Its year-end for most of our customers. Year-end means taxes. Yuk. However, this year will be different. You have a friend when it comes to combatting the evils of tax preparation and the demands for data by your accountant. That friend is the Bee!
The Bee was designed from the ground up to be more than just a pretty invoicing solution. While you’ve been out delighting clients and making money, the Bee has been watching every penny, peso, and lira. Now its time for you to call upon the Bee to help you through this time. Here’s what to do:
Input / Import your expenses.
This is the task most of us put off. Receipts and credit card statements pile up through out the year. Why not take some time now to import those expenses into the Bee. The Bee’s expense import feature makes it a snap. All you do is download a CSV file(s) from your credit card company, and the Bee will walk you through the process.
Have you written checks from a checking account? Simply grab a CSV file from your online banking and import these expenses as well.
Generate Reports.
Now that you have all your expenses and invoices in the Bee, generating the proper reports for your accountant to prepare taxes, couldn’t be easier. There are two reports you will want to print or export to Excel.
Accountant’s Export
Profitability Report
The Accountant’s Export will give you and your accountant a detail listing of all transactions that affect your tax calculation. Your accountant may or may not require this level of detail.
The Profitability Report shows a nice summary view of revenue and expenses by category. Having the expenses grouped by category is ideal for tax reporting purposes. As a reminder, for U.S. tax payers, the Bee allows you to automatically setup the expense categories required by the IRS (Schedule C categories). Finally, when running this report, you will probably select
“Collected (Cash Basis)” as the Revenue Basis. This selection reflects your status as a cash basistax payer.
Should you have any questions about end of year tasks, please don’t hesitate to send an email to our support folks at support@getthebee.com
November 23rd, 2010
As entrepreneurs, we constantly hear the accountant’s refrain, ”monitor your cash flow”, ”cash flow is the life-blood of your business”. All true. But if you find yourself constantly worrying about finding cash to pay bills, contractors, and employees, you may be treating the symptom, not the disease.
Most service businesses that I have encountered with poor cash flow, suffer from two basic problems. Cure these, and cash flow monitoring ceases to become a concern. What are the problems?
Low Margins
If the spread between what you charge for a service and what it costs you is small, there is very little cash left over to buffer unforeseen cash drains.
Bad Terms and Slow Collections
Make your payment terms too lenient, and you will be paying project costs out of pocket before the receivables come in. Further, not being diligent about collecting past due receivables, puts you farther behind the cash flow eight ball.
Check yourself. Are you spending a lot of time monitoring cash flow due to some fundamental flaws in your business model?
September 23rd, 2010
I had a conversation today with a former employee who has had his own consulting business for about a year now. He is at the point where he needs to increase his capacity to do more work for clients. We talked about the options for doing so.
Hire an Employee
Hiring an employee is a big commitment. You commit to paying a salary. Fixed costs every pay period. This makes sense if you have steady, recurring work (revenue!) , that you can depend on month after month. Possibly, you have clients that are on a monthly retainer. Or you have a large project that will stretch over 1 -2 years. Hiring an employee will typically (not always!), yield a better margin on service performed.
Hire a Contractor
Hiring a contractor is a bit like dipping your tow in the water to check the temperature. Much less of a commitment. Your costs are variable. You pay the contractor when they perform work. You match revenue with costs, protecting yourself from losing money in slow times. You don’t withhold payroll taxes and are not burdened by other costs associated with employee status.
In most cases it makes sense to go slow. Hire the contractor. Do you like working with this person? Do they treat your clients well? If the relationship works out, then consider offering the contractor a full-time position.
June 25th, 2010
Many service entrepreneurs and freelancers struggle with collecting the money owed to them. Past due accounts create stress, distract from your craft, and create cash flow problems. Here are four proven tips to get you paid.
1. Confirm Satisfaction. Immediately after delivering your service, and BEFORE invoicing, confirm with your client that they are satisfied with your work. In this conversation, be sure to refer back to your conditions of satisfaction .
2. Invoice Immediately. Don’t wait for the “magic” you created to wear off. Send the invoice immediately after confirming satisfaction.
3. Make the call. When the invoice becomes past due, don’t email. Call your client…..the person you worked with. Don’t call the accounts payable department. They don’t know, or care, about you. Calling sends a message that you are serious about getting paid. A phone call also sets up an immediate, two-way conversation that will allow you to uncover the reason why you have not been paid.
4. “I Need Your Help”. The four most powerful words in business are, “I need your help”. Call your client. Start the conversation with these exact words. ”Jennifer, I need your help. I have not been paid. What do you suggest?” Think about your experiences when others have asked you for help. By nature, humans respond to requests for help.
5. Mindset. Have the proper mindset when collecting past due accounts. Remember, it’s your money! It is not unprofessional to ask to be paid.
Any other tips you have on collecting past due accounts?
