How to Get Your Small Business Financials Organized

Bookkeeping, Business Finance, Heart centered | 0 comments

Let me guess … you started your business because you LOVE financial and operational tasks! 


Chances are, you started your business because you have a passion for serving and a message to share, not because you love accounting and finances!

And from the outside, everything looks great!  But sometimes entrepreneurs mistake a positive bank account for profit.  And that balance can be deceiving. 

When times are good, you may not notice the hidden dangers that can harm you when slow times come up.  And they will!  No business growth curve is always up.

So, let’s set up a solid plan for your business finances!

Step one:  keep separate business accounts

keep separate accounts for your business

Entrepreneurs are passionate and excited to get to work!  That is why many start their businesses without systems in place for financial management. 

But if you want to start out on the right foot, one of the first things you need to do as a new business owner is open up separate accounts for all of your business expenses. 

Then you can transfer a specific amount of dollars to your business account, to fund your start-up costs.  This keeps you from constantly feeding your business with your personal finances. 

How much should you transfer over? Great question!  Let’s talk about that!  Every business situation is different and what works for one entrepreneur may not work for another.

But sometimes, we still end up using our personal account for our business expenses. That is why we love Xero and offer it as part of our services.  Xero is a cloud accounting system that tracks expenses and manages reimbursements for you.

The IRS requires all businesses to show a profit for three out of five years.

Take action:  open up a business account and set up a cloud accounting system.

Step two:  create a financial plan

Creating a financial plan is as easy as knowing how much money you need to deliver your services, and how much you need to grow. 

First, let’s take a look at what you need

What monthly expenses do you absolutely need to deliver for your clients?  Be real here, but remember, we’re looking at what you NEED RIGHT NOW.  We’ll cover your wants in a few.

These could be things like inventory, online content, a domain or ecommerce platform to offer your products or services.  Take a moment and list them all out, including how much they cost on a monthly basis.  Don’t forget to include salaries, office supplies and taxes.

Add these NEED NOW expenses all up.  

Now let’s look at things you WANT NOW to create an ideal experience for your customers or community. 

This might be things like a beautiful workbook or a CRM to keep track of things so you can deliver a personalized marketing strategy. Or maybe it’s an advertising budget to get the word out about your offering. Take a moment and list them all out, including how much they cost on a monthly basis.

Look at these two numbers – this is the range of sales you need to make your business model work.  Can you deliver your products or services in this range? I bet you can! 

If not, this needs to be your first financial goal. 

Until you can hit the NEED NOW amount consistently, it’s time to get real about what you can do RIGHT NOW and move some expenses to NEED LATER.

How to figure out the range of sales you need, to cover your business needs.

 Now let’s look into the future a bit

What expenses will you need down the road to really show up for your clients or community?  

For example, maybe you deliver your course via a private YouTube channel right now, but down the road you know you will need to invest in a learning management platform to create a better customer experience. Or maybe as you scale, the software you use increases the cost as you increase users. 

Make sure you know what scaling will do to your NEED expenses. This NEED LATER number can get you in trouble from a cash perspective if you aren’t paying attention as you scale.

Now it’s time to dream again a little.  Ask yourself,  “If my business was thriving, I would love to…”

List out everything you will WANT LATER and add up those costs. 

Maybe you’d love to send an elevated welcome gift to your clients. What are the few things that would really create a meaningful experience for your community or REALLY lighten your workload? 

A virtual assistant? Bookkeeper? New software?  You’ll want to prioritize this list since the sky really is the limit here.

Now take a look at both of your LATER  numbers.  This is the revenue range you need to be in to take things to the next level.  

How to figure out the additional revenue you need to grow.

Sometimes it’s hard to wait while you scale, but, if you are consistently hitting the higher dollar amount, month after month, then you can start looking at making some of those purchases or build up some profit to take as the business owner! 

This is where it gets good! A thriving business where you can choose to invest personally or back into the business. Everyone loves choices!! 

Take action:  add up all of your now and later expenses, including items you wish you could afford.  Set your financial goal based on where your business currently stands.

Step three:  work with an accounting partner

Setting goals is the easy part; keeping them is hard, things can get wild as you focus on community and content so bringing on a financial partner can help keep you informed on a regular basis.

Look for a partner who is an expert in your industry or is willing to learn your business; someone that has been in a similar business model and knows some of the pitfalls hiding in “good deals” and the next best idea. Then, listen to them!!

At TK Solutions, we can help you set up a budget based on where you want to be AND help you stick to it, with real time info. and strategy sessions to talk through ideas as they arise.

We dig into the details of your business to fully understand how you operate, how you make and spend money, and why you are so passionate about your business!

We can get the systems in place that you need so that you can better track your income and expenses.  You’ll have a better picture of what you spend and why.  And we’ll work together to create your revenue goals, complete with the systems and processes to get you there!

Book a call today!  You can get actionable steps to those looming financial decisions you’ve been avoiding and get back to the work you really love.

If you are looking for more guidance but aren’t ready to take on a financial planning partner just yet, then be sure to read Profit First by Mike Michalowicz. 

This book has some good bones to determine a baseline of making sure your business is serving your life while you serve your audience.

Take action:  book a call with us today!

Step four:  use the ‘trust, but verify’ philosophy

trust but verify

People make mistakes.  And many entrepreneurs are heart-centered, naturally trusting people. 

Your accounting team should review the profitability of projects and make sure vendor’s agreements are being honored.  

There is nothing worse than assuming a profit on a project, only to find out your vendor raised its prices and it didn’t get caught until after the bill was paid, or, worse yet, at the end of the year when you are filing taxes and what you thought was profit was eaten up in avoidable mistakes that could have been addressed earlier. 

You should have access to everything in your business, even if you don’t regularly use it.  Make sure your accounting team also has access.  You should be able to see what they see, and they should have access to what they need, to do a good job for you. 

Take action:  be sure you have access to every tool, program and platform used in your business.

Step five:  ‘Close the loop’

It’s important to circle back after each project and review how it went.  Did you achieve your objectives? 

Run through a post-implementation checklist.  Your team will benefit from discussing what went right and what went wrong.  This process ensures you learn from real information in your business, making it stronger.

Then tweak what you are currently working on and set up better systems and processes for future projects. 

Take action:  meet as a team to review each project and use that data to reshape current and new projects.

Wrapping it all up

When organizing your business financials, the hardest part is just getting started.  If you are feeling overwhelmed, book a call with us.  We can help you get your financials organized and back on track.  Our job is to lighten your load so that you can focus on the work you love!



Tana Kramer brings 20 years of experience taking small companies to and through their next level. She loves getting to dig into a business, figure out how it operates in the most efficient and profitable way. Tana is committed to answering the financial questions you need to set your business up to succeed.

In her downtime, Tana is typically doing yoga, drinking coffee on her patio or in and out of high schools across Austin, TX supporting her family's basketball obsession. On a sunny day, the family is most likely poolside or boating on Lake Travis.