Once again we hit that season where the days get longer, there is a spring in people’s step, and the tax man arrives. This is the time of year that arrived last year and has arrived every year and you promised you would get organized and lower the tax bill to help your business run better. The truth is you forgot as you have done in the past. So what will change this year? Is it finally time to get things organized and improve for the year ahead?
Many entrepreneurs are so used to keeping things afloat that they lose money in areas that lack attention. For instance if you are just putting receipts into a shoebox and not entering them into some type of journal or software program then you may not have an idea of how much your expenses are costing the business. If you take that same shoebox to your accountant to sort out for you, you are spending double the money for that service that you would have if a bookkeeper sorted those out for you. What about your maintenance receipts for the truck, how much have you spent on maintaining that truck over the last year? If you don’t know that number then you may be wasting money or it may be costing you to hold on to that baby of yours? Can you match up receipts and information with statements and invoices or are you always behind the eight ball in knowing how much money you bring in every month?
Not everyone is organized and if that is you then you may need to find someone to help you get organized. One of the best ways of shooting yourself in the foot so to speak is to find the reason you should get organized. It is very hard to start something new if you don’t know why you are starting it in the first place. What is it you wish you had known from last year? Is fuel costing you more than it should? Upgrading to a truck with better fuel mileage may be a solution. Did the truck break down more than you should be and it’s costing you down time? Again looking at why you want the answers will help you get started with a solution. Where to start is the question that most people may have and need the most help with. Making a plan of attack is the best thing to start with. Write down those questions that you need answers to and that will help you get started. For instance if you want to know how much you have spent on truck repairs and all you have is a shoebox of receipts the first thing to do is get those sorted out. You did keep them didn’t you? Now I know you don’t like to sort out receipts, that is why they are in the shoebox, but your accountant will charge you $100 per hour when it can be done for much cheaper. Either do it yourself, hire a bookkeeper, or find someone responsible to sort them out for you. Adding those receipts up will give you a total for the year provided you have them all, but you need to find a data entry program so they can be tracked all year. A small operation can get away with a hand written ledger, but there are many software programs that can help you with that inexpensively. Think long term and it will help you move to a more stable operation.
As they say the numbers never lie and that is the truth. You will see a big jump in your business once you start directing the business using actual numbers rather than guessing at what you think the business is actually doing. It will help you make informed decisions allowing you to work on the business instead of in the business. The key is organization and the rest will fall into place.
About the Author
Bruce Outridge is a transportation consultant with over 30 years of experience and author of the books Driven to Drive and Running by the Mile. For more information on Bruce or his work please visit his website at http://www.outridgeenterprises.ca