This month, we are super excited to welcome Julie Callahan, the “Aussie Bookkeeper” to the blog. Julie is passionate about helping entrepreneurs eliminate financial stress and frustration in their business.
I had the privilege of meeting with Julie pre-COVID through a women’s networking event, and we immediately clicked. Not only does she have the best accent, she knows her stuff and has a heart of gold. In today’s post, she lays an important foundation for your business’s financial health. She challenges you to think about where your money is going and what to factor in as you think about making the leap into entrepreneurship.
Whether you’re a seasoned business owner or just starting out, you’ll find this information to be an important reminder or solidly important on your business financial journey.
You have been thinking about pursuing your dream of doing what you love and becoming an entrepreneur. But where do you start? To be able to make the transition from your current job into your own space you need to have sufficient funds and a plan.
Set up Costs (Money you will need to outlay before you even open your doors)
- Lawyer Fee (to review the contracts that you will give to your clients and your insurance coverage to make sure you have the right type of insurance
- Accountant – how should you structure your business to protect your personal assets and what local, state and federal agencies do you need file documents/register your new business
- Licenses and fees (registering a business /forming a company)
- Course on how to run a business
- Office Space (home office or coworking space)
- Office Supplies
- Marketing Costs
- Website Design and Maintenance
- Social Media
- Print or Online Media Advertising
Monthly Costs (work on having enough saved/loan to cover your expenses for 6 months)
- Dues & Subscriptions
Apply for an EIN (Employee Identification Number – even if you do not have any employees)
Set up 2 Business Bank accounts
- Checking for all income to be deposited into and any business expenses paid out of
- Savings (taxes)
Apply for a credit card that is used ONLY for business expense
KEEP YOUR BUSINESS EXPENSES COMPLETELY SEPARATE FROM YOUR PERSONAL EXPENSES.
Invest in technology to streamline your bookkeeping process – for as little as $1 a day, you can invest in an accounting system that will download transactions directly from your bank/credit card account, enable you to invoice clients and track outstanding invoices and be paid from your invoice, keep track of money you owe people, pay employees/yourself allow you to digitize and attach receipts. This saves time, improves cash flow, improves accuracy, provides real time information and allows everything to be stored securely in the one place.
Invest money in customizing you accounts Setting up your accounts correctly will enable you to be able to run reports that provide information that will help you make better decisions. Automate your invoicing and set it up so you can be paid online which will improve your cash flow and enable you to keep track of who still owes you. Add bills so that you know what expenses are upcoming and pay them as close to the due date to help with cashflow.
Should I do it myself or hire a bookkeeper?
You have set up your business because you LOVE what you do, you are great at what you do and it makes you feel invigorated and happy. If sitting down each week or month to enter the information to update your books makes you nauseous, why not free up that time, frustration and worry by giving that task to someone else (who loves that type of work). You may say to yourself “I cannot afford a bookkeeper” but the more important question is, “What is my time worth?” The time you take updating your books could be time spent making more calls to get more sales, working on a new program that will generate more income, marketing, spending time with family or getting outside to exercise.
Get Help from the right person
When looking for someone to customize your accounts or take over your books on a more permanent basis, look for someone who:
- will spend time to find out what information you are looking to obtain from your accounting system, so they can set up your chart of accounts (categories) that will provide relevant data to help you make informed business decisions – even if you have you system set up, have it reviewed so you can fine tune it
- will provide training and offer ongoing support if you are doing the books yourself.
- you like – if you are afraid to contact your accountant/bookkeeper and dread talking to them as they are abrupt and almost rude, find someone else…
- will update your books on a weekly basis – the more current your books are the easier it is to track how your business is performing and to make adjustments (reduce expenses, increase the price of your program or focus on more sales).
- will keep you accountable – follow up with you, provide support on an ongoing basis, is responsible and available to answer questions
Create a cash flow statement – Reports can be downloaded from your accounting system to give you a template to create this statement. Cashflow forecasting will enable you to see when money is coming in and when expenses have to be paid so you can plan to have enough money to pay your expenses.
Create a budget – This is your roadmap and essential tool to help you reach your Monthly, Quarterly or Yearly goal. Without a budget reaching how do you know what sales you need to reach and expenses you need to keep in check so you can achieve the amount you want to see in your bank account each month.
Commit to keeping your books up to date – For any plan to work you need to commit to it. If you find you no longer have the time to update your books or dread sitting down to do it at the end of a week, hire a bookkeeper. You have set up your business because you LOVE what you, you are great at what you do and it makes you feel great, invigorated and happy. If sitting down each week or month to enter the information to update your books and then run reports to look at how you track against your budget makes you nauseous, why not free up that time, frustration and worry by giving that task to someone else (who loves that type of work) and spend that extra time getting more sales or spending time with family.
It’s easy to get overwhelmed by the all the financial aspects of your business, but taking the time from the beginning to set yourself up for success will save you time, energy, stress, and money down the road.
Julie Callahan is the CEO of Callahan Accounting and Bookkeeping Services and is known as the “Aussie Bookkeeper.” She earned a Bachelor of Commerce (majoring in Accounting and Economics) from the Australian National University before moving to the United States in 1995. After working for a diverse number of companies, including small accounting firms, graphic designers, non-profits, real estate companies, an oil company and an advertising company, she started her own Accounting and Bookkeeping business in 2017.
Her passion is to work with entrepreneurs to eliminate the stress and frustration of organizing and keeping their books up to date. She uses cloud-based technology to streamline and automate the accounting process and help new business owners know their numbers – not be a numbers person, but understand what numbers are important to know as a business owner.
Personally, she loves to ski in the winter, hike in the summer and spending time outside, rejuvenates her spirit. She is married and has two wonderful kids.