Are You Ready for an IRS Audit? (Spoiler: Probably Not)

Let’s get real for a second: no one, and I mean NO ONE, wakes up excited for an IRS audit. The phrase itself is enough to make even the most seasoned small business owner break out in a cold sweat.

But here’s the kicker: most audits don’t happen by accident. There are specific IRS audit triggers for small businesses that can land you in the hot seat.

So, let’s break down what those triggers are, how to avoid them, and how to keep the IRS from sending you a love letter you really, really don’t want.

🚩 The Top IRS Audit Triggers for Small Businesses

1️⃣ High Deductions Relative to Income

If your business claims big deductions but reports low income, the IRS starts raising eyebrows. For example, if you’re a freelance writer claiming $40,000 in deductions against $45,000 in income, that’s going to look fishy.

Tip: Keep receipts, document everything, and make sure your deductions are legit.

2️⃣ Home Office Deductions (Done Wrong)

Yes, you can deduct a home office - but only if it’s used exclusively and regularly for business. If your “home office” is actually the kitchen table you also use for dinner, taxes, and the occasional pizza night, the IRS might not be impressed.

Tip: Measure the square footage, take photos of your space, and don’t stretch the rules.

3️⃣ Big Jumps in Income or Expenses

A sudden spike in income or a dramatic increase in deductions can trigger a red flag. The IRS loves consistency, so when your numbers look wildly different from one year to the next, they might come knocking.

Tip: Be ready to explain. If your income doubled because you finally raised your rates (yay you!), have your records and documentation ready.

4️⃣ Cash-Heavy Businesses

Got a business where most transactions happen in cash - like restaurants, salons, or retail shops? The IRS knows cash is harder to track and more prone to, let’s say, creative accounting.

Tip: Report all income. The IRS has ways of estimating what you should be making based on your industry. Don’t get cute.

5️⃣ Filing Late or Not at All

If you’re consistently late with your filings, or worse, skipping them entirely - you’re asking for attention from the IRS. And not the good kind.

Tip: File on time. Set calendar reminders, hire a tax pro, do whatever it takes.

6️⃣ Claiming 100% Business Use for a Vehicle

The IRS knows that most small business owners don’t really use their car 100% for business (unless you’re a delivery driver or ride-share driver). Claiming the full deduction without solid records is a classic audit trigger.

Tip: Keep a mileage log. Be honest about how much of your driving is actually for business.

7️⃣ Excessive Meal and Entertainment Deductions

Yes, you can deduct business meals, but don’t try to write off every single latte and croissant you grab at the café. If your meal expenses are unusually high for your business type, the IRS will take notice.

Tip: Only deduct meals that are actually for business purposes, and keep a record of who you dined with and why.

😬 The Real Cost of an Audit

Even if you’re squeaky clean, an audit takes time, energy, and a ton of stress. If the IRS finds errors, you could face:
❌ Back taxes
❌ Penalties
❌ Interest
❌ A serious headache

The best defense? Stay prepared.

🧠 How to Audit-Proof Your Business

✅ Keep detailed records and receipts
✅ Track income and expenses accurately
✅ Don’t inflate deductions
✅ Be realistic with claims like home office and vehicle use
✅ File on time, every time
✅ Work with a tax pro or bookkeeper (hi there 👋)

🏁 Final Thoughts

Are you really ready for an IRS audit? Spoiler: probably not. But you can be if you take steps now to avoid the most common IRS audit triggers for small businesses.

Stay honest, stay organized, and stay ready - because the IRS doesn’t play around.

👉 Want more small business tax tips, finance hacks, and the occasional laugh to make it all a little less painful? Subscribe to Tea on the Ledger, your go-to for practical advice and a side of humor to keep your business running strong.

Let’s keep the IRS happy, and you out of the hot seat! 🌿

The Truth About LLCs: What No One Tells You About Your Money

So, you’re thinking about forming an LLC. You heard it’s the way to save on taxes, protect your personal assets, and maybe sound a little more impressive at networking events.

But here’s the thing: there’s a lot about LLC tax benefits and pitfalls that no one tells you. And if you’re not careful, your shiny new LLC could end up costing you more than it saves.

Let’s cut through the noise, bust the myths, and get real about what an LLC actually means for your money.

🎉 The Good News: LLC Tax Benefits

Let’s start with the perks - because yes, there are some great reasons to form an LLC:

✅ Limited Liability Protection
Your personal assets (house, car, pet lizard) are shielded from business debts and lawsuits.

✅ Pass-Through Taxation
By default, an LLC doesn’t pay federal income tax itself. Instead, profits “pass through” to you, the owner, and you pay taxes on your personal return.

✅ Flexibility in Tax Treatment
Want to be taxed as a sole proprietor, partnership, or an S Corp? The LLC lets you choose how you want to be taxed (more on that in a sec).

✅ Business Credibility
An LLC makes your side hustle sound fancy. Clients might take you more seriously when your invoice says “XYZ Consulting, LLC” instead of just “Bob.”

😬 The Not-So-Fun Stuff: LLC Tax Pitfalls

Now for the part no one puts on the brochure:

❌ Self-Employment Tax Surprise
By default, all your LLC profits are subject to 15.3% self-employment tax (Social Security + Medicare). That can sting when you see your tax bill.

❌ No Tax Savings Magic by Default
Forming an LLC doesn’t automatically lower your taxes. You might still pay the same as you would as a sole proprietor unless you elect S Corp status (and even then, there are pros and cons).

❌ Annual Fees and Compliance Costs
In California, for example, LLCs pay an $800 annual franchise tax - whether you make a dollar or a million. Fun, right? Plus, you have to file extra forms, keep proper records, and maybe pay a registered agent.

❌ The S Corp Trap
You heard that S Corps can save you money on self-employment tax? True. But switching too soon, or too late: can backfire. It’s a Goldilocks situation - you need just the right timing and income level to make it work.

🤯 The Big Myth: “An LLC Will Save You Tons in Taxes”

Here’s the truth: an LLC is a legal structure, not a magical tax-saving unicorn.

The tax benefits come from how you use the LLC, not just having the letters on your business card.

🧠 Should You Form an LLC?

Here’s a quick cheat sheet:
✅ Want to protect your personal assets? LLC = good idea
✅ Earning more than $50k–$70k in profit? Talk to a tax pro about S Corp election
✅ Want to sound more official? An LLC helps
✅ Hoping an LLC alone will slash your tax bill? Sorry, it won’t

📊 LLC Tax Benefits and Pitfalls in a Nutshell

✅ Benefits: Asset protection, pass-through taxation, flexibility, credibility
❌ Pitfalls: Self-employment tax, annual fees, compliance headaches, no automatic tax savings

🏁 Final Thoughts

Forming an LLC is like getting a fancy new toolbox: it’s only helpful if you know how to use it. If you think an LLC will magically save you money, you might be disappointed. But if you use it strategically paired with smart tax planning and maybe an S Corp election - it can be a powerful tool for your business.

So, what’s the takeaway?
✅ Get the facts
✅ Understand the pros and cons
✅ Talk to a tax pro (or a really awesome bookkeeper….hi there!) before making the leap

👉 Want more small business tips, tax strategies, and the occasional laugh to make the numbers a little less boring? Subscribe to Tea on the Ledger, we’ll help you navigate business finances like a pro.

Let’s keep your business growing (and the IRS off your back). 🌿

Freelancers: How to Survive Tax Season Without Losing Your Mind

Tax season. Two little words that can turn any freelancer into a ball of stress, armed with a pile of receipts, an empty coffee cup, and a sense of existential dread.

If you’re reading this, you’re probably already bracing yourself for the inevitable: the IRS wants their share, and it’s up to you to figure out how to make that happen - without losing your entire weekend.

But here’s the good news: with a little know-how (and a touch of humor), you can tackle tax season like a pro. Let’s break down the freelancer tax tips 2025 that’ll help you keep your sanity, and maybe even save a few bucks.

💸 Tip #1: Set Aside 25–30% for Taxes (Like, Now)

The biggest mistake freelancers make? Spending every dollar they earn and then scrambling for tax payments.

Here’s the deal: taxes aren’t optional. The IRS expects you to pay, whether you’re ready or not. So, the golden rule? Every time you get paid, squirrel away 25–30% in a separate savings account, pretend it doesn’t exist.

When tax season rolls around, you’ll be so glad you did.

📅 Tip #2: Don’t Forget Quarterly Estimated Taxes

Freelancers don’t get taxes automatically withheld like traditional employees. That means you’re responsible for paying quarterly estimated taxes, and if you skip them - the IRS will send you a love letter (in the form of penalties).

