Do you have a business plan that you regularly refer to? If not, you could be jeopardizing your ability to reach your business goals.

In fact, we’ve all heard the saying: “Fail to Plan – then Plan to Fail,” which is exactly what today’s guest believes will happen if you don’t have a solid business plan in place to guide you.

On today’s show Annemarie Cross interviews Fran McCully – Virtual Bookkeeper and Principal from Your Administrative Solutions who believes that your business plan is the roadmap to building a successful business. And without one, it’s impossible to run your business effectively.

Fran talks about:

• the key elements you should include in your business plan

• why performing a comprehensive market analysis is so important, especially it you want to identify how you can distinguish yourself from your competitors; as well as

• steps you need to take to ensure you can achieve your business goals.

Fran also draw on her 30 years combined experience as an executive assistant in finance and budgeting to talk about why having a virtual bookkeeper (to help you keep track of your expenses and finances) is so important if you want to maximize your overall profitability. That means more money in your pocket!

If you haven’t created a business plan, or the one you’ve put together previously is outdated and sitting at the bottom of your filing cabinet, then grab a pen and paper and make sure you write down the practical steps that Fran shares to help you create a strategic business plan that will help you grow your business in 2012.

Interview

Web Talk Radio

If you pay for health insurance, take a fresh look at your plan and see what options may be available.

Let your accountant or bookkeeper know what is going on in your business.  Too often, clients will not let us know about something important until the end of the year or worse, when tax filings are due.  Keeping communication open is very important.

What is Ahead in 2012?

There are a number of tax provisions set to expire at the end of 2011 and 2012. Be sure to take advantage of them if you can as there is no guarantee they will be extended. Such items as the limits on the 179 deductions (allows businesses to deduct the full purchase price of qualifying equipment or software purchased or financed during the tax year), bonus depreciation, tax rates on qualified dividends and long term capital gains and lower social security withholding. Make sure you look into these items as the end of the year approaches.

Knowing what makes up cash flow is the first step to avoiding a cash crisis. The majority of business owners believe their cash flow is the revenue they generate less the expenses they pay.

The answer lies in the fact that the accounting rules that govern the creation of a financial statement are not tracking the flow of cash through your business. The statements are focused on measuring profit or loss – NOT cash flow.

The P & L (Profit and Loss) is the net income. Net income does not tell you what happened to your cash balance through the period in question. It defines net income based on the accounting rules that were used to create the income statement.

Many cash flow items never show up in an income statement while other cash flow items will show up there but in different periods and in different amounts. You will find that an income statement will not show what happened to cash flow. Cash flow is made up of more than just profit and loss.

Things affected are:

• Accounts receivable
• Inventory
• Accounts Payable
• Capital Expenditures
• Borrowings and debt service

Therefore, a business cannot look at an income statement and see what happened to the cash during the month. Profit and Loss is only one component of cash flow. A business has to have a clear picture of how each of the other areas affect cash flow each month in order to understand and take control of cash flow.

An example:

 Recently, a client could not understand why his income statement said he made money last year but he didn’t have enough cash to pay all of his bills. In this case, the difference between his net income and his cash flow was a result of the purchase of a truck for cash, sales made during the period that were not collected (accounts receivable), an estimated tax payment made an amount different than tax expense for the period, a distribution to the owner, and payments on a bank loan.

As you can see the rules of accounting determines when transactions are recorded in the financials and how they are recorded.

The reality of business determines when cash is received or when cash is dispensed.

In addition to having a P & L that governs accounting life, it is important to keep a schedule that governs monthly cash flow. The secret to taking control of cash flow is to have an easy to understand view of each component of the business that affects cash flow. The cash flow schedule needs to show what is going on with each of the components of cash flow as mentioned above.

Learn more about how to review cash flow with a free consultation. Call to schedule a review of your cash flow and receive my newly created cash flow spreadsheet customized for your business.

The end of year is an important time for small business owners to get organized and start preparing for tax time. Below is an outline to help you prepare your accounting records so you can be up to date by year end and ready to start fresh in 2012.

