Business Management Archives | Number Nerd Bookkeeping Solutions

July 9, 2019

How many hours do you really work each week?

If you’ve been around here long, you know I’m a big fan of efficiency. I don’t like wasting my time or yours, so today, we’re jumping right into it.

But first, answer me this: How many hours do you work each week?

As entrepreneurs who feel like the work never ends and that there’s always something more we could be doing, it’s easy to get sucked into working around the clock. Always trying to do more and multitasking trying to do everything at once. I know I’ve been guilty of this in the past, but the longer I’m in business, the more I realize this isn’t the way to build a sustainable business that brings time and financial freedom for the long run.

Think back to the number of hours you said you work each week. Do you actually know the number, or was it just a guess? Many of us say that we work 50, 60, 70+ hours per week, but studies have shown that when we guestimate how many hours we work, we almost always overestimate.

We live in a world that loves busy and multitasking and makes it easy to tie our worth to our hustle and the number of hours we put in each week. It’s no wonder we subconsciously raise that number in our minds to make ourselves feel a little better about how hard we’re working. But if we’re overestimating the amount of time we spend working each week, where on earth is all of our time going?

Your time is your most valuable resource – even more valuable than money. Money can always be replaced, and it’s always coming and going, but we have a finite and unknown amount of time available to us. Once it’s gone, it’s gone for good. As a bookkeeper, I’m a big advocate of being a steward of your finances: knowing where your money comes from and where it goes, and making smart decisions about how you use it. I believe just as strongly in being a steward of your time. It’s so important to make sure you’re using this precious resource wisely. And I’ll let you in on a little secret…when you know where your time is going, it also helps you make better decisions about your money, and ultimately make more of it.

When you know where you’re time is going, you can make informed decisions about what you say “yes” or “no” to, you’ll know exactly how long each task in your business take you, and you can price your offers accordingly. This is why it’s so important to track your time.

Many of my clients, especially the creatives, are hesitant at first about all this time tracking business. It can feel a little restricting and tedious in the beginning, but all of my clients who have gotten serious about tracking their time find that it makes them work much more efficiently, and ultimately brings them more freedom in their lives and businesses. You see, when you record where you spend your time, it eliminates multitasking and helps you to focus on one task at a time. In the same way that keeping a food journal helps people who are trying to lose weight get better, faster results, when you track your time, it makes you more efficient and helps you free up more time in the long run.

There are many different tools out there that make time tracking simple. Personally, my team and I use ClockShark, and Harvest is another great option to get started with time tracking for free. You could also use a simple spreadsheet, or even pen and paper to track your time. The important thing is that you choose a time tracking method and stick to it. Try tracking your time for 2 weeks, and I promise you’ll get some eye-opening insights to the way you spend time in your business.

What method will you use to start tracking your time?

Check out these other resources to help you track your time and run your business more efficiently:

Technology Tip Tuesday: Harvest Time Tracking

The Ultimate Pricing Guide for Creative Entrepreneurs

Are You Pricing Your Services Right?

June 27, 2019

The Ultimate Pricing Guide for Creative Entrepreneurs

Find out how much money you’re really making in your business, and how to adjust your prices accordingly.

Pricing your offers can be tricky, especially in the early stages of business. When I started working with clients on their pricing, I quickly realized that many were setting prices without much rhyme or reason behind them. I’ve heard everything from coming up with a number on a whim, to basing prices solely on what competitors are charging. Trust me, this is NOT the way you want to calculate your prices.

The problem with setting your rates this way is that there’s no backbone to your pricing.

Your prices should be based on a logical and repeatable calculation, so that you can confidently share your prices knowing that they’re justified. Click To Tweet

Today, I’m going to help you do just that.

I’m sharing the process I go through with my clients to help them understand their numbers, and make informed decisions about their pricing. 9 times out of 10, this process reveals that they’ve been undercharging, sometimes by a whole lot. By the end, they can see all the underlying time and monetary costs in their business, and confidently raise their prices knowing they’re justified. Sound good? Let’s get started.

Personal Expenses First

Before you start looking at you’re prices, let’s take a steps back. You need to know your personal expenses, and what you need to make each month to meet your personal income requirements. This is why you went into business in the first place right? You’ve got to take care of yourself first. Try to find both your NEED number, (the bare minimum you must make each month), and your WANT number, (enough to afford extras and have the lifestyle you want). You want to aim for the WANT number, but it’s important to know the non-negotiable amount that you can’t dip below.