Mark these 2025 due dates in your calendar:
✅ April 15
✅ June 15
✅ September 15
✅ January 15 (2026)

Pro tip: Automate reminders so you don’t accidentally ghost the IRS.

🧾 Tip #3: Track Every Deductible Expense

Think you’re too small to need expense tracking? Think again. Every dollar counts.

Here are just a few things you can write off as a freelancer:
✅ Home office expenses (rent, utilities, internet)
✅ Business software (QuickBooks, Canva, Zoom)
✅ Professional services (like your bookkeeper - hint, hint)
✅ Marketing costs (website, ads, branded pens you definitely needed)
✅ Continuing education (online courses, books)
✅ Health insurance (yes, that too!)

Bottom line: If it helps you run your freelance business, it’s probably deductible.

📊 Tip #4: Keep Good Records or Face the Chaos

No, your bank account isn’t your bookkeeping system. And no, you can’t “just wing it” until tax season…..unless you enjoy panic attacks and last-minute document hunting.

Get a system in place. Use accounting software like QuickBooks or Wave, or even a good old-fashioned spreadsheet. Just make sure you’re tracking income, expenses, and invoices all year long.

🧠 Tip #5: Know the Freelancer Tax Forms

Here’s a quick cheat sheet:

• 1099-NEC: What you’ll receive from clients who paid you $600 or more

• Schedule C: Where you report your income and expenses

• Schedule SE: Where you calculate your self-employment tax (yep, that’s 15.3%—brace yourself)

• Form 1040: Your individual tax return

The good news? If you stay organized, these forms won’t seem so scary.

😂 Tip #6: Don’t Wait Until the Last Minute

Procrastinating on taxes is like waiting until the night before a big trip to pack, except instead of forgetting your toothbrush - you might forget a deduction and overpay the IRS.

Start early. Even if you’re not filing yet, get your paperwork together now. Your future self will thank you.

📢 Final Thoughts

Freelancers, tax season doesn’t have to be a nightmare. By following these freelancer tax tips for 2025, you can avoid the last-minute scramble, keep more of your hard-earned money, and maybe even enjoy a little peace of mind.

✅ Set aside money for taxes
✅ Pay estimated taxes on time
✅ Track every deductible expense
✅ Stay organized all year
✅ Start early (seriously, do it)

👉 Want more freelancer finance tips, tax strategies, and the occasional laugh to make it all a bit easier? Subscribe to Tea on the Ledger for practical advice, resources, and a little humor to help you thrive in business….without losing your mind.

Let’s tackle tax season together and come out on top! 🌿

The Secret Sauce to Skyrocket Your Side Hustle Income (You’ll Be Shocked!)

When you started your side hustle, you probably thought, I’ll make a little extra cash, maybe treat myself to an occasional latte or a new pair of shoes. Fast forward a few months, and you’re realizing this side hustle has bills of its own, and those lattes? They’re starting to feel like luxury splurges.

If you’re tired of feeling like you’re working hard but not seeing enough in your bank account, it’s time for a game plan. And guess what? There’s no secret lottery ticket, just solid strategies that actually work.

Let’s dive into the increase income side hustle tips that’ll help you turn “side hustle” into serious income. Get ready to be a little shocked (in the best way).

🚀 Tip 1: Raise Your Prices (Seriously, Do It)

If you’re undercharging, you’re not running a business - you’re running a very stressful charity.

Think about it: Are you charging what your service is really worth? Or are you pricing like you’re still in that “please like me” phase?

Here’s the reality:
✅ If clients keep saying yes without hesitation, you’re probably too cheap
✅ If you haven’t raised your rates in a year, it’s time

Even a 10–20% increase can make a huge difference, and the right clients won’t blink.

🛠️ Tip 2: Offer Add-Ons and Upsells

Ever been to a car wash where they offer a “deluxe wax” for $10 extra? That’s the power of an upsell.

Ask yourself:

• Can I bundle services for a higher package?

• Is there a premium version of my offer?

• Can I sell a template, guide, or mini-course alongside my service?

It’s easier to sell more to an existing customer than to find a new one.

⏳ Tip 3: Stop Trading Time for Money

Side hustles that rely entirely on your hours (hello, freelancers) have a ceiling. The secret? Start adding scalable offers.

Think digital products, templates, workshops, or even a low-ticket course.

Example: If you’re a graphic designer, sell Canva templates. If you’re a virtual assistant, sell a “Get Organized in 5 Days” checklist. One product can make money while you sleep (and who doesn’t love that?).

📣 Tip 4: Market Yourself (Yes, Really)

You can have the best offer in the world, but if no one knows about it, you’re not going to make a dime.

✅ Post on social media
✅ Network like a pro (both online and in real life)
✅ Join communities where your clients hang out
✅ And for the love of Wi-Fi, don’t be afraid to talk about what you do

Your side hustle isn’t a secret, so shout it from the rooftops.

🗂️ Tip 5: Streamline Your Systems

You didn’t start a side hustle to spend 10 hours a week doing admin. If you’re drowning in spreadsheets and manual tasks, it’s time to automate.

Look into tools like:
✅ QuickBooks for invoicing and finances
✅ HoneyBook or Dubsado for client management
✅ Zapier for automating repetitive tasks

Less time on admin = more time to focus on growth (and Netflix, let’s be honest).

😂 Bonus Tip: Stop Waiting for Perfect

If you’re waiting for the perfect time, perfect website, or perfect offer… spoiler: that time isn’t coming. The secret sauce is starting messy and improving as you go.

Launch the thing. Post the offer. Raise the price. You’ll learn way more by doing than by waiting.

🏁 Final Thoughts

Here’s the bottom line: growing your side hustle income doesn’t happen by accident—it happens when you take intentional steps.

✅ Raise your prices
✅ Add upsells
✅ Create scalable products
✅ Market like you mean it
✅ Streamline your systems

And most importantly, believe that your side hustle is worth it. Because it is.

👉 Want more tips to turn your side hustle into a profit-making machine? Subscribe to Tea on the Ledger for practical finance advice, income-boosting ideas, and a few laughs along the way.

Let’s make your side hustle the main event in your bank account! 🌿

The Tax Write-Offs You’re Probably Missing (and It’s Costing You Thousands!)

Tax season. That magical time of year when you realise just how many things you could have written off, if only you’d known.

If you’re a small business owner, chances are you’re missing out on some major tax savings. The IRS isn’t exactly throwing a parade to remind you about all the deductions you’re entitled to. That’s why we’re here: to break down the small business tax deductions for 2025 onwards that you can’t afford to overlook.

Let’s dive in, because leaving money on the table? Yeah, we don’t do that here.

🧾 The Big (and Often Missed) Small Business Tax Deductions for 2025 onwards

1️⃣ Home Office Deduction

Yes, you can deduct part of your rent or mortgage, utilities, and even internet if you work from home, as long as you use the space exclusively for business. That means your kitchen table doesn’t count if you’re also using it for snack breaks and family dinners.

2️⃣ Business Meals

Grabbing lunch with a client? Hosting a coffee catch-up with a potential partner? Those meals are 50% deductible (and in some cases, 100% if provided at a company event). Just don’t go wild and try to write off every single Starbucks run, your accountant will give you the side-eye.

3️⃣ Professional Services

Bookkeepers, accountants (hello!), lawyers, consultants - those fees are all tax-deductible. If they help you run your business, they’re fair game.

4️⃣ Subscriptions and Software

Your Canva Pro account? Tax-deductible. Your QuickBooks subscription? Tax-deductible. That fancy SEO tool you only used once in January but keep paying for? Also tax-deductible (though maybe consider cancelling it).

5️⃣ Continuing Education

Courses, workshops, certifications, or even books that improve your business skills are deductible. Yes, that $199 online course counts - assuming you actually opened it (no judgment).

6️⃣ Marketing and Advertising

Your website hosting fees, business cards, Instagram ads, and even branded tote bags are all marketing expenses - and fully deductible. If it promotes your business, it’s a write-off.

7️⃣ Mileage and Car Expenses

If you drive for business purposes (think client meetings, supply runs, or networking events), you can deduct mileage. The 2025 IRS mileage rate hasn’t been confirmed yet, but it’s usually around 65 cents per mile. Track it—or risk losing it.

8️⃣ Business Insurance

Yep, that business liability insurance you grumble about paying every year? It’s deductible too.

9️⃣ Retirement Contributions

Contributing to a SEP IRA or Solo 401(k)? You can deduct those contributions, which is a win-win: save for the future and lower your tax bill today.

🔟 Bad Debts

If you’ve invoiced a client and they ghosted you (ugh), that bad debt may be deductible. Talk to your accountant, because even your heartbreak can save you some tax dollars.