Enter final transactions

• Compare your 1040-Schedule C from prior years to this year’s expenses
• Enter all cash receipts for business expenses
• Reconcile all your accounts and enter any missing transactions
• Work on reducing your receivables
• Write off bad debt
• Make SEP IRA or 401K contributions and donations to charities to reduce taxable income
• Make all asset depreciation entries for equipment that is on a depreciation schedule

Get organized for your CPA

• Ask your CPA which reports and documents will be needed for tax preparation and if year- end reports should be on a cash or accrual basis
• Organize statements and receipts for expenses that will be itemized on your Schedule C/1040
• Print out a copy of your general ledger
• Back up your files to prevent any data loss
• At the end of the year send a copy of your Income Statement and Balance Sheet to your CPA to get an idea what your taxes will be
• Review your budget and begin developing 2012′s budget

Employees and independent contractors

• Order W-2 and 1099-MISC forms early
• Get independent contractors and employees current mailing address, Social Security numbers and total payments made to them for the year

I hope these tips have been helpful to your business. To learn more about virtual bookkeeping services visit our web site at http://www.youradministrativesolutions.com. Email fran@youradminstrativesolutions.com or call 866-363-5580 for a free consultation.

Managing your books is a cumbersome but critical task for any business. It is very time-consuming, frustrating, and could mean working late hours. However, it has to be done to know the worth of your business and to satisfy the government for taxes. You also need to do this on a regular basis to get an accurate idea of your financial health.

How do you make this a stress-free task work for you?

Some small and medium businesses either employ part-time bookkeepers or do the work themselves. No matter how it is done it is still a mundane task involving shuffling papers and working extra hours. Often there is a twinge of doubt that you are not doing something quite right or are missing important information.

Ask any entrepreneur why they went into business and you’ll get a hundred different answers. Odds are that “do bookkeeping” was not on the list even though bookkeeping is the core of any successful business. It is the way to measure growth, keep cash flow positive and track expenses.

Bookkeeping is like learning to play a musical instrument. The secret is to learn the fundamentals and create a system that works for the company.

Here are a few tips that could prove helpful to make the right decision for bookkeeping and accounting needs:

Don’t mix business and pleasure:

Get a business credit card to enable you to separate your business expenses from your personal. By this time you have already started your business checking account. So adding that business credit card will help you establish and build business credit and points. Co-mingling funds between personal and business is not a productive or efficient way of doing business and can prove to be a headache at tax time.

Keep it simple:

When creating your business in your accounting software don’t create too many categories in the chart of accounts. For example, office supplies will be a sufficient category rather than separate categories for paper, letterhead, printer supplies, etc. This complicates profit and loss and adds time to the day-to-day activities when items are being expensed.

Automate your invoicing:

There are many online invoicing services that allow you to schedule invoices for clients who are charged on a regular basis. You will find that most accounting software has the ability to memorize invoices that reoccur monthly. The day of the reoccurrence can even be set such as the first of the month.

Use the right accounting software:

There are many accounting software packages out there that you can use to assist you with your accounting and bookkeeping needs. Of course, I highly recommend QuickBooks but there is also a wide variety of Open Source software which is free to download. Additionally there are a wide variety of free manuals and tutorials online.

Outsource to a virtual bookkeeper:

Outsourcing to a virtual bookkeeper saves time, money, worry, and headaches. Many business owners take two common approaches to tackling the issue of bookkeeping. They try to do it themselves – which is time consuming and can lead to costly mistakes. They pay large firms to do it – which is unnecessarily expensive. A professional bookkeeper has the skills and experience to do the job right. There are many advantages to outsourcing your books. Save money, save time, and the need for extra help. The biggest benefit is your bottom line.

• Books that are inaccurate do not reflect the true health of the business
• Being clueless at any level about where the money is going is not being in control of your business.

Business people need to focus on the business:

There are many aspects to running a business and the most important is earning money. Some things just have to be delegated in order to maximize time and productivity. Bookkeeping can be a painful and time consuming process and many business owners do not have the expertise or knowledge to get the job done right. Time spent on bookkeeping activities is time away from making money.

I hope these tips have been helpful to your business. To learn more about virtual bookkeeping services visit our web site at http://www.youradministrativesolutions.com. Email fran@youradminstrativesolutions.com or call 866-363-5580 for a free consultation.