A good way to calculate these numbers is to look at your expenses, and categorize how much you spend on different things. This process takes time, and you may need to pay track your spending for a month or so to get a clear picture of where your money is going.

Also consider how much you made in your previous job and the income you want to replace. Were you making enough to cover your expenses? Do you want to make more than that?

Whatever the number is, you need to know your personal expenses so you can pay yourself enough to cover them.

Next, Business Expenses

Now let’s look at the costs of running your business. Make a list of all of your overhead costs: subscriptions, software, rent, office supplies, payments to team members, everything you spend to keep your business running. If you’re trying to replace a corporate salary, be sure to include the benefits that your company paid used to cover – this usually includes things like health insurance and taxes taken out of your paycheck.

Add up your business expenses (don’t forget taxes!) + your personal expenses and you’ve got your minimum that you need to make every month. Calculating your expenses this way helps you see the full picture of everything you’re spending (or would like to spend.) How are we doing so far? If these numbers don’t reflect what you’re currently making, hold on. We’re not done yet.

Time = Money?

You’ll also want to consider the number of hours you work each week when calculating your prices. Don’t get me wrong, I’m not suggesting you charge your clients an hourly rate, or that you create a business model where you simply trade time for money. But you need to know how many hours you’re working and where that time goes, to get the full picture of how much money you make.

Do you know how much time you spend on the different tasks in your business? If you offer services, how much time do you spend on each stages of a client project? If you sell products, how much time do you spend making or curating your offers? Don’t forget about the marketing and admin work that keeps new clients coming in the door. While these aren’t things that your clients pay for directly, they’re essential parts of running your business.

You can use a free tool like Harvest to track time and break it into categories and see how much time you spend on different activities. Many of my clients, are apprehensive at the thought of tracking their time so meticulously, but it doesn’t have to be restricting. Think of it as an experiment. There’s no need to judge the time you spend on different tasks, you’re just getting an idea of where the time is going. And you don’t need to track your time forever. Commit to doing this for one week, and I promise you’ll gain amazing insights about your business and how you spend your time.

Also think about how many hours you’d work in an ideal week. Would it be less than you’re working now? You have your NEED and WANT number for your personal income, now calculate your CURRENT and IDEAL weekly working hours.

Crunch the numbers

You have all the info you need to look at your numbers and get an accurate view of where you are now, and where you’d like to be. Here’s a recap of the numbers to keep in mind:

Average monthly revenue in your business
Total of all business expenses
Amount you NEED to cover personal expenses
Amount you WANT to cover ideal personal expenses
CURRENT work hours/week
IDEAL work hours/week

Here’s an example of how to calculate what you’re currently making in your business: Say you’re business brings in $4,000 each month, you have $1,000 in business expenses, and you work 40 hours each week. Subtract the business expenses, and you make $3,000/month, or $750/week. Divide that by 40 hours/week, and you’re making $18.75/hour. If you’re feeling queasy because you just realized you pay your dogsitter more than you pay yourself, don’t panic!

Almost all of my clients are in shock after calculating their hourly pay (and $18.75/hour is high compared to some numbers I’ve seen.) No matter how shockingly low the number is, the good news is that you know where you are now, and can start making a plan to get to where you want to be. Play with these numbers and plug in your ideal salary, and ideal work hours to see what number you get. You’ll start to see how you could get closer to the ideal by raising your prices just a little.

Getting comfortable with these numbers is the first step toward raising your prices and getting closer to the ideal life and business you want.

If the idea of going through your numbers and tracking your hours feels overwhelming and tedious, I want to make it easier.

Many entrepreneurs struggle with facing their numbers and building the confidence to raise their prices. This is something I work on with my clients through my DIY Bookkeeping Program. If you’re ready to take control of your numbers, and work toward a price increase that supports your ideal life and business, I’d love to help you get there through the DIY bookkeeping program.

Schedule a discovery call to learn more about how we can work together!

June 21, 2019

Get Back on Track with Bookkeeping

Even if you’ve been avoiding it for too long.

Bookkeeping is one of those tasks in your business that, while absolutely necessary, isn’t always the biggest priority for many business owners. When there are so many things that need your attention, it’s easy to let bookkeeping fall to the bottom of your to-do list.

But as your business grows, bookkeeping just gets more important. If you’ve been putting off your bookkeeping for a while, you may feel so far behind that you don’t know where to start.

