Uncategorized Archives - Amy Northard, CPA - The Accountant for Creatives

5 Big Misconceptions About Your Business Finances

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Running your own creative small business is no small feat. You might be a one person show or have a small team of people, but either way, all-of-the-things are your responsibility. And getting it all right is impossible. Oh, you didn’t know? No one has all-the-things figured out. It’s true. Each and every one of us have our own set of strengths and weaknesses, things we love to do and things we don’t, areas of business that come naturally and ones that we have to work really hard at. That’s why we’ve got to be in this together!

5 Big Misconceptions About Your Business Finances. Sign up for the free webinar here: http://bit.ly/hotmesstosuccessworkshopThis is why I’m so happy I crossed paths with Brittany Griggs of Simply for Creatives.We both work with clients on the financial part of their business but our strengths and specialties are very different. While I’m a CPA (Certified Public Accountant) and focus on taxes and bookkeeping, Brittany is your lady when it comes to pricing, profit, and understanding what your numbers mean for your business. Together, we geek out over business numbers, excel spreadsheets, budgeting and bookkeeping. There aren’t too many of us that enjoy that kind of convo over a virtual coffee date. And we totally understand you, as a creative small business owner, would rather sit through a documentary in a foreign language than to talk about those things.

Which is why we’re teaming up to help set the record straight on the 5 biggest misconceptions we hear from our clients. Make sure you read all the way to the end for the best part. (Not-so-subtle-hint: we’re having a free workshop next Tuesday!) Our goal is to help give you clarity if you’re struggling in this area of your business. We want you to move forward with the right information and confidence. So here goes!

5 BIG MISCONCEPTIONS ABOUT YOUR BUSINESS FINANCES

1. Owing money at tax time is a bad thing or your CPA’s fault.

The Truth – When you owe money at tax time, that means your business generated a profit and a profit means your sales were higher than your expenses. A lot of business owners I talk to want to spend all their profit on equipment or other not-so-necessary expenses before the year-end so they don’t owe any tax. The problem with this thinking is that people end up forgetting why they went into business in the first place! You didn’t work all those long hours just to end up being no better off financially than you were at the beginning of the year, did you?

Let’s start to think about owing tax in a different way. Set aside funds throughout the year to pay in each quarter or just have ready when you file your annual taxes. This will make the year-end payment a little easier to handle and will help you fight the urge to spend away the profits on things you may not need.

2. You only need a budget when money is tight.

The Truth – A budget isn’t something you use or put in place when you’re just getting started or when money is tight. A budget is giving your money a purpose and plan. It doesn’t matter if you’re barely making the bills or bringing in $1 million a year. If you don’t put a budget in place for your money, you can easily overspend causing financial hardships in your business and personal life.

Brittany recommends setting an overall budget for the year then breaking that down by month. You should reevaluate your budget, at the very least, every month to make sure you’re on track or if you need to make some adjustments. A business bringing in $30,000 a month can just as easily be in jeopardy from mismanaged funds as one bringing in $5,000. It’s all about your budget and diligence to follow it.

3. Sales tax and Income tax are the same thing.

The Truth – These two taxes are easy to get mixed up, but they have a few distinctions to help you keep them separate in your mind. Let’s start with sales tax. This is a tax that your state manages and is assessed to your customers (not you) on taxable products and services (check with your state to see what qualifies). As the business owner, you are simply the collector of the tax. You’ll hold on to it until your sales tax return is due and then you’ll pay it in to your state.

Income tax is a tax you pay on the federal and state level, with the exception of the few states who don’t have an income tax. They are collecting tax from you, the business owner, based on how much income you made for the year.

4. You need a business degree to be good at business and understand your finances.

The Truth – This is so far from the truth, it hurts. Sure, it helps but, at the same time, everything is learnable. Neither Brittany or I were born with an a business degree. In fact, most of Brittany’s formal education was in the Corporate Finance space, not for small businesses. She learned most of that from experience starting and growing her photography studio. Our secret weapon is learning from those who’ve done it before us then putting our own spin on things.

None of us know everything so it’s important to invest time and money into education for the parts of business that are the most difficult for you. You don’t need to be an expert to be the kind of business owner you need to be. You just need the right information, skills, resources, and tools for your business. And that’s one of the reasons we put together the LIVE free workshop next Tuesday, so don’t miss it!