😂 The Tax Deduction Myths You Need to Ignore

Let’s set the record straight:
❌ Your dog is not a business expense (even if he’s your “chief morale officer”)
❌ Your personal gym membership doesn’t count (unless you’re a fitness coach)
❌ That “networking” trip to Hawaii? Good luck convincing the IRS on that one

💸 How Much Could You Be Saving?

If you’re not taking advantage of these deductions, you could be missing out on thousands of dollars in tax savings every year.

Think about it:

• Home office deduction? Could save you $1,500+

• Mileage? Add another $2,000+

• Professional services? Who knows how high that could go, depending on your team

It adds up fast.

🏁 Final Thoughts

Small business tax deductions in 2025 aren’t just about saving a few bucks, they’re about keeping your hard-earned money in your pocket, where it belongs.

✅ Keep your receipts
✅ Track your expenses (yes, all of them)
✅ Don’t assume you know what counts, ask a pro
✅ And please, for the love of spreadsheets, don’t wait until tax time to figure this out

👉 Want more smart business finance tips, practical advice, and a side of humor (because taxes are way less painful when you’re laughing)? Subscribe to Tea on the Ledger - where we make business finances less stressful, one blog at a time.

Let’s keep that tax bill low and your profits high! 🌿

Why Your Bookkeeping is a Ticking Time Bomb (And How to Defuse It)

Let’s face it, bookkeeping isn’t exactly the sexiest part of running a business. Most entrepreneurs don’t wake up thinking, Wow, I can’t wait to reconcile my bank statements today! But here’s the thing: ignoring your books is like ignoring a ticking time bomb under your desk.

One wrong move, and boom…..your profits vanish, your tax bill explodes, and your business dreams go up in smoke.

So let’s talk about the bookkeeping mistakes that hurt profits, how they sneak up on you, and most importantly, how to defuse them before they blow up your business.

💥 The Most Common Bookkeeping Mistakes (aka Business Profit Killers)

1️⃣ Mixing Business and Personal Expenses

You know the drill: you’re at Target grabbing “office supplies,” but somehow there’s also a new candle, some snacks, and maybe a sweater in the cart. No judgment - but mixing business and personal finances is a recipe for chaos.

Why It Hurts Profits:
It makes tracking true business expenses a nightmare and can lead to missed deductions (aka, paying more tax than you need to).

Defuse It:
Open a separate business account. Swipe only that card for anything related to your business.

2️⃣ Ignoring Reconciliations

Reconciliations aren’t just for accountants - they’re how you make sure what’s in your bank account matches what’s in your books. Skip them, and you’re flying blind.

Why It Hurts Profits:
You’ll miss errors, duplicate charges, or sneaky subscription fees you forgot about.

Defuse It:
Reconcile your accounts monthly. Set a reminder if you must, just do it.

3️⃣ Not Tracking Accounts Receivable

Ah, unpaid invoices - the silent profit killer. If you’re not tracking who owes you money, chances are you’re leaving cash on the table.

Why It Hurts Profits:
You can’t spend money that’s still stuck in someone else’s pocket.

Defuse It:
Review your accounts receivable regularly. Follow up on unpaid invoices like your rent depends on it (because, let’s be honest, it does).

4️⃣ Misclassifying Expenses

Not everything is “Miscellaneous.” Putting expenses in the wrong categories can mess up your financial reports, cause confusion at tax time, and make it hard to see where your money is really going.

Why It Hurts Profits:
Bad data = bad decisions. Enough said.

Defuse It:
Learn your chart of accounts. Or better yet, hire a bookkeeper (hi there!).

5️⃣ Skipping Regular Financial Reviews

If you’re not looking at your financial reports regularly, you’re missing the full picture. It’s like driving with a blindfold on - fun for a movie plot, bad for business.

Why It Hurts Profits:
You’ll miss trends, overspending, or that subscription you forgot to cancel three months ago.

Defuse It:
Block out time every month to review your profit and loss, balance sheet, and cash flow. Pour yourself a coffee, make it a ritual.

🏁 The Bottom Line: Don’t Let Your Books Blow Up Your Business

Here’s the thing—bookkeeping mistakes that hurt profits aren’t just small errors. They add up, fast. One missed invoice, one misclassified expense, one unreviewed report… and suddenly your profits are leaking like a bad faucet.

But the good news? You can absolutely defuse the ticking time bomb by:
✅ Keeping business and personal finances separate
✅ Reconciling accounts monthly
✅ Tracking what you’re owed (and collecting it!)
✅ Categorizing expenses correctly
✅ Reviewing reports regularly

👉 Want more small business finance tips, bookkeeping hacks, and the occasional bad accounting pun? Subscribe to Tea on the Ledger - your go-to source for practical advice and a few laughs along the way.

Let’s turn that bookkeeping bomb into a profit powerhouse! 🌿

How Much Does Bookkeeping Really Cost? What No One Tells You

Let’s talk about the question every small business owner has Googled at 2 a.m.: How much does bookkeeping really cost?

Spoiler alert: it’s not a simple answer like “$99 a month.” And anyone who tells you it is? Probably trying to sell you a service that comes with more surprise fees than your last Uber ride.

So, let’s break it down - bookkeeping services pricing for small businesses, what you actually get for your money, and the hidden costs no one talks about. Grab your tea, and let’s spill it.

📊 What You’re Really Paying For

Here’s the thing: bookkeeping isn’t just about typing numbers into a spreadsheet. It’s about keeping your financial house in order so you can:
✅ Avoid tax-time panic attacks
✅ Make smart business decisions
✅ Spot problems before they become expensive disasters

When you pay for bookkeeping, you’re paying for:

• Bank account and credit card reconciliations

• Categorizing transactions (yes, even that one weird Amazon purchase)

• Financial reports (P&L, Balance Sheet, the works)

• Expense tracking

• Tax-time prep (hello, 1099s!)

• Sometimes, bonus budgeting help or cash flow forecasts

In other words, it’s not just “data entry”, it’s the foundation of your business finances.

💸 So… What Does Bookkeeping Cost?

Let’s talk numbers, because that’s what we’re here for:

💼 DIY Bookkeeping (aka You Doing Everything)
Cost: $0–$50/month (just the software, not your sanity)
Risk: High—because let’s be honest, you didn’t start a business to become an accountant, did you?

💻 Basic Bookkeeping Services
Cost: $200–$500/month
This usually covers reconciliations, basic reports, and transactions under a certain limit (think up to 100–200 a month).

📈 Full-Service Bookkeeping
Cost: $500–$1,500/month
Includes everything from basic services plus regular financial reviews, accounts payable/receivable management, and support for your growing business.

🌟 Custom Packages (for complex businesses)
Cost: $1,500+
For businesses with inventory, multiple locations, payroll, or international transactions - think restaurants, e-commerce, or agencies with a lot going on.

🤯 Hidden Costs Nobody Talks About

Here’s the tea they don’t spill on the sales page:
☕ “Additional Transaction” Fees – Some bookkeepers charge extra if you go over your monthly transaction limit.
☕ Clean-Up Fees – If your books are a hot mess (no judgment), there might be a one-time charge to get them tidy.
☕ Tax Prep Add-Ons – Not all bookkeepers handle tax filings, so you may need a separate CPA come tax time.
☕ Software Costs – QuickBooks isn’t always included, make sure to ask!

😂 The Real Cost of NOT Having a Bookkeeper

Let’s play a quick game of “What If”…

What if you don’t hire a bookkeeper and instead DIY your books?

• Missed deductions? 🫣

• Late tax payments? 😬

• Messy reports that scare away lenders or investors? 😭

The real cost of not having a bookkeeper can be much higher than their monthly fee - just ask anyone who’s faced an IRS audit or had to hire an accountant for an emergency rescue mission.

🏁 Final Thoughts

Bookkeeping services pricing for small businesses isn’t a one-size-fits-all answer, but here’s what you need to know:
✅ Prices vary based on your business size and complexity
✅ You’re paying for peace of mind, not just number crunching
✅ A good bookkeeper is an investment, not an expense
✅ Cheaper isn’t always better - because fixing messy books? That’s expensive

👉 Want more no-fluff tips on how to manage your business finances without pulling your hair out? Subscribe to Tea on the Ledger for practical advice, smart strategies, and a little bookkeeping humor to keep you going.

Let’s make those numbers work for you, not against you! 🌿

Financial Mistakes New Business Owners Make—and How to Avoid Them

Starting a business is exciting. You’ve got your logo, your website, and a business plan scribbled on the back of a napkin. You’re ready to take on the world - until, a few months in, you realize your bank account looks like a sad meme and you’re asking yourself where did the money go?

