Start your new year off right

I don’t think there are many people who were sad to see 2020 go. 2021 is a fresh new year and the perfect time for getting organized. It seems I’m always talking about organization. There is no substitute for good organization. The earlier in the year you put good recordkeeping practices in place, the less there is to do at the end of the year. Here at TomKat Business Solutions we are ready and able to help you start 2021 on the right foot.

One of the important first things is a chart of accounts that is right for your business. It is the foundation of good recordkeeping. There are “canned” charts of accounts for many types of businesses but that is only the start. Your business has things that are specific to you. They may have accounts you don’t need or not have accounts you do need. We ask you about your business and use our experience to make recommendations on what chart of accounts would serve you well. Once this is in place, the revenue you generate and the expenses you incur to generate that income, all become correctly reported on your financial statements and eventually on your taxes. You will be able to distinguish expenses directly related to your cost of goods sold differ from the cost of operating your business. There are benchmarks for many businesses that can be used to see how your business is doing in relation to other similar businesses. Here at TomKat Business Solutions we can help you utilize the information gleened from your financial statements to become a management tool and enhance your business decision making process.

Kathleen

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How TomKat can make a difference

Organization and accuracy are two primary reasons to utilize our services.

Organization comes in many forms, from sorting receipts into categories to a well organized chart of accounts that sends data to the best categories for meaningful financial statements, which become a management tool. One area that provides satisfaction is not-for-profits that have had many willing volunteers. Often the chart of accounts becomes too granular and disorganized. Combining accounts where applicable, and separating administrative costs from operating costs provides a better picture of the financial activity. But it all starts with organization.

The benefits of accuracy in recordkeeping are to keep your books in balance and to be sure the best information available goes to your CPA or tax preparer. We will be asking lots of questions because we want to get it right. Those records also provide you with information that will help you to reach your targets, and insights to make better decisions. Organization and accuracy throughout the year can help you meet bank covenants, achieve on-time tax deposits and
give you peace of mind by knowing you have a handle on your operation.

There are various ways to achieve these goals and we can help you to decide what works best for you, helping you to spend less time recordkeeping and more time pursuing your passion. If you decide to choose QuickBooks, as a QuickBooks Online Certified ProAdvisor I can help you get QuickBooks Online or Desktop set up in a manner that is best for your particular type of business or not for profit organization. Part of the certification process includes knowledge to point out the best fit (again, I’ll be asking lots of questions), get you up and running, recommend best practice workflows and train you. If you have a question I cannot readily answer I will get back to you with the answer, because I have the entire QuickBooks support network available to me.

Kathleen

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The Dreaded B Word

Budget. How many times, in the life of your business or organization (or for that matter, in the business or organization of your life!), have you heard that word and cringed? When have you actually smiled when you said “wow, it’s time to revisit our budget” or “let’s see how well we’re performing against our budget so far this year”? For that matter, when you opened this blog, was your first instinct to close it?

In my long experience, the simple fact is that people look at budgets – whether personal or in their company – in one of two ways: as a high bar they MUST clear (revenue), or as a cliff-edge over which they MUST NOT venture (expenses). It is one of the most common benchmarks by which supervisors and managers are evaluated: “did your sales team meet its quota this month?”, or “did you go over your department’s expense budget (and by the way, what’s up with those office supplies)?”

As with most of life, there is bad news and good news here. Let me re-phrase that: there are ineffective (bad) ways to use a budget, and there are effective (good) ways to use one. Most people only think of the bad ways, often with evidence to back up their thinking. “I couldn’t make my sales number, so I lost my job.” “I couldn’t keep my department’s expenses in check, so I was demoted.” “The bottom line didn’t meet our lender’s expectations, so they bailed on us.” All these things can and do happen. But for the business or organization itself, I am going to suggest there are two words that are mission-critical not only to the success and usefulness of a budget, but to the entire Team’s perception of it. Those two words are:

Flexibility and Communication.

A budget is more than a model; it is, in effect, a prediction of the future. As such, it is, shall we say, imperfect? Have you ever lost a bet on a Super Bowl, or watched your favorite stock sink into the abyss? More to the point: how many of you at this time last year, as you started planning for 2020, saw a world-wide, economically-crippling pandemic on the horizon? I most certainly did not. I’ve had to re-chart my whole life in 2020, like almost everyone I know. My income and expenses have changed; I’ve had to become Flexible. And you’ve probably had to do the same thing. A budget must be a living, breathing, evolving thing – it must be Flexible – for the simple reason that outside events usually control us more than we control them. Yeah, I don’t like that, either…

And a living, breathing, evolving, Flexible budget needs something else, too: it must be supported by Communication. Communication flowing both ways, on a variety of levels and for a variety of reasons. Perhaps the most important reason (at least from my perspective) is to make sure the whole Team understands the essence of a budget. Yes, it is a measuring stick, but it is also a chart of your progress, a map of your journey. And when, for whatever reason, it is not serving your organization, members from all levels need to Communicate, to be heard – because the budget needs to serve the business, not the other way around.

Sit down with Kathie and me. Allow me to tell you about the multi-year budget / cash flow model I created for my “dream job”, how senior management enrolled in the vision it presented, and how it served that business in its growth and acquisition. Let us give you the full spectrum of how we can take some of the load off your shoulders, and how our Mission Statement can become an active part of yours. We are here to help, and we stand ready to serve you. Thanks for reading!

Tom Bracken

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