Category Archives: Money Management

Your Budget: A Roadmap for the Year

by Kelly Deis of SoundPoint Consulting

It’s that time of year again. Most businesses are on a fiscal year which coincides with the calendar year. It is time to look back and reflect on 2017 as well as look forward and create a budget for 2018.

A budget is a roadmap. Based on where you have been, it can help guide you to the desired final destination for year-end.

If you stay on the current course – where will you end up? Alternatively, if you change the route – where will you be at the end of the year? It is up to you to decide which path is the most profitable and most likely to be achieved.

Here are a few things to think about as you prepare your budget.  Continue reading

Ask SCORE: As a business owner, how should I pay myself?

This is an excerpt from an article by Hal Shelton for score.org. Read more here.

Pay Strategies

Depending on the maturity of your company and your plans for the business, you may adopt different compensation strategies.

  • Start-up mode: It is typical for a start-up to be cash-flow negative in its early months, if not years. This results from one-time start-up expenses like buying equipment, building out a facility, stocking inventory, marketing to attract customers, building products or websites, legal and accounting costs, and rent and utility deposits. Also at start-up, there are no or few customers. As such, during these times, your compensation will be light as there are no funds to pay more. Hopefully, you had prepared a business plan, including a cash-flow forecast, so you knew the range of your compensation during this period, and if there was not enough to “live on,” you have made other arrangements.
  • Lifestyle vs. ramp and sell: If you intend to own and operate your company for many years, which is what 95 percent of entrepreneurs plan, then you will want to develop, over time, a predictable compensation plan both to meet your personal needs and be predictable for yourself and the company.

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What Tax Records Should You Keep… And For How Long?

tax-records

Except in a few cases, the law does not require any specific kind of records. However, you may want to include all of these items, no matter what process of recordkeeping is chosen:

  • Business checkbook
  • Daily summary of cash receipts
  • Monthly summary of cash receipts
  • Check disbursements journal
  • Depreciation worksheet
  • Employee compensation record
  • Any financial statements

Also, be diligent in keeping these records as well, whether it be the original source documents OR electronic copies:

  • Gross receipts
  • Inventory
  • Expenses
  • Travel, transportation, entertainment & gift expenses
  • Employment taxes
  • Assets
  • Cancelled checks

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