Fear not, fellow entrepreneur. We’re diving into the financial mistakes new entrepreneurs make - so you can dodge them like a pro and keep your business (and your sanity) intact.

Let’s get into it.

💸 Mistake #1: Mixing Personal and Business Finances

Ah yes, the classic “I’ll just pay for this business thing on my personal credit card and figure it out later” move. Spoiler: later never comes, and tax season becomes a full-blown horror movie.

How to Avoid It:
Open a separate business bank account now. Use it for everything - expenses, income, that one slightly questionable Canva subscription. Keep it clean, keep it separate.

🏦 Mistake #2: Underestimating Start-Up Costs

Sure, you can start a business on a shoestring budget… but “shoestring” doesn’t mean zero dollars. Many new business owners forget to budget for essentials like software, legal fees, insurance, and (oh yes) taxes.

How to Avoid It:
Write down all your expected costs, and then add 20%. Because surprise expenses will happen.

📊 Mistake #3: Not Tracking Cash Flow

Here’s a fun fact: cash flow is the lifeblood of your business. No cash flow, no business. Yet so many new entrepreneurs ignore it until their account is emptier than their fridge the day before payday.

How to Avoid It:
Track what’s coming in and going out. Use accounting software (QuickBooks, Wave, even a spreadsheet if you’re old school). Check it weekly - yes, every single week.

🧾 Mistake #4: Forgetting About Taxes

You know what’s worse than paying taxes? Paying taxes with penalties and interest because you didn’t plan ahead.

How to Avoid It:
Set aside 25%–30% of your income for taxes as it comes in. Better to have too much than not enough.

💰 Mistake #5: Underpricing Your Services

Here’s a tough pill to swallow: if you’re not charging enough, you’re not running a business - you’re running a charity. Many new entrepreneurs lowball their prices out of fear, only to realize they’re working for peanuts.

How to Avoid It:
Price based on your costs, desired profit, and the value you bring. Not sure how? Check out our blog on pricing services based on business finances (shameless plug, but hey, it’s helpful).

🚀 Mistake #6: Trying to Do It All Yourself

Just because you can do your own bookkeeping, marketing, website design, and social media doesn’t mean you should. Burnout is real, and doing everything can slow your business growth.

How to Avoid It:
Outsource where it makes sense - hire a bookkeeper (hello!), get a designer, or use that AI assistant you’ve been eyeing. Focus on what you do best.

😂 Mistake #7: Ignoring Your Financial Reports

If the words “profit and loss statement” make you want to take a nap, I get it. But ignoring your numbers is like driving blindfolded. You need to know what’s going on to make smart decisions.

How to Avoid It:
Review your reports monthly. Look at your profit, expenses, cash flow, and make a plan. You’ll feel like a boss, I promise.

🏁 Final Thoughts

Starting a business is a wild ride, but you don’t have to learn everything the hard way. By avoiding these common financial mistakes, you’ll set yourself up for smoother sailing and stronger profits.

So here’s your action plan:
✅ Keep personal and business finances separate
✅ Budget everything
✅ Track cash flow like your business depends on it (because it does)
✅ Plan for taxes
✅ Price for profit
✅ Get help when you need it
✅ Check your reports (and maybe pour a cup of tea while you’re at it)

👉 Want more tips, laughs, and real-talk finance advice for your small business? Subscribe to Tea on the Ledger - your go-to source for practical strategies, small business wisdom, and a healthy dose of humor.

Let’s make smart money moves, together. 🌿

Business Financial Goals You Should Be Setting This Quarter

Ah, quarterly goals. The phrase that sparks equal parts excitement and panic for small business owners everywhere. If “quarterly financial goals for small business” sounds like something only Fortune 500 companies care about, think again.

Because whether you’re running a one-person Etsy shop or managing a growing team, setting financial goals each quarter is exactly how you stay ahead of the chaos - and make sure your business is thriving, not just surviving.

So grab a coffee (or something stronger, no judgment), and let’s break down how to crush your next quarter like the boss you are.

🧠 Why Bother with Quarterly Financial Goals Anyway?

Let’s be real: winging it is fun…until it’s tax season and you realize your books look like a toddler’s art project. Quarterly goals help you:
✅ Stay focused (hello, shiny object syndrome!)
✅ Track progress and pivot when needed
✅ Make informed decisions instead of guesses
✅ Build a stronger, more profitable business

Basically, they’re like mini checkpoints for your money, and your sanity.

💸 The Top 5 Financial Goals to Set This Quarter

1️⃣ Boost Your Cash Flow

If your bank account feels like a rollercoaster, it’s time to smooth out the ride. Set a goal to improve your cash flow by:

• Following up on overdue invoices (you know the ones)

• Offering discounts for early payments

• Reviewing your pricing - are you charging what you’re worth, or are you still in “please like me” mode?

2️⃣ Cut Unnecessary Expenses (aka the “Do I Really Need That?” Check)

We all love a good subscription…until you’re paying $49.99 a month for an app you opened once in 2022. Set a goal to review all expenses and cut at least 10% of what’s not essential.

Bonus tip: Swap to annual billing where possible to save a few bucks.

3️⃣ Increase Revenue by a Set Percentage

Whether it’s 5%, 10%, or an ambitious 20%, pick a target and go for it. Get creative:

• Upsell to existing clients

• Launch a limited-time offer

• Add a new service or product

• Actually market your business (yes, we see you hiding behind “word of mouth”)

4️⃣ Save for Taxes (Seriously, Don’t Skip This)

No one likes a surprise tax bill. Set a goal to stash a percentage of your income into a separate tax account each month. Your future self will thank you….and so will your accountant.

5️⃣ Review Your Profit Margins

This quarter, aim to increase your profit margins by trimming costs or raising prices. Remember, a business isn’t successful just because it’s busy - it’s successful when it’s profitable.

🏃‍♀️ How to Actually Stick to These Goals

Let’s be honest, setting goals is the easy part. Following through? That’s where most of us drop the ball.

Here’s how to stay on track:
✅ Block time in your calendar to review goals weekly
✅ Track progress in a spreadsheet, app, or even a sticky note - whatever works!
✅ Celebrate small wins (yes, even sending one late invoice reminder counts)
✅ Don’t beat yourself up if you fall behind, just adjust and keep going

🎯 The Bottom Line

Quarterly financial goals for small business owners aren’t just for the big players - they’re for you, right now, exactly where you are. The key is to start small, stay consistent, and laugh at the occasional disaster (because let’s be real, there will be a few).

So, what are your financial goals for this quarter? Drop them in the comments - or better yet, subscribe to Tea on the Ledger for more no-nonsense, slightly sassy advice to help you keep your books in order and your business growing strong.

Let’s make this quarter your most profitable one yet! 🌿

Do You Need a Financial Advisor for Your Business?

Ah, the age-old question for small business owners: Should small business hire financial advisor? Or is that just another fancy title for someone who charges you a fortune to tell you what you already know - like “spend less than you make”?

Let’s break it down, with a side of laughs and a solid plan for your business.

🤔 What Does a Financial Advisor Actually Do?

Think of a financial advisor as your business money BFF. They can:
✅ Help you plan for the future (because winging it is not a strategy)
✅ Create budgets that actually make sense
✅ Forecast cash flow (so you don’t run out of money mid-December)
✅ Advise on taxes, retirement plans, and investments
✅ Help you decide if you really need that second office espresso machine

Basically, they help you see the big picture and make smart decisions for your business - not just next week, but next year and beyond.

💸 The Case For Hiring a Financial Advisor

Let’s be honest: if you’re reading this blog because your business finances are starting to look like a tangled mess of receipts, mystery expenses, and that one time you bought a “team-building” VR headset, maybe it’s time for help.

Reasons to hire a financial advisor include:
✅ You’re making a profit, but don’t know what to do with it
✅ You want to grow but aren’t sure how to plan for it
✅ Your taxes are a nightmare, and your CPA is starting to ghost you
✅ You want to set up a retirement plan (because, yes, business owners need one too!)
✅ You’re losing sleep over money (and not because you were binge-watching Netflix until 2 a.m.)

A good financial advisor can save you way more than they cost….especially when you’re making big decisions like taking out a loan, investing, or preparing to sell the business.

😬 The Case Against Hiring a Financial Advisor

Look, not every business needs a financial advisor right away. If you’re just starting out, cash is tight, and you’re still figuring out your services or pricing, you may not need a pro just yet.

