put into a savings account until it’s needed. You can draw out 1/12 each month as you need it. A little planning such as the above suggested forecasts will help you determine how much you can take out each month. You can even name the Savings account “Do Not Spend!” or “Save for a Rainy Day.”
If it’s just too tempting to have all that excess cash building up in the good times of the year, try one of the ideas above to take back cash flow control and smooth out those bumps.