Dollars & Sense: 3 Financial Tips for Your Wedding Business

By Michelle Loretta, Sage Wedding Pros, MiamiAccounting, money, spreadsheets—do those words induce a pain in your gut? Finance doesn’t have to be agonizing or intimidating. Knowledge is power. And, knowing what your money is doing can give you incredible strength. The following tips will help you navigate your financial strategy as a business owner.1. Be Organized.Accounting for your business is much more about managing paperwork than it is about having a degree in higher math. Here’s a quick and easy method for being organized:• At the beginning of each year, mark 12 file folders with the 12 months of the year. (As you spend money on your business, stick the corresponding receipt in the folder for that month. You want to keep receipts not only for tracking purposes, but also in case you are audited by the Internal Revenue Service or other government agency.)• Keep a small organizer in your purse or wallet for holding business receipts while you are out and about. When you get back to your office, slip those receipts in the corresponding month.• Have a folder in your email where you can place all of your e-receipts. (It may be a good idea to print them from time to time and slip them into the month’s folder. It’s best to have them in a centralized location.)• Keep your personal and business finances separate. In addition to having a separate bank account for your business, make sure you do not use personal funds for business expenses (and vice versa). If you do, then you must understand how to properly record the transactions.Remember: these tips are not only about making your life easier, but about being prepared if you are audited. When you claim income from a business, the government may want to make sure that you are properly stating your profits on your tax filings.2. Commit to One Day Each Month for AccountingPick the first Tuesday of each month, or another consistent day, for your accounting and finances. This is the day for you to record your transactions and analyze results. It’s also a good time to update your expense budgets and review your sales plan. (We do recommend that you have an expense budget and sales plan.) On this day:• Print out your bank statement. Make sure you have receipts for every expense shown on the bank statement (this is when it’s nice to have the monthly folders set up.) If you’re missing a receipt, make a note on the bank statement (and try to get a copy).• Use the bank statement to guide you in recording:o sales for the month.o expenses for the month.• If you are in the start-up phase of your business, keep it simple: Usea spreadsheet to track sales and expenses. (One tab of the worksheet for each.)• If you’ve been in business for a while and are managing more than 25 transactions per month, use accounting software. Quickbooks is tried and true and will grow with your business.• Review results. Compare sales minus expenses to determine your profit or loss for the month. (With accounting software, you will print the Profit & Loss Report. With a spreadsheet, you will calculate: “sales – expenses = profit or loss.”3. Hire Professionals.You can’t do everything. Know your limits and hire people to help build your business. (You expect engaged couples to hire you as an expert, don’t you? Hire a professional to do what they do best.) We recommend the following in order of importance:• A tax accountant advises you on tax issues and files your taxes. Taxes are complicated, always changing, and costly. Not only can it be confusing, but also incredibly time consuming. A tax accountant can advise you on whether it’s better to be an LLC or Corporation, whether you should hire a contractor or employee, whether you should donate to a nonprofit. Tax accountants are amazing. Get recommendations and referrals. CPAs are certified and vetted. But, a good tax accountant doesn’t always have a CPA.• A bookkeeper manages your accounting transactions (Quickbooks). Once you are profitable and want to hand over your accounting transactions to someone, consider outsourcing this to a bookkeeper. A bookkeeper inputs transactions into your software. They don’t need to be hired full-time by you, which can be costly. A bad bookkeeper can complicate your business horribly. Get someone who knows accounting and comes with rave reviews.• A financial coach/strategist helps create your business’ financial strategy. When you reach the point in your business where you have higher-arching goals you want to achieve, it’s time to hire a financial strategist. This is someone who can create financial models for your business and guide your next steps. A good financial strategist understands your industry and business and will look at all aspects of your business (not just the numbers).See? Simple! There’s not even one calculus problem involved. Don’t overcomplicate your business—stay organized, commit to knowing your dollars, and get help when you need it. Easy-peasy.Resources:Download the Accounting 101 resource guide and a number of accounting templates at: http://www.sageweddingpros.com/downloads/.Quickbooks Online is great for recording your accounting transactions. It’s tried and true, and the online format is easy to use: http://quickbooks.intuit.com/.The following book offers easy-peasy accounting education: Accounting Made Simple: Accounting Explained in 100 Pages or Less by Mike Piper.