You might hold off on hiring if:

• You’re pre-revenue or just getting started

• Your business is super simple with low expenses

• You feel confident in your DIY money management skills (but make sure you’re not just thinking you’re confident while winging it)

Still, it’s worth asking: Could a financial advisor help me get there faster and smarter?

🧐 How to Choose the Right Financial Advisor

Not all advisors are created equal. Here’s what to look for:
✅ Experience with small businesses, bonus points if they’ve worked with businesses in your industry
✅ Fee structure transparency, avoid the ones who talk in circles about how they get paid
✅ Good vibes - yes, this is important. You need someone you can actually talk to without feeling judged for your “strategic” 4 p.m. Starbucks runs.
✅ Credentials - look for MBA (Master of Business Administration), CGMA (Chartered Global Management Accountant), CFP (Certified Financial Planner) or CPA (Certified Public Accountant) designations

🌟 The Bottom Line: Should Small Business Hire Financial Advisor?

Here’s the tea: If you’re making money, have plans to grow, or want to avoid tax-time panic attacks, hiring a financial advisor is one of the best investments you can make in your business. They can help you save on taxes, plan for the future, and make your money work harder for you - because hustling alone is so last season.

But if you’re just getting started or keeping it super simple, you might be fine without one for now, just promise me you’ll at least keep your books in order (and yes, we can help with that too).

☕ Want More Business Finance Tips (With a Side of Humor)?

Subscribe to Tea on the Ledger for practical strategies, bookkeeping tips, and small business finance insights served hot and fresh - no boring lectures, just real talk to help your business grow.

The Financial Habits of Successful Entrepreneurs

If you’re a small business owner, there’s one decision that can seriously affect how you track your finances, pay your taxes, and ultimately grow your business:
Should you use cash or accrual accounting?

It’s a question that gets tossed around a lot, especially when tax time rolls around or you're applying for a loan…but many business owners aren’t sure what the difference actually is, or how it impacts their bottom line.

Let’s clear that up. In this post, we’ll break down cash vs. accrual accounting for small business, the pros and cons of each and most importantly, which one could actually save you money.

🧾 What Is Cash Accounting?

Cash accounting is the simpler of the two. You only record income and expenses when money actually changes hands.

Example:

• You invoice a client in May

• They pay you in June

• You record the income in June (when it hits your bank)

💡 Same goes for expenses: if you get a bill today but pay it next month, you record the expense next month.

✅ Pros:

• Easy to use and understand

• Great for sole proprietors, freelancers, and side hustles

• Gives a real-time snapshot of available cash

• Typically results in fewer bookkeeping headaches

❌ Cons:

• Doesn’t show future obligations or incoming money

• Can give a misleading picture of long-term profitability

• May not meet requirements if your business grows past a certain size

💡 Many small businesses start with cash accounting because it’s straightforward, but that doesn’t mean it’s the best long-term fit.

📊 What Is Accrual Accounting?

Accrual accounting records income and expenses when they are earned or incurred, not when the money is actually received or paid.

Example:

• You invoice a client in May

• You record the income in May, even if they don’t pay until June

💡 It works the same for expenses: if you receive a bill, you record it on the date you were billed, not when you paid.

✅ Pros:

• Gives a more accurate picture of financial health

• Better for forecasting and decision-making

• Required for businesses that make over $27 million/year (IRS rule)

• Preferred by lenders and investors

❌ Cons:

• More complex bookkeeping

• Can be confusing if you don’t track cash flow separately

• May show profits even when you don’t have the cash in hand

💡 With accrual, you need to watch your cash flow carefully, because profit on paper doesn’t always mean cash in the bank.

💼 Cash vs. Accrual Accounting for Small Business: Which Is Better?

The short answer: It depends on your business model and financial goals.

💡 If you sell physical products or have inventory, accrual is usually the better (and required) method.

💸 Which Method Can Save You More Money?

🧮 Cash Method Tax Advantage:

With cash accounting, you may be able to delay income recognition until the next tax year or prepay expenses to reduce your taxable income: offering a short-term tax savings strategy.

🔍 Accrual Method Insight Advantage:

Accrual gives you a more accurate picture of your profitability, which can help with:

• Strategic planning

• Scaling your business

• Qualifying for funding

• Avoiding cash shortfalls due to unexpected expenses

Bottom line:

• If your income is simple, your cash flow is tight, and you’re just getting started: cash accounting can save you in the short term.

• If your business is growing, and you want full financial visibility: accrual will save you long-term headaches and help you grow smarter.

🧠 Can You Switch Methods Later?

Yes! You can switch from cash to accrual (or vice versa), but it’s not as simple as flipping a switch. It often requires:

• Adjusting your books

• Filing IRS Form 3115

• Possibly working with a bookkeeper or CPA to ensure compliance

💡 At Breakspears Bookkeeping Services LLC, we help clients transition smoothly, keeping your financials clean and audit-proof.

💬 Final Thoughts: Choose the Method That Matches Your Goals

Understanding cash vs. accrual accounting for small business is about more than taxes: it’s about choosing the right lens to look at your finances through.

If you want simplicity and short-term control, cash accounting is a great start.
If you're planning to scale, take on investors, or just want better financial insight, accrual is your friend.

Either way, the key is consistency…..and having support to make the most of whichever method you choose.

📌 Not Sure Which Method Is Right for You?

At Breakspears Bookkeeping Services LLC, we help small business owners:
✅ Choose the right accounting method
✅ Set up QuickBooks to match their needs
✅ Track cash flow and stay tax-ready

👉 Explore our monthly remote bookkeeping packages
👉 Book a free discovery call to make the right financial choice for your business today.

What to Do if Your Business Is Losing Money

Running a business isn’t always sunshine, rainbows, and yacht parties. Sometimes it feels more like a leaky boat with you frantically bailing out water using a teaspoon. If your business is losing money and you’re wondering how to recover from business financial loss, you’re not alone, and you’re definitely not doomed.

Let’s break down the steps you can take to stop the bleeding, turn things around, and even have a laugh along the way (because let’s face it, crying into your Excel sheet won’t help).

💸 First, Take a Deep Breath (and Look at the Numbers)

Before you spiral into panic mode, it’s time for a financial reality check. Open your books (yes, even the scary parts). Review your profit and loss statements, cash flow reports, and balance sheets.

Ask yourself:
✅ Where is the money going?
✅ Are there expenses that can be cut - like that subscription for a project management tool you haven’t logged into since 2022?
✅ Is your pricing too low?
✅ Are customers paying on time, or is your AR report a graveyard of unpaid invoices?

Facing the facts is the first step to fixing the problem.

🧹 Cut Costs (Without Cutting Corners)

You don’t need to go full-on Scrooge, but smart expense cuts can make a huge difference. Start by trimming the fat - look for unnecessary spending, renegotiate contracts, and consider switching to lower-cost tools that still get the job done.

Quick wins to consider:

• Cancel underused software or services

• Switch to a more affordable business bank account

• Delay non-essential purchases

• Outsource only what’s necessary

Think of it like a closet cleanout - if it’s not sparking joy (or revenue), it might need to go.

📈 Boost Revenue (Yes, Easier Said Than Done, But Let’s Talk)

Cutting costs can only take you so far. To truly recover from financial loss, you need to find ways to increase your income.

Here’s how:
💡 Raise prices (gently, explain the value!)
💡 Introduce a new service or product
💡 Upsell or cross-sell existing clients
💡 Follow up on unpaid invoices like your rent depends on it (because, let’s be honest, it kinda does)

And remember: sometimes a small pivot can bring in big results.

🏦 Get Help Before It’s Too Late

If the hole feels too deep, it’s okay to ask for help. This could mean:

• Talking to a bookkeeper (ahem, like me!)

• Meeting with a financial advisor

• Discussing financing options with your bank

• Applying for a small business loan or grant

Remember, even the most successful businesses have faced losses. The key is to tackle it early.

🌟 Plan for the Future (Because You’re Not Giving Up That Easy)

Once you’ve stabilized, create a plan to avoid the same mess next year. Set a budget, track key metrics (like cash flow and profit margins), and review your finances regularly.

Pro tip: Schedule a monthly finance date with yourself. Grab a coffee (or a glass of wine, no judgment), review your numbers, and adjust as needed.

💬 Final Thoughts: You’re Not Alone, and You’re Stronger Than You Think

Losing money in business happens. It doesn’t mean you’re bad at what you do, and it definitely doesn’t mean you should throw in the towel. It means you’re human, and every successful entrepreneur has been there.

So take a breath, make a plan, and get back in the game.

👉 Want more practical, no-nonsense tips for managing your business finances (with a side of humor)? Subscribe to Tea on the Ledger for insights that make bookkeeping a little less boring and your business a lot more profitable.

