Tuesday, January 5, 2016
Do You Make These Money Mistakes in Your Resume Writing Business?
Most resume writers are better with words than numbers. If you're like me, you don't enjoy the finance and bookkeeping parts of your business as much as you do the writing part.
But we need to focus on the money side of things if we want to succeed in business. Here are eight money mistakes that many resume writers make in their business. See if you're making any of them.
1. Not Doing It At All. Many resume writers ignore bookkeeping entirely and try to get it all done the night before their taxes are due. This is a huge mistake for obvious reasons. Even if your resume writing business doesn't make much money yet, you could be missing out on some awesome benefits if you don't take this seriously. The fact is, you have to account for and record every penny you earn from all your business activities, all the time.
2. Not Saving Receipts. Every receipt should be saved. It's easy; just put them in a box after you note them in your bookkeeping software. (I keep mine in a file folder -- one file for each month of the year.) That way, if there is ever a question, the IRS will have the records.
3. Not Getting Expert Advice. Hire someone to help you set everything up so that you know you're doing it right. Some CPA firms will send someone to your location (even at home) to help set up the books so that you do it right, and they can easily do the monthly, quarterly, and yearly activities. (I used to pay my first accountant $25 a quarter to fill out my quarterly sales tax report. I asked my current accountant to teach me how to do it myself -- it takes 5-10 minutes and I save $100 a year by doing it myself now!)
4. Not Tracking Reimbursables. Your clients may reimburse you for some things -- for example, doing an email campaign to recruiters. Make sure you're tracking this as an expense that you paid (or marked up) so you're not paying taxes on the whole transaction as straight revenue.
5. Setting Up the Chart of Accounts Incorrectly. The chart of accounts is very important to accurate bookkeeping. Setting this up right will get you off to a good start and help you avoid money wasters and time wasters. (This is something I need to work on for 2016. My chart of accounts in Quickbooks has become kind of unwieldy over the past 6 years I've been using this version of the software.)
6. Not Reconciling Monthly. Each month you are supposed to reconcile your bank accounts and your bookkeeping accounts. This is an important habit to master because it will help you avoid mistakes. (And it will make doing your taxes easier too.)
7. Taking Money out of the Till. Even if you don't have a real cash drawer, taking out money from your business account and spending it on personal items whenever you want is a bad way to do business. Have a business account that is dedicated solely to the business. Only pay business expenses from it. That way, any checks or withdrawals for you will be profits you're taking from the business.
8. Lack of Automation. Today, you can automate so much, including expenditures that go on a particular card and are booked automatically into your accounting program. There is more, but you'll have to choose the software to find out what type of automation is available.
If you make sure you're not making these money mistakes, you'll have more of a chance to improve your business, spend more time working with clients (instead of working on your business), make more money, and keep everything organized so that you don't get overwhelmed.
Labels: Money Mistakes