Psychologist and Life Coach Dr. Melissa McCreery focuses on the three Os that ambush successful, high-achieving women—overeating, overwhelm, and overload at http://TooMuchonHerPlate.com . Beginning November 14, 2011, she is sponsoring a massive giveaway for women who want more ease, joy, and success in their lives and their work. Come claim your gifts from November 14-21 at http://TooMuchonHerPlateWeek.com .

Indulge is NOT a Four Letter Word

By Melissa McCreery, PhD

If you are like most busy women with too much on their plates, one of the most important things you can do for yourself is to practice indulging—really indulging.  Interestingly, most women who really need to indulge more will tell you that they believe they ought to be indulging less.

What’s this about?

Let’s get really clear about what indulging is.

From my perspective, to indulge means to allow yourself to experience something really wonderful. Indulging comes from a place of compassion and kindness and respect. It’s a gift, freely given. Indulging means to allow yourself to enjoy fully. It means to thoroughly experience something and soak up and savor the experience. An indulgence is not a candy bar from the vending machine that you shove into your mouth while driving to your next appointment. It’s your favorite food on a beautiful plate in a setting where you can truly savor it.

Indulging isn’t just about food, but it’s something that feeds our senses in a wonderful way. You might indulge in a bubble bath or a foot massage or a solitary walk in the woods. Your indulgence might be your favorite CD played in your car or fresh flowers on your desk or a glass of red wine enjoyed on your deck.

Indulging is a full-body-use-all-your-senses experience.

It fills you up, brings you joy, refuels you and adds color to your life. Indulging feeds your soul and is a necessary ingredient for thriving. Your inner champion, or what you may think of as your “best self” absolutely purrs when she is indulged.

So why does indulging have such a bad rap? Why do so many women think that indulging is selfish or nonproductive or just plain wrong?

I’d like to bust some myths about indulging, and while I’m at it, let me remind you that many bad habits such as overeating, procrastination, and spending too much time online or “not doing” what you really need to do, happen because you aren’t indulging enough.

When your spirit and soul aren’t being fed, you will grasp at straws (or potato chips or chocolate chip cookies) to try to make up for it. When you don’t allow yourself to truly indulge, you will find yourself reaching for poor substitutes that might help you feel better temporarily, but that don’t make anything better in the big picture.

Here are some more truths about indulging:

1.      Indulging is not about greed or sloth. Indulging isn’t about excess. It’s about allowing yourself something wonderful or special and allowing yourself to really experience and savor it–without guilt or shame. It’s not eating the whole box of cookies or bingeing on clothes at the mall. It’s about allowing yourself just the right amount of what you really crave and fully enjoying the experience. Indulging is not about gulping, it’s a melts-in-your-mouth experience.

2.      Indulging is not laziness Indulging is a way of feeding an important part of yourself and adding dimension to your life. Some women worry that if they start to indulge they’ll “lose control.” The truth is, when you really allow yourself to indulge, you tend to be more satisfied with less.

3.      Indulging does not have to be earned or “deserved.” Some women believe that they haven’t “worked hard enough” or “accomplished enough” to indulge. When you don’t allow yourself this kind of self-care, it’s easy to become caught in a cycle of working harder and harder and feeling more and more behind and burnt out. Again, indulging yourself is a way of refueling. It actually enhances your productivity.

4.      Indulging does not decrease your productivity or make you fat. I’ve already addressed this, but this is such a common myth, it’s important to restate. Allowing yourself truly indulgent experiences, ones where you are completely present and savoring the moment, satisfies you. Real indulgences don’t leave you hungry and craving more—they rejuvenate you and fuel you to be your best. What does leave you primed for a binge of food or laziness is the feeling that your special treat is forbidden or undeserved. The message that you are never going to be allowed to rest or feel like “enough” or eat chocolate again will almost certainly create a craving for the forbidden that can be almost impossible to resist.

My challenge to you:

Start indulging. Make a list of things that you experience as special treats. Keep it somewhere where you can add to it as new ideas occur to you. Begin scheduling these into your life on a regular basis and enjoy.

Take good care,

Melissa

Deductible car expenses can include the cost of:
Traveling from one workplace to another
Making business trips to visit customers or attend business meetings away from your regular workplace
Traveling to temporary workplaces.