Your End-of-Year Business Finance Checklist

It’s that time of year again - closing out your books, reviewing your numbers, and making sure your small business is set up for success in the year ahead. If the phrase “end of year financial checklist for small business” has you breaking into a cold sweat, take a deep breath. We’ve got you covered.

Here’s a step-by-step guide to help you wrap up your business finances with confidence, avoid tax-time headaches, and start the new year strong.

🎯 Why an End of Year Financial Checklist Matters

Closing out your books isn’t just about crossing off tasks….it’s about understanding where your business stands, identifying areas for improvement, and setting realistic goals. A solid year-end review helps you:
✅ Stay compliant with tax laws
✅ Uncover hidden profits (or problem areas)
✅ Make smarter financial decisions
✅ Plan for growth in the new year

Let’s dive in.

📊 Your Small Business End of Year Financial Checklist

1️⃣ Reconcile All Accounts

Before you close the books, ensure every transaction is accounted for. This means reconciling your bank accounts, credit cards, loans, and payment processors like Stripe or PayPal. Double-check for any duplicate or missing entries.

🔍 Tip: If you use QuickBooks or another accounting software, run a reconciliation report for each account.

2️⃣ Review Your Profit & Loss (P&L) Statement

Your P&L tells the story of your business. Are you making money? Where are you spending the most? Identify trends, big wins, and areas where costs crept up.

Ask yourself:

• Did revenue grow compared to last year?

• What were your biggest expenses, and can you cut costs next year?

• Are there any expenses that should be reclassified for tax savings?

3️⃣ Update and Organize Your Chart of Accounts

Your chart of accounts should accurately reflect your business activities. Delete unused accounts, merge duplicates, and ensure everything is categorized properly. This step makes tax time (and financial reporting) much smoother.

4️⃣ Check for Outstanding Invoices & Bills

Collect what you’re owed! Run an Accounts Receivable (A/R) aging report and follow up on unpaid invoices. On the flip side, review your Accounts Payable (A/P) and pay any outstanding bills to avoid late fees and interest.

5️⃣ Prepare for Tax Season

The sooner you gather your tax documents, the easier life will be in the new year. Your end of year tax prep checklist should include:
✅ Profit & Loss statement
✅ Balance Sheet
✅ 1099s for contractors (due January 31!)
✅ Any big asset purchases for depreciation
✅ Mileage logs or home office deductions
✅ Payroll reports and tax filings

💡 Bonus Tip: Consider meeting with your CPA or tax advisor in December to strategize tax-saving moves before the year closes.

6️⃣ Review Your Budget vs. Actuals

How did your actual income and expenses compare to your budget? Reviewing this helps you create a smarter, more realistic budget for next year. Adjust for any unexpected changes, whether it’s higher marketing costs or a surprise drop in sales.

7️⃣ Set Financial Goals for the New Year

Once you’ve reviewed your numbers, set your goals:

• Do you want to increase revenue by 20%?

• Cut expenses by 10%?

• Invest in a new tool or hire help?

Write these goals down and create an action plan.

🌟 Bonus: Tools to Make Year-End Easier

Here are some tools that can help you tackle your year-end checklist:
✅ QuickBooks Online – For reconciling accounts and financial reporting
✅ Gusto or ADP – For payroll reports and tax filings
✅ Relay or Novo – For business banking
✅ Google Sheets or Excel – For budgeting and goal-setting

🎉 Wrapping It Up

Your end of year financial checklist doesn’t have to feel overwhelming. By following these steps, you’ll close your books with confidence, avoid costly mistakes, and start the new year with a clear financial picture.

👉 Ready to stay ahead of your business finances year-round? Subscribe to the Tea on the Ledger newsletter for practical tips, resources, and strategies sent straight to your inbox.

When to Hire a CFO (And What It’ll Cost You)

If you are running a small business, you might wonder, “Do I really need a CFO?”

You are not alone. Many business owners hesitate to bring on a Chief Financial Officer because they think it is only for big corporations. But here’s the truth - knowing when to hire a CFO for small business can be a game-changer for your growth, cash flow, and long-term success.

Let’s break down when it makes sense to hire a CFO, what they actually do, and what it might cost you.

💡 What Does a CFO Actually Do?

A CFO is not just someone who “does the numbers.” They are a strategic partner who helps you make smarter financial decisions.

Here is what a CFO typically handles:
✅ Financial strategy and forecasting
✅ Budgeting and cash flow management
✅ Profitability analysis and pricing strategy
✅ Risk management and compliance
✅ Investor relations (if applicable)
✅ Tax strategy and financial reporting oversight

In short, a CFO is the person who helps you understand your financials deeply and use them to grow your business.

🚩 When to Hire a CFO for Small Business

So, how do you know when it is time?

Here are key signs:

✅ Your business is growing, but you feel out of control.
If your revenue is climbing but your expenses are unpredictable, or you are unsure if you are truly profitable, it is time to get help.

✅ You need financial forecasting for major decisions.
Planning to scale, expand, or seek funding? A CFO can help you create realistic projections and avoid costly mistakes.

✅ You are making more than $1 million in annual revenue.
This is a common benchmark where businesses start to need more sophisticated financial leadership.

✅ You are spending too much time on finances instead of running your business.
If you are the CEO and CFO in one, it is time to delegate.

✅ You are seeking investment or preparing for a sale.
Investors and buyers want clean financials and a clear plan for growth. A CFO can help you get there.

💸 What Does a CFO Cost?

CFO services can vary widely based on your business size, industry, and needs. Here’s a general breakdown:

✅ Fractional or Part-Time CFO
For many small businesses, a fractional CFO is a great solution. They work with you a few hours a week or month, helping with strategy and big-picture planning.
💰 Typical rates: $150–$500 per hour
💰 Monthly packages: $2,000–$8,000 per month

✅ Full-Time CFO
For larger businesses, a full-time CFO might be necessary.
💰 Salary range: $130,000–$250,000 per year, plus benefits

✅ Project-Based CFO
Need help with a specific task, like preparing for funding or a sale?
💰 Rates vary but can be a flat fee or hourly, depending on scope.

🏗️ When a CFO is Worth the Investment

Hiring a CFO is a big decision, but here is why it often pays off:
✅ They help you avoid costly mistakes.
✅ They free up your time to focus on growth.
✅ They provide clarity and confidence in your numbers.
✅ They guide you in making smarter, data-driven decisions.

In other words, a good CFO does not just cost you money - they help you make more of it.

Final Thoughts

Understanding when to hire a CFO for small business is about more than hitting a revenue target. It is about recognizing when your financial decisions are getting too complex to handle alone.

If you are feeling overwhelmed, missing growth opportunities, or unsure how to navigate the next stage of your business, it might be time to bring in a CFO - whether fractional, part-time, or full-time.

Your future self (and your bottom line) will thank you.

How to Project Your Business Finances for the Year Ahead

Ever feel like you are guessing when it comes to your business finances?

You are not alone. Many small business owners and freelancers find forecasting tricky, but a good business finance forecasting guide can change everything.

When you forecast your income, expenses, and cash flow for the year ahead, you gain clarity, confidence, and control over your financial future. Let’s break down the process step by step, without the jargon.

📊 What is Business Finance Forecasting?

Business finance forecasting is the process of estimating your future financial performance. It is not just about making random guesses; it is about creating a roadmap for your business based on past data, current trends, and realistic assumptions.

A forecast helps you answer key questions:

• How much will I earn?

• What will I spend?

• Will I have enough cash to cover expenses?

• Can I afford to invest in growth?

🏗️ Your Step-by-Step Business Finance Forecasting Guide

Here is a simple system for forecasting your finances for the year ahead.

1️⃣ Review Your Past Numbers

Look at your last 12 months of financial data:
✅ Total revenue
✅ Total expenses
✅ Profit margins
✅ Seasonal trends (busy and slow periods)

This helps you spot patterns and create a realistic starting point.

2️⃣ Project Your Revenue

Based on your past data and future plans:

• Estimate how much you will earn each month.

• Consider new products, services, or clients you expect to add.

• Be realistic, factor in potential challenges.

For example:
If you earned $10,000 per month last year and plan to launch a new service, you might forecast $12,000 per month for the next year.

3️⃣ Forecast Your Expenses

List out fixed expenses (like rent, software subscriptions) and variable expenses (like supplies, marketing, or hourly labor).

Ask:

• Will any costs increase this year?

• Are there new expenses to include?

• Can you cut any unnecessary costs?

Create a monthly estimate for each category.

4️⃣ Map Out Your Cash Flow

Even if you expect to be profitable, you might still face cash flow issues. A cash flow forecast helps you predict when money will come in and when it will go out.

