Bulletproof Accounting for Long Term Business Survival
Diane and host of The Best Business Podcast, Daryl Urbanski, reveal proven “success habits” that small and medium-sized business owners can use to leapfrog the competition and thrive.
Why this matters to you: In this podcast, Diane delivers some simple (and high-value) startup and accounting system tips that can result in impressive business improvements.
Listen to this podcast to learn what you can do to help your company boost its chances of success and prosperity.
Diane Gilson is the featured guest of host Daryl Urbanski in this episode of The Best Business Podcast. The presentation’s main discussion points focused on Diane’s top tips for people who are starting out in their own businesses. She has great recommendations regarding critical “accounting system” requirements, as well as pointers describing typical trouble spots and mistakes to avoid.
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Click here to get your free Best Business Podcast Workbook with Diane Gilson from Daryl.
Key topics covered in this recording include:
Pointers For People Starting Their Own Businesses:
Diane provided advice for new business owners, including:
- Reduce your overhead as much as possible.
- Don’t undercut your competitors because your competitor has a reason for charging a higher rate!
- Understand your costs so you can be sure you make a profit on every job you take on after you take into account all the related costs. This means you need to understand your numbers.
- Don’t get distracted by “income numbers” because you don’t want to just break even. If your company just breaks even, you can make more money by working for someone else!
The Biggest Trouble Spot for New Business Owners:
The biggest trouble spot Diane sees is the concept of “Let’s look at the money LATER.” She says that just because you back-burner something doesn’t mean the heat’s not on (and things can burst into open flames at any time!) Diane gave several examples of money-related areas that can cause problems if not taken into consideration.
What a Simple or “Small” Accounting Process Looks Like:
- Diane says businesses can start (for the first few months) with something as simple as using a spreadsheet.
- Cash basis accounting: This means keeping track of what you’ve spent.
- Accrual basis accounting: This means keeping track of what you’ve committed to spend. such as credit cards, checks, ATM spending and so on.
- She recommends that – in the long run – getting some sort of accounting software will be helpful. You should use the accounting software yourself first. If you do:
- You’ll save money!
- You will learn what is going on with your books and what you should be looking for.
- You’ll then understand how things work when you bring someone else on to do your books.
- You should learn what important accounting reports look like, including:
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- Balance Sheet reports
- Profit and Loss reports, and
- Job Cost Reports.
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- What to look for in your reports:
- Learn what has been input (recording transactions)
- Review the output (Summary reports and Detailed reports)
- At a minimum, you should review reports weekly. Waiting for a month is too long to let this go.
- You should review reports regularly, even when you bring someone else on board.
What Accounting-Related “Things” You Need for Your Business:
- You need to have a structure in place. This includes:
- Chart of Accounts
- Item List (in QuickBooks)
- Customer Job list
- You need training to know what to look for in your reports.
- Before you can rely on your reports, you need to go through Month-end closing procedures. This includes proofing and balancing and closing the books so you can believe the numbers and reports.
- If you have questions about the numbers, the person who is handling your books should be able to provide you with a valid, reasonable explanation without having to delay for very long (to prevent fraud).
Biggest Mistakes
In addition to not having a budget, Diane says the following “Biggest Mistakes” she sees are:
- The business owner does not understand the reports. This can be due to:
- Not looking at the reports
- Not understanding what they should be seeing
- Not taking corrective action or
- Being unable to use the reports because they don’t want to admit they don’t understand them. Diane recommends thinking of learning about the important reports like having an athletic coach (as an athlete).
- Belief that (higher) sales volume will earn more money: However, when you increase sales, you have to have more costs, including higher employee costs, and higher risks.Instead, get a good understanding of the cost of production, get the right gross profits on individual jobs, and consider specializing. Get good financial projections BEFORE taking on higher sales (and related higher costs).
Diane’s Thoughts on the Future:
Diane understands that it’s impossible to predict what’s going to happen. HOWEVER, she does provide some excellent advice:
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- Listen to your customers
- Keep an eye on your numbers
- Serve the right market
- Stay flexible and figure out how to use the current circumstances to pivot as needed.
- Be involved with your niche’s organizations and collaborate with others in your field.
At Info Plus, we offer a wide range of affordable workshops and training specific to job costing using software such as QuickBooks® desktop and Excel. We love teaching and coaching, so if you’re ready to learn, we’re here for you.
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Customer Praise For Diane Gilson, Info Plus Accounting, and BuildYourNumbers.com
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From the Intuit FindAProAdvisor website:
“Diane has provided incredible insight to the processes we created. She gave critical guidance that assisted our CPA as well as our procurement and accounting team. Diane would receive a rating of 5+++++++. Tremendous asset to our company.”
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