5. My business isn’t big enough to worry about setting up a bookkeeping system.

The TruthEven if you just have one client right now, putting a bookkeeping system into place is important. It doesn’t have to be a fancy program and in fact, a well-structured Excel spreadsheet will serve most businesses just fine. When you get into the habit of recording your income and expenses on a regular basis, it sets you up for success later on in your business when you have more transactions. If you put this off until your business is booming, you won’t have much time to spend on figuring out the best bookkeeping process for your business. Then you’ll likely put off your bookkeeping until your taxes are due, which can be very stressful.

TAKE YOUR BUSINESS FINANCES FROM HOT MESS TO BIG SUCCESS! {FREE Live Workshop}

We hope setting the record straight on these 5 misconceptions help give you clarity in your creative business. We know how confusing the financial piece can be and want to help you change the way you see and do your numbers in a simple way. Which is why Brittany and I are joining forces to bring you a jam packed hour for the ultimate free LIVE Workshop next Tuesday, June 28 at 11:00am Pacific | 2:00pm Eastern (You can register here).

WHAT YOU’LL LEARN

• 2 simple steps to get your business finances started on the right track.
• How to create simple systems to streamline tracking your income and expenses without the headaches.
• What you need to know about taxes to rock your business and what to leave to the pros.
• How to determine if your products and services are really priced for a profitable business.
• Live Q&AFree Workshop with Amy Northard and Brittany Griggs

Let us help you take the stress and mess out of your business finances so you can get back to what you love doing the most!

The “Why” behind Be Your Own CFO

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New Years Promo Ad

As you may have seen in my mailing list and on social media, I’ve created a course called Be Your Own CFO. The idea for this course started back a few years ago when I was going to host an in-person class covering much of the same information. That in-person class never panned out, so all of my content sat in outline form, waiting to be made into its current format.

Because of my line of business, I’ve talked to hundreds of creative small business owners and heard many of the same questions over and over. This really pushed me to create a resource for business owners so they could feel empowered in their business and not held back by taxes and bookkeeping.

This past summer was my first 100% self-employed summer and the extra time available allowed me to finally put the work in to creating the resource. That extra time, coupled with my husband’s month off of MBA courses (he’s my web designer/developer) pushed me to stop saying “some day” to the course and get it finished and out into the world.

After seeing a student post that the course was the best investment she’s made in her 7 years of business, I know I’m on the right track and am excited to continue sharing it and spreading the word so that taxes and bookkeeping aren’t stressing people out.

If you’d like to learn more about Be Your Own CFO, click here.

As a celebration of the New Year and wanting to get this info out to as many people as possible, I’m giving you $75 off the price through this Thursday, January 7th at 10pm ET (my bedtime). Use code NEWYEAR16 at checkout.

And as a bonus, I’m sending a fun gift to the first 30 people who sign up by Thursday!

Creativepreneur Gift Guide

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entrepreneur gift guideI created this gift guide for creative entrepreneurs aka creativepreneurs because I LOVE OFFICE SUPPLIES. You may have noticed over on my Instagram that I have a thing for pretty calculators, so I’ve linked a few that are on my wishlist.

The paper shredder is the same one I use to discard sensitive financial documents. It not only cuts the paper into strips, it cuts those strips into pieces, too. It’s not the prettiest, but it works SO well.

My mom has a tradition of getting me a Rifle Paper Co calendar for Christmas every year. When I change the month over, that’s my cue to get my bookkeeping done!

No office is complete without a pretty notebook. I like to have one around for my daily to-do’s and to keep tabs of my goals (financial and business).

The last item on the list is a portable Neat receipt and document scanner. If you have a lot of paper around your office (receipts, invoices, etc.) this will be a lifesaver. It will quickly scan the document and can extract information to create helpful reports. I haven’t used this yet, but it’s on my Christmas wish list.

[1] Lilly Pulitzer Calculator

[2] AmazonBasics 17-Sheet Paper Shredder

[3] Rifle Paper Co Wall Calendar

[4] InterDesign Trash Can

[5] Bamboo Calculator

[6] Ban.do Spiral Notebook

[7] NeatReceipts Mobile Scanner

 

Amy Northard, CPA LLC is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.
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