First off, let me tell you that doing your bookkeeping doesn’t have to be scary or overwhelming. I promise that once you start, you’ll feel so much better. I’m sure you’ve heard that bookkeeping is important for tax purposes and in case you ever get audited, but there are so many more benefits to bookkeeping. It helps to understand your numbers so that you know if you’re making a profit, and where you stand financially. It also helps you make financial projections and create a budget for your business.

Bookkeeping helps you to know where you are financially, so that you can get to where you want to be. Click To Tweet

The first step is to get started, and it’s not as complicated as you might think. While you could use a bookkeeping software like QuickBooks Online, you can easily DIY your books with a simple spreadsheet. Read on to get my step-by-step plan for getting back on track with your bookkeeping.

Start with this quarter

If it’s been months, or even years, since you kept good bookkeeping records, the idea of going back and catching up on your bookkeeping backlog is overwhelming. Instead, start with this quarter, and commit to staying on top of your books from now on. You have to start somewhere, and looking at only 3 months worth of books makes it much more manageable.

From there, you can always work backwards, one quarter at a time, to update your books from previous quarters until you’re caught up.

The important thing is to set a starting point, and commit to doing your bookkeeping every month from now on. Click To Tweet

Separate business and personal finances

If your business and personal finances are already separate, great! You’re ahead of the game. If not, it’s time to open a separate bank account and use it exclusively for your business. This is so important for knowing where you stand, and how much money is coming in and out of your business. It also helps to protect you financially if you’re ever audited, or have legal issues in your business.

If you’re not ready to open a business checking account, you can open a second personal account that you only use for your business. The account type doesn’t matter. The KEY is to separate your business and personal finances so that you can clearly see what money is coming in and going out of your business.

Record business income and expenses

Now let’s look at your income and expenses. Start with the first month of this quarter, and download your bank transactions for that month. If you use Quickbooks or another bookkeeping software, you can link your bank feed to download your transactions automatically. If you’re DIY-ing your books, you can login to your online banking and download .csv files for your transactions and copy them into a spreadsheet.

Once you have your business transactions for the month in one place, review each and every transaction. If you’ve been using one bank account for both business and personal use, you’ll first need to categorize each expense as either Business or Personal. Then you can filter out personal expenses, so you’re only looking at your business.

Separate income and expenses into two separate tabs on your spreadsheet, so that you can easily see how much money you spent and how much money you made.

Create Bookkeeping Categories

The next step is categorizing your transactions. You can use whatever categories you want, as long as they make sense to you and you use them consistently. Your expense categories could be things like: Software, Office Supplies, Advertising, etc. These categories will help you see where you may be spending too much money in your business.

If you have multiple revenue streams, you’ll want to categorize your income too. Create a category for each of your different revenue streams so that you can evaluate which revenue streams performed best. As you go through and categorize your transactions, you can also add more specific notes in a separate column that will help you remember what that expense was.

Upload Invoices and Receipts

You’re almost done! The last step is to keep a record of your transactions with invoices and receipts. If you’re using QuickBooks Online, you can attach the invoice or receipt to your transactions, so it’s all in one place. If not, you’ll need to save your sent invoices (income) and receipts (expenses) in two separate folders for each month.

These records help prove your income and expenses if you are ever audited. It only takes a few minutes, and it could save you so much hassle in the future.

Commit

You have the steps to get your bookkeeping back on track, now it’s time to commit to it. The best way to ensure you follow through on doing your bookkeeping every month, is accountability. Tell someone about your commitment, and celebrate when you follow through! Acknowledge yourself for doing the work and committing to getting your bookkeeping on track.

How will you commit to completing your bookkeeping for this quarter?

If you need more support to get back on track with your bookkeeping, I would love to help you! Schedule a discovery call to learn more about how we can work together through my DIY bookkeeping program.

November 13, 2018

What Every Bookkeeper And Accountant Needs To Automate In Their Business

If you want to save time and money, you need to automate. A good, effective automation allows some tasks to happen automatically, improving the customer experience and cutting the cord that has you at your computer all day.

If you want to save time and money, you need to automate Click To Tweet

But automation also takes time and some tech know-how. Sure, you can pay someone to do it for you, but that defeats the “saving money” part of setting them up in the first place.

I recommend starting small and building from there. Automate some of the most essential functions in your business and then add on as you have time. What are those essential automations you need to set up now?

Your Calendar

How often do you exchange emails with a client that look like this:

You: Let’s get together to talk about your monthly bookkeeping. I’m free on Tuesday from 3-5 p.m. and Thursday from 8:30 a.m. to noon. Let me know what works for you.
Client: Great! Unfortunately, I’m not free during those times.
You: Okay, how about Friday between 10 a.m. and 2 p.m.?
Client: I’m heading out early on Friday. That won’t work.
You: Have a nice long weekend! Let me know when you are available.