Consider:
✅ Payment terms (when clients actually pay)
✅ Seasonal dips
✅ Large expenses due (like taxes or equipment)

This step keeps your business prepared, not surprised.

5️⃣ Set Financial Goals and Milestones

Once you have your forecast, set clear goals:
✅ Monthly revenue targets
✅ Expense limits
✅ Profit margin goals
✅ Savings targets (for taxes, emergencies, or growth)

These goals help you measure success and stay on track.

💡 Why Business Finance Forecasting Matters

A good forecast helps you:
✅ Make informed decisions
✅ Avoid cash flow problems
✅ Plan for taxes and big expenses
✅ Invest in growth with confidence

Without a forecast, you are just hoping for the best. With a forecast, you are creating a plan for success.

📅 How Often Should You Update Your Forecast?

Review and adjust your forecast monthly or quarterly. Business is dynamic - your forecast should be too.

✅ If sales are up, update your projections.
✅ If a major client drops off, adjust your forecast.
✅ If expenses change, reflect it in your plan.

Final Thoughts

This business finance forecasting guide gives you a clear, step-by-step approach to projecting your income, expenses, and cash flow for the year ahead.

No more guesswork - just solid numbers to guide your decisions.

Ready to take control of your business finances? Let’s make this your best year yet.

What Your Profit & Loss Statement Should Really Tell You

If you have ever stared at your Profit and Loss Statement (P&L) and thought, “What am I actually looking at?”, you are not alone.

Many freelancers, side hustlers, and small business owners struggle with understanding profit and loss statement details, yet this simple document can give you a crystal-clear picture of your business’s financial health.

Let’s break it down, step by step, so you can stop guessing and start using your P&L like a pro.

📊 What is a Profit and Loss Statement?

A Profit and Loss Statement (sometimes called an Income Statement) is a summary of your business’s revenue, costs, and profits over a specific period - usually a month, quarter, or year.

It shows:
✅ How much you earned (revenue)
✅ How much you spent (expenses)
✅ What is left over (profit or loss)

In other words, it tells you: Did your business make money or lose money?

🧩 The Key Sections of a Profit and Loss Statement

Here is what you will typically find on a P&L:

✅ Revenue (or Sales): The total income from your products or services.

✅ Cost of Goods Sold (COGS): The direct costs to produce what you sell (like materials or labor).

✅ Gross Profit: Revenue minus COGS, this shows how much you made before other expenses.

✅ Operating Expenses: The regular costs of running your business (rent, software, marketing).

✅ Net Profit (or Net Loss): What is left after all expenses are paid, this is the bottom line.

💡 What Should Your P&L Really Tell You?

Your Profit and Loss Statement is not just a list of numbers. It is a story about your business. Here is what you should be looking for:

1️⃣ Are You Actually Profitable?

Look at your Net Profit. Are you consistently making a profit, or are you running at a loss?

If your net profit is too low (or negative), it is a sign to review your pricing, cut costs, or find ways to increase revenue.

2️⃣ How Much Does It Cost to Run Your Business?

Your Operating Expenses section shows where your money is going. Are there areas where you can save?

For example:

• Are subscriptions piling up?

• Can you negotiate better rates with suppliers?

• Is your marketing spend delivering results?

3️⃣ What are Your Profit Margins?

Calculate your Gross Profit Margin:

This tells you how much money you are making from sales after covering production costs.

Higher margins = more room to invest in growth or pay yourself more.

4️⃣ Are There Seasonal or Monthly Trends?

Review your P&L over several months. Are there patterns?…..like slow summers or a busy holiday season?

Spotting trends helps you plan for cash flow dips and set realistic revenue targets.

🛠️ How to Use Your P&L for Better Decisions

✅ Pricing: Are your prices too low to cover costs?
✅ Spending: Where can you cut back without hurting your business?
✅ Investments: Can you afford that new hire, software, or marketing push?
✅ Taxes: Are you setting enough aside for quarterly taxes?

Your P&L is not just for your accountant, it is for you to make smarter choices every month.

📅 How Often Should You Review Your P&L?

Once a year at tax time is not enough.

Review your Profit and Loss Statement monthly. This keeps you informed, agile, and able to course-correct quickly if needed.

Final Thoughts

Understanding profit and loss statement basics is a skill every business owner should master. It is not just numbers on a page……it is the financial story of your business.

By reviewing your P&L regularly and asking the right questions, you will make better decisions, protect your cash flow, and build a stronger, more profitable business.

Let’s make your finances work for you, not against you.

How to Do a Monthly Financial Review

Keeping up with your business finances can feel like a full-time job. But here’s the secret: if you spend just 30 minutes a month on a monthly financial review, you’ll save yourself hours of stress and avoid costly mistakes.

The key? Having a monthly financial review checklist that keeps you focused and on track.

In this post, we’ll break down exactly how to do a monthly financial review, step by step, so you can stay in control of your business, make smart decisions, and actually enjoy looking at your numbers.

📝 Why a Monthly Financial Review Matters

Skipping a monthly financial review is like driving without checking your fuel gauge. You might be fine…….until you’re not.

A monthly financial review checklist helps you:
✅ Spot cash flow issues before they become a problem
✅ Track progress toward your goals
✅ Stay tax-ready all year long
✅ Make better decisions with confidence

📊 Your Monthly Financial Review Checklist

Here’s a simple, no-fluff checklist you can use every month.

1️⃣ Review Your Income

Start by checking your revenue for the month:

• Total income: How much did you bring in?

• Compare to your goals: Are you on track, ahead, or behind?

• Look for patterns: Which products or services are driving revenue?

2️⃣ Review Your Expenses

Next, review all your business expenses:

• What did you spend money on?

• Are there any unnecessary costs you can cut?

• Are any expenses higher than expected?

Pro tip: Categorize your expenses (e.g., software, marketing, supplies) for easier analysis and tax prep later.

3️⃣ Check Your Cash Flow

Look at the big picture:
✅ Did more money come in than go out this month?
✅ If not, why? (Slow sales, big one-off expense, late invoices?)
✅ Do you have enough cash for the next 1–3 months?

Cash flow is king, so don’t skip this step!

4️⃣ Reconcile Your Accounts

Take a few minutes to reconcile your bank and credit card statements:

• Match transactions to your records

• Double-check for any errors or surprises

• Ensure all invoices and bills are logged correctly

This step keeps your books clean and saves time at tax season.

5️⃣ Track Your Progress Toward Goals

Check in on your financial goals:

• Are you hitting your revenue targets?

• Have you met any savings goals (like an emergency fund or tax savings)?

• Do you need to adjust your pricing, marketing, or spending to stay on track?

6️⃣ Plan for the Month Ahead

End your review by setting a simple financial plan for next month:
✅ Any big expenses coming up?
✅ Any slow months expected?
✅ Any marketing or sales strategies to implement?

This keeps you proactive instead of reactive.

🔄 How Long Should a Monthly Review Take?

Once you get the hang of it, your monthly financial review should only take 30–60 minutes.

It’s a small time investment that pays off with:
✅ Less stress
✅ Fewer surprises
✅ Smarter business decisions

Final Thoughts

Your monthly financial review checklist is your business’s secret weapon. It helps you stay organized, avoid cash flow problems, and make confident decisions - all in under an hour a month.

So block off a little time on your calendar, grab your checklist, and make it happen. Your future self (and your bank account) will thank you.

Financial Red Flags That Scare Away Investors

Picture this: you’ve got a big pitch meeting lined up. You’re ready to wow potential investors with your vision, your product, and your passion.

But here’s the catch - even the best ideas won’t get funded if your business finances throw up red flags.

Whether you’re a freelancer looking for a small capital injection, or a small business owner seeking a major investment, knowing the business finance red flags for investors is critical.

Let’s dive into the most common financial warning signs that can make investors hesitate, and how you can fix them before they kill your funding dreams.

🚩 1️⃣ Messy or Incomplete Financial Records

Investors love clarity - and they expect your numbers to be clean, complete, and easy to understand.

If your books are disorganized, missing key reports, or rely on guesstimates, it’s a major red flag. Investors will think:

• “How can they manage money if they can’t even track it?”

• “What else are they missing?”

How to fix it:
✅ Use accounting software (like QuickBooks, Xero, or Wave).
✅ Keep financial statements up to date: P&L, balance sheet, cash flow.
✅ Be ready to explain your numbers clearly and confidently.

🚩 2️⃣ Inconsistent Cash Flow

Investors look for businesses with predictable cash flow, because it signals stability.

