Did you know that many small businesses are still in recovery mode as the pandemic hangs on?
Many small businesses experienced significant financial losses since the beginning of the pandemic. However, many of these same businesses have also proved to be resilient and since the pre-pandemic days, have seen recently seen an increase in revenue.
Intuit recently did a survey documenting the financial losses that many small businesses had experienced since March 2020. Not surprisingly, the report, Intuit QuickBooks Small Business Recovery, found that COVID-19 has had a significant impact on the financial health of U.S. small businesses.
Did your business suffer financial and personnel losses due to the pandemic? Has your business begun to rebound yet? There are actions you can take in QuickBooks that may help in your recovery. For example:
Transactions: Carefully watch your income and expenses.
Track your transactions using QuickBooks tracking tools to document income and expenses.
Do you spend a lot of time working on your downloaded transactions? If you take advantage of the QuickBooks tools it will help your notice different patterns that you may need to modify or explore allowing you to see when and where you may have a dipping in income.
So that you get an overall picture of your income and expenses you should connect to multiple financial institutions. After you have connected, in the toolbar, click on Transactions, this should open the Banking page. Here you can check for any unrecognized entries as well as see transaction tracking tools. Check out the image above where you will see a vendor and the Category and Tags. This will make your reports more actionable and meaningful.
Clicking on Find Match can be a real-time saver.
Sales: Make it easier for customers to pay you.
Do you allow your existing and potential customers to pay online by credit card or bank transfer? If you’re not you may be losing sales, especially if your business is struggling. You may even find that your customers pay faster when they can pay online. There may be some nominal fees involved, but using QuickBooks Payments, you have the potential to increase your income, which should more than cover those fees.
You may find that your existing customers will pay faster and your customer base will grow when you set up merchants in QuickBooks payments.
Expenses: Keep tax time in mind when you categorize your expenses.
It’s not too early to start thinking about your current tax situation. Using QuickBooks, you can easily track your income as well as keep track of your tax-related expenses. Be sure that you assign each of your transactions in the correct categories (as described above) so you can get every tax deduction or credit that you deserve.
Running reports on a quarterly basis should help when you make estimated tax payments. This way, you may be able to reduce your quarterly obligation during the 2021 tax year and won’t have to wait until you file in 2022 to see savings.
Time: Be sure you bill all of your billable hours.
Some hours are likely to fall between the cracks if you don’t have an organized method to track your billable time. Using QuickBooks tools as you look through your downloaded transactions, you may even find expenses that can be billed to a customer. Select the Customer/project and check the Billable box so you’ll be able to include it on their next invoice.
Using the Transactions register, you can mark expenses as billable to customers.
You can also mark time entries for yourself or employees as hours as billable.
Reports: Run basic, critical reports regularly.
Creating reports will allow you to know how your business is doing financially. Here are some of the suggested reports:
- Accounts Receivable Aging Detail. This tells you who owes you, and how late are their payments?
- Business Snapshot. This is a series of charts and lists that provides a quick visual overview of key data.
- Budget vs. Actuals. If you’ve put the time and effort into creating a budget, it’s critical that you gauge your progress regularly and make adjustments as needed.
- Open Invoices. Customers who you have billed that haven’t paid yet.
- Sales by Product/Service Detail. This tells you what is selling well and what isn’t? You can make decisions about your product and service lines by viewing this report. This can be especially important when your sales are slow.
It’s important to control the parts of your business that you can no matter what’s going on with the economy. QuickBooks is designed to automate and streamline your daily accounting work as well as provide the necessary information to evaluate your current situation and plan for the future.
At Summit CPA we offer multiple resources to assist and help your business grow. If you’re ready to get an edge on your competitors? Contact our office at (866) 497-9761 to schedule an appointment with our advisors.