Then, crickets. Which means you have to follow up with the client and go through the whole process again. It’s frustrating for both you and the client and it’s a colossal waste of time.

Instead, the email exchange should look like this:

You: Let’s get together to talk about your monthly bookkeeping. Here’s a link to my calendar. Find a time that works for you in the next two weeks and I’ll talk to you soon!
Client: <books appointment>

It’s easy, painless and you just saved a few days of bouncing emails back and forth. Plus, quality scheduling software like Calendly will automatically add the appointments to your calendar, send reminders to the client and allow you to set up multiple appointment types.

Email Templates

You’ve probably sent a payment reminder email 100 times to 50 different clients. Or a request for documents–every time you onboard a new client. If you don’t have automated emails that request information from clients or prospective clients, it’s time to build some email templates and automate them.

If you don’t have automated emails that request information from clients or prospective clients, it’s time to automate them. Click To Tweet

Within your client relationship management (CRM) platform, you can create templated emails that are sent out at designated times or after specific milestones in a project. Often, you can also customize these templates for specific types of clients so they never really feel like templates.

Contracts

A lot of business owners rely on DocuSign for contracts, which I believe is an unnecessary expense and a good way for these important documents to get lost. When housed outside your CRM, contracts and other forms tend to get clunky and easy to misplace and add an extra step to save them to your internal client folder. Not only that, but many business owners build new contracts from scratch for every client. I agree that many projects have special stipulations, however, it’s not necessary to start from a blank slate every time.

I recommend creating standard contracts within your CRM, such as 17hats or Dubsado, and customizing those templates as needed and when needed. You can also set up the automation so when the client signs the contract, they automatically receive their invoice or another form.

Setting up these and other automations within my business has saved me so much time. Because I worked in the industry for so long prior to branching out on my own, I knew exactly where to start and how to add new automations and workflows to help my business run even more smoothly.

If you’re struggling with getting your automations set up, I have a workflow template shop that can get you started. The Business Workflow Template Shop has templates and automations for those in the bookkeeping and accounting industry as well as other small business owners. Check it out today and start saving yourself some time! And if you need some help getting started, check out my Case Study for the Solopreneur and watch my free webinars on creating your own step-by-step Lead or Onboarding workflow.

September 18, 2018

How To Borrow From Other Business Owners

How To Borrow From Other Business Owners Every expert starts somewhere. Whether it’s the doctor who first practiced on her dolls as a child or the barista who started out on his play kitchen, there’s always a first step in any passion or career.

The same goes for us in the bookkeeping and accounting industry. Some of us went to school to get a degree or certification in the field while others relied on our on-the-job training and research skills. However you got started, you learned it from somewhere.

I’ll bet money that everyone had a mentor, someone who had been there and done that to help show them the ropes in the early years. If you’re dedicated to growth over the life of your business, you’re still learning from someone–even a decade or more later.

There’s no shame in using someone else’s lessons to help you avoid costly mistakes in your own business. Case in point: Using someone else’s processes and systems to make the next stage in your business that much easier.

Using someone else’s processes and systems can make the next stage in your business that much easier Click To Tweet

I’m not suggesting that you stalk and steal from another accountant or bookkeeper. Quite the opposite. What I am suggesting is that you find the experts who you respect and find ways to work with (or for) them.

In addition to my 20 years of bookkeeping training, I learned the craft of business ownership from a dedicated mentor who I took a class from. Since then, I’ve always had another industry professional in my back pocket to bounce ideas off of and to turn to when I had questions. Candidly, I still do.

The proverb, two brains are better than one, couldn’t be more true. It’s because of my connections and mentors in my industry that I’m where I’m at right now in my business.

Sure, I believe that we need to stay in our own lanes and make sure that we’re doing our own thing in business. But that doesn’t mean we can’t (or shouldn’t) consult Google Maps to help us along the way.

Stay in your own lane, but it’s okay to consult Google Maps to help you along the way in business. Click To Tweet

That’s why I developed the Business Workflow Template Shop. Because I’ve learned so much and want to pass that information along to other business owners and industry professionals. We need to support one another as we grow our businesses and help out where we can.

Are you ready to get your workflows and systems in order? The Template Shop is exactly what you need to do just that–and it’s all ready for you! Check it out today!