If your cash flow shows huge swings month-to-month with no clear explanation, they’ll wonder:

• “Is this business too risky?”

• “Can they cover operating expenses consistently?”

How to fix it:
✅ Build a cash flow forecast (even a simple spreadsheet works).
✅ Explain seasonal trends or one-off events that cause fluctuations.
✅ Have a plan for smoothing cash flow (like offering retainer packages or recurring revenue models).

🚩 3️⃣ High Debt with No Clear Repayment Plan

Debt itself isn’t a deal-breaker, but uncontrolled debt with no plan to manage it? Major red flag.

Investors want to know:

• How much debt do you have?

• What’s it used for?

• What’s the repayment schedule?

How to fix it:
✅ Be transparent about your debt and how you’re managing it.
✅ Show that debt is being used for growth, not to plug holes.
✅ Highlight strategies to reduce or restructure debt over time.

🚩 4️⃣ Low or Negative Profit Margins

If your business isn’t making a profit, or if margins are razor-thin - investors may wonder if the business is sustainable.

How to fix it:
✅ Break down your cost structure and show you know where every dollar goes.
✅ Highlight strategies to improve margins (raising prices, cutting costs, increasing efficiency).
✅ Share a timeline for profitability - investors love a clear, realistic plan.

🚩 5️⃣ Unclear or Unrealistic Financial Projections

Wild revenue forecasts with no supporting data = 🚩.

Investors will ask:

• “How did you come up with these numbers?”

• “Are these projections based on facts or wishful thinking?”

How to fix it:
✅ Use data-driven assumptions - industry benchmarks, past performance, market research.
✅ Provide best-case, worst-case, and realistic projections.
✅ Be prepared to walk through your assumptions in detail.

🚩 6️⃣ Personal Finances Mixed with Business Finances

Blurring the lines between personal and business money is a surefire way to make investors nervous.

It suggests poor financial management, and raises concerns about legal and tax compliance.

How to fix it:
✅ Open separate business bank accounts and credit cards.
✅ Pay yourself a salary from the business, rather than making random transfers.
✅ Keep clean, separate records for business vs. personal expenses.

Final Thoughts

Understanding the business finance red flags for investors is your secret weapon for building trust and securing funding.

By cleaning up your books, managing cash flow, keeping debt in check, and making realistic projections, you’ll not only impress investors - you’ll also set your business up for long-term success.

How to Automate Your Business Finances in 1 Weekend

Let’s be real - running a small business is hard enough without chasing invoices, tracking expenses, or remembering to pay yourself.

The solution? Automating small business finances.

It sounds fancy, but it’s totally doable. And here’s the best part: you can set it up in just one weekend, even if you’re not a tech wizard or finance pro.

Ready to simplify your money life, save hours every month, and avoid financial stress? Let’s dive in!

🌟 Why Automate Your Business Finances?

Here’s the thing:

✅ Less stress: No more missed invoices or late payments.
✅ Save time: Free up hours to focus on growing your business.
✅ Better decisions: See your cash flow in real time, without spreadsheets.
✅ Stay tax-ready: No more scrambling during tax season.

When it comes to automating small business finances, you’re building a system that works for you, not the other way around.

🏗️ Step 1: Choose Your Financial Tools

First, pick your tools. Here’s a quick-start list:

✅ Accounting Software (for tracking income, expenses, and taxes):

• QuickBooks Online

• Wave (free!)

• Xero

✅ Payment Processors (for client payments):

• Stripe

• PayPal

• Square

✅ Banking (for seamless integration):

• Relay (great for small businesses)

• Novo

• Mercury

✅ Expense Management Apps (for receipts & expenses):

• Dext

• Expensify

• QuickBooks

✅ Payroll (if needed):

• Gusto

• QuickBooks Payroll

Pick what fits your business size and budget - don’t overthink it!

🔁 Step 2: Set Up Automated Invoicing & Payments

Tired of chasing clients for payments? Automate it.

✅ Set up recurring invoices for retainer clients.
✅ Enable auto-reminders for overdue invoices.
✅ Offer multiple payment methods to make it easy for clients to pay.

Pro tip: Add payment links directly to invoices to get paid faster.

💳 Step 3: Automate Expense Tracking

No more piles of receipts or guessing at tax time.

✅ Connect your business bank account and credit card to your accounting software.
✅ Use a receipt scanner app (like Dext or QuickBooks) to snap photos on the go.
✅ Set up categories in your accounting tool so every expense is auto-tagged (e.g., software, travel, marketing).

🏦 Step 4: Automate Transfers & Savings

Pay yourself and your savings accounts automatically:

✅ Set up automatic transfers for:

• Your owner’s pay (weekly or biweekly)

• Taxes (25–30% of income)

• Profit savings (try 5–10% of income)

✅ Use multiple accounts:

• One for operations

• One for taxes

• One for profit

This is basically a Profit First approach, made simple.

📅 Step 5: Create a Monthly Money Review Routine

Even with automation, you still need to check in. But guess what? It’ll only take 30 minutes a month when you’ve automated the hard stuff.

✅ Set a calendar reminder for the first Monday of every month.
✅ Review:

• Cash flow

• Invoices sent/paid

• Upcoming bills
  ✅ Adjust if needed (like pausing subscriptions or sending payment reminders).

🚀 The Weekend Plan: Automating Small Business Finances

Here’s how you can tackle this in one weekend:

Final Thoughts

Automating small business finances isn’t just a time-saver - it’s a game-changer.

With a little weekend hustle, you’ll set up a system that saves you hours every month, keeps your books clean, and helps you make smarter money moves.

How to Handle Late Payments Without Hurting Client Relationships

Let’s be honest - dealing with late payments in small business is the headache no one warns you about.

You’ve done the work, sent the invoice, and now you’re stuck waiting... and waiting... and waiting.

The problem? Late payments don’t just mess with your cash flow, they can mess with your client relationships too.

But here’s the good news: you can handle late payments professionally, protect your business, and keep your clients happy. Let’s break down exactly how.

💡 Why Late Payments Happen (It’s Not Always About You)

First, let’s clear the air:
Late payments don’t always mean your client is flaky or disrespectful. Sometimes it’s just:
✅ Internal processes at their company
✅ Their own cash flow issues
✅ Forgetfulness or miscommunication

Understanding this helps you approach the situation with empathy, not frustration.

📅 Step 1: Set Clear Payment Terms (Before the Work Starts)

Prevention > cure.

Before you even send an invoice:
✅ State your payment terms (e.g., Net-7, Net-15, or Net-30)
✅ Include late fee policies
✅ Outline these terms in your contract or agreement

When expectations are clear upfront, you avoid awkward “I didn’t know” conversations later.

📩 Step 2: Send Invoices Promptly and Professionally

Sounds obvious, but many small business owners delay their own invoicing, then get frustrated when payments are late.

Best practices:

• Send invoices immediately upon project completion

• Use professional invoicing software (like QuickBooks or Wave)

• Include a friendly note with the invoice

Example:
"Thanks for working with me! Please see the attached invoice, due within 15 days as agreed. Let me know if you have any questions!"

⏰ Step 3: Follow Up (Without Feeling Pushy)

A polite reminder is often all it takes. Here’s a simple script you can use:

"Hi [Client Name], just a friendly reminder that invoice #[number] is due on [date]. Let me know if you need another copy or have any questions!"

If a payment is already late, say:

"Hi [Client], hope you’re well! Just checking in - invoice #[number] was due on [date]. Can you let me know the status? Thanks so much!"

Polite, professional, and non-confrontational.

💳 Step 4: Offer Flexible Payment Options

Sometimes late payments happen because your client is struggling with cash flow too. If you can, consider offering:
✅ Payment plans for larger invoices
✅ Multiple payment methods (ACH, credit card, PayPal)

This builds goodwill and shows you’re a partner, not just a vendor.

⚖️ Step 5: Know When to Enforce Late Fees

Late fees are fair, but they only work if you stick to them. If you’ve outlined a late fee in your contract (e.g., 2% per month overdue), don’t hesitate to enforce it when needed.

That said, use your judgment - sometimes waiving a late fee for a long-term, loyal client is worth it for the relationship.

🤝 Step 6: Protect the Relationship

Always assume the best unless proven otherwise. Approach late payments as a conversation, not a confrontation.

Phrase your follow-ups in a way that’s collaborative:
"Let’s get this squared away so we can keep moving forward on your projects!"

This keeps the vibe positive and professional, and keeps clients coming back.

🌟 Final Thoughts

Dealing with late payments in small business isn’t fun - but it’s part of the game.

By setting clear terms, following up consistently, and balancing professionalism with empathy, you can protect your cash flow without damaging your client relationships.