To claim the deduction, keep complete and accurate mileage records, Two methods are available for claiming business car expenses:

Actual Expenses: Add your annual car operating expenses, including gas, oil, tires, repairs, license fees, lease payments, registration fees, garage rental, insurance and depreciation. Multiply the car operating expenses by the percentage of business usage to arrive at your deductible expense. Business-related parking and road tolls are fully deductible expenses that do not have to be reduced by the percentage of business usage.

Standard Mileage Rate: The 2011 standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are on IRS.gov, search: standard mileage rate.

Travel Expenses
Travel expenses are “ordinary and necessary” expenses while away from home for the primary purpose of business. Keep all receipts and relevant documentation to substantiate where you went, why, for how long, and amount spent. If you combined business and personal travel, show how much is related to business.

Lodging receipts: These should show the travel location, duration of your stay, costs and expenses. Keep records for cleaning and laundry, telephone charges, tips, and other charges not shown separately.

Transportation receipts: These include airplane, train or bus ticket stubs, travel agency receipts, rental car or taxi receipts, etc., showing the amounts, dates and destinations.

Meal receipts: Generally, you must keep a log of your meal expenses and save receipts for amounts of $75 or more. Either track the actual costs of your meals, or use the standard meal allowance, if you qualify. You may only claim a deduction for 50% of the un-reimbursed cost of your meals.

Every week, take 15 minutes to file your receipts. This can be as simple as stuffing them all into one file, or sorting them by category. Do what works best for you, but do it. Having all your receipts in one place means that you won’t lose them. A bit of effort over the year will ensure that tax time is not a stressful time and you get all your deductions.

If your home phone is also your business phone, take the time each month to go through your phone bill with a highlighter and highlight all of your long distance business calls. You get to write off a portion of your basic phone charges if you work from home. Many small businesses lose this as a business write off because at the end of the year they can’t remember which calls were for business.

Take time to staple receipts and bills that are more than one page long together. This will save you and your bookkeeper time at the end of the year.

Keep a file pouch in your vehicle or in your briefcase for receipts. Throw your receipts in the pouch as you get them. When it comes time to do your books, finding your receipts should not be as treasure hunt.

Last know when your bookkeeping deadlines are.

Office:  Keep your receipts, software, computer, tools, maintenance and repairs, office rent (If you rent a space from someone else) If you work from your own space, you are entitled to deduct a percentage of your mortgage interest or rent based on the percentage of space dedicated to your business (if you have a desk in your kitchen, you cannot use this deduction because it is a shared space), printing of business cards, forms, letterhead etc.

Business: business license, business tax, and business fees.

Insurance: Building, and vehicle.

Meals and entertainment: You can write off 50% of your meals and entertainment if you are with someone related to your business (clients or potential clients, suppliers, or employees) – write down the names of the people that you entertained and why, and don’t forget to write in the tip amount. Make sure that the amount is reasonable in relation to your overall income. If your entertainment expenses are a huge percentage of your gross income, a red flag could be raised, and you could get audited. This is a deduction that is abused, and if you are audited, be prepared to have the names on your receipts to verify that business took place.

Motor Vehicle expenses: If you use your vehicle for your business you can write off all, or a portion of you motor vehicle expenses.

This is just a handful of the receipts you need to keep track of for your business.

Maintain daily records. If you don’t keep accurate daily records, you don’t have an accurate way to track the financial condition of your business.

Handle and review checks carefully. Take the same care with checks as you would with cash. Sign, using a clear, distinctive signature that won’t invite forgery. Review canceled checks before anyone else, including your bookkeeper or employees.

Get a bank statement with a month-end cutoff. This is a basic tip that can reap big rewards. This will make it much easier to reconcile your statement and track expenses.

Leave an audit trail. Your record keeping will be much more effective if you have a system that allows you to quickly and easily retrace your company’s financial activities. Keep your invoices and checks in numeric order, not skipping check or invoice numbers, and keeping separate bank accounts for your business and personal funds.

Use a computer. Computer bookkeeping software is absolutely essential for all but the smallest businesses.

Use the right accounting system. Most businesses use either cash-based or accrual-based accounting. If you use the cash method, you count income when you receive it and expenses when you pay them. Under the accrual method, you count income and expenses when they happen, not when you actually receive or pay them.