1. Financing
If your business has loans, make sure you split these payments when they come through the bank feed.
What do I mean?
A $790 payment to GMC for a truck loan should not all be booked to the GMC Truck Loan account. It should be split, between the principal portion of the loan (how much you borrowed) and the interest portion (the cost of borrowing). Interest is tax deductible, the principal payments are not.
How do I find the amounts?
Check the loan statement!
2. Flow
Cash flow is so important to business operations. A P&L showing net income of $30k is great, but it does not necessarily mean you have $30k in cash sitting in the bank account.
Understanding your cash flow relative to upcoming costs is one of the key traits we see in successful business owners who have trusted us with their books.
Understanding, however, doesn’t always translate to you actually having the cash. Even if cash is tight, we can understand your cash needs and find creative solutions through our trusted partners and vendors to ensure you make payroll next week.
3. Focus
Do not let the bigger picture get away from you.
When asking for advice, a mentor told me it is not about deciding if we should turn left or right, but deciding how we get to California. In other words, do not lose sight of the ultimate goal of creating a sustainable, value-providing, cash-flowing business that runs itself.
It is easy to get consumed in the day to day operations and lose sight of this goal. Losing sight of the goal may translate into discarding SOP improvements, not investing enough time in training our team, treating tasks as tasks and not as opportunities to improve our business processes.
Sometimes, as business owners, we just need a little extra motivation every once in a while to remember we are all trying to get to California.
Until next week
