If you are a freelancer or solo practitioner for whom your income is solely based on your product or service, then you are a full-time business owner. Whether your company has one, five, or fifty employees, the primary focus is profit, and profit equals income minus expenses. This is a good time to evaluate your income and expenses for the just completed 1st calendar quarter of the year and adjust as necessary. If you have been keeping your financial records up-to-date in your small business accounting application, then you can quickly and easily run the profit and loss reports you’ll need for your business evaluation.
Reviewing Your Income and Expenses
- What were your income goals for the 1st quarter? Did you reach your goals? Did you HAVE goals? Your reports will help you to analyze your income streams and reveal any necessary changes you need to make to bring in more income and to collect any delinquent accounts receivable.
- What were your expenses for the 1st quarter? Which expenses are fixed (rent, insurance, loan payments, etc.), and which expenses are variable or flexible (salaries, utilities, reimbursable costs, supplies, etc.)? Where can you reduce expenses?
- Did the amount of estimated taxes you paid match or nearly match your expectations? A good general rule of thumb for self-employed persons is to save 20-25% of every income payment received for your quarterly estimated tax payments; that way, you won’t be overwhelmed by your eventual end-of-the-year tax bill. Your financial reports will show you if the past percentages you saved were too much or not enough. Your accountant can advise you on any relevant changes to the tax laws that impact your calculations.
Time flies when you’re having fun with the day-to-day responsibilities of running your business, but the time spent in reviewing and analyzing your financial records and reports for the 1st quarter will help you to plan for an even more profitable 2nd quarter. April is a great time to do your 2nd quarter planning—spring forward with your business!
With Kashoo Small Business Accounting, you and your accountant can access your records at any time from anywhere there is Internet access. You can both work with your Kashoo reports in real time simultaneously—saving you time and money.
Kashoo Inc. (https://kashoo.com) develops easy-to-use accounting and bookkeeping software for small business owners around the world. Check out the company’s iPad app, ideal for entrepreneurs on the move. Founded in 2008, Kashoo is located in Vancouver, Canada. For more information about Kashoo, visit https://kashoo.com.