Cohen Consulting Group

Mid-Year Review

July 5, 2019 by Mandy Leave a Comment

Can you believe that half of 2019 is gone already? That means it’s a great time to take stock of how your business has done for the first half of 2019 so that you can meet your financial goals for the entire year.

On Track for Sales

Are you on track to make your 2019 revenue number? The first step is to check your 2019 budget numbers for total revenue. (Don’t have a budget? – Check with us; we’d be delighted to discuss that service with you.)

Next, get your Income Statement for June 2019 Year-to-Date and check the revenue figure. Are you on track with your budget, or are you halfway there revenue-wise, accounting for seasonality? If so, pat yourself on the back! If not, what promotions will you put in place to boost your growth for the rest of 2019?

On Track for Profit

Looking at the same Income Statement, check your net income figure. Are you on track with what you planned? If so, great! If not, the reason is simple: it will be either lower sales than expected or higher expenses than expected.

If your expenses are too high, you’ll need to drill down into each of your expense accounts, including cost of goods sold, to see which ones are higher than expected. Were there some unanticipated costs? Does your pricing need adjusting? Do you need more volume to cover your costs? This is where we can help you with an analysis of where your opportunities are to increase profit.

On Track for Cash

One more place to look is your cash balance. It can be uncomfortable when you are running short of cash for your business. If your balance is lower than you’d like it to be, it could be because of some of the factors mentioned above. It could also be because you just purchased an asset like a truck. If you need help with improving your cash flow, that’s another thing we can help you with.

Mid-Year Review

This mid-year review can help you head off any small problems before they grow into big ones throughout the rest of the year. And it can keep you on track so you can meet your 2019 business goals.

Filed Under: Budget, Business Development

5 Ways to Speed Up Your Cash Flow

March 14, 2019 by Mandy Leave a Comment

One of the biggest challenges for small businesses is managing cash flow. There never seems to be enough cash to meet all of the obligations, so it makes sense to speed up cash flow when you can. Here are five tips you can use to get your cash faster or slow down the outflow.

1. Stay on top of cash account balances.

If you’re collecting money in more than one account, be sure to move your money on a regular basis when your balances get high. One example is your PayPal account. If money is coming in faster than you’re spending it, transfer the money to your main operating account so the money is not just sitting there.

2. Invoice faster or more frequently.

The best way to smooth cash flow is to make sure outflows are in sync with inflows. If you make payroll weekly but only invoice monthly, your cash flow is likely to dip more often than it rises. When possible, invoice more frequently or stagger your invoice due dates to smooth your cash balances.

Take a look at how long it takes you to invoice for your work after it’s been completed. If it’s longer than a few weeks, consider changing your invoicing process by shortening the time it takes to send out invoices. That way, you’ll get paid sooner.

3. Collect faster.

Got clients who drag their heels when it comes to paying you? Try to get a credit card on file or an ACH authorization so you’re in control of their payment.

Put a process in place the day the invoice becomes late. Perhaps the client has a question or misplaced the bill. Be aggressive about following up when the bill is 45, 60, and 90 days past due. Turn it over to collections quickly; the older the bill is, the less likely it is to get paid.

4. Pay off debt.

As your cash flow gets healthier, make a plan to pay off any business loans or credit cards that you have. The sooner you can do this, the less interest expense you’ll incur and the more profit you’ll have.

Interest expense can really add up. If you have loans at higher interest rates, you might try to get them refinanced at a lower rate, so you won’t have to pay as much interest expense.

5. Reduce spending.

You don’t always have to give up things to reduce spending. Look at your expenses from last year and ask yourself:

What did you spend that was a really great investment for your business?
What did you spend that was a colossal mistake?
What do you take for granted that you can cut?
Where could you re-negotiate contracts to save a little?
Where could you tighten up if you need to?

Managing cash flow is always a challenge, and these tips will help give you a little cushion to make it easier.

Filed Under: Bookkeeping, Budget

How to Save More in 2019

January 17, 2019 by Mandy Leave a Comment

Many people in their retirement years have regrets about not saving more during their earning years, but you don’t have to be one of them. All you need to do is be realistic and proactive about saving. It’s all about paying your future self.

Circumstances can arise that can erode savings you hoped would be there for retirement. Some of those events include not being able to work due to poor health or a bad job market, unanticipated hospital bills, a divorce, overestimating Social Security benefits, bad investments, procrastination, and simply not realizing how much you need to live on.

The good news is you can prevent future regrets by making a strong savings plan now. As a small business owner, you may not have a retirement plan, so it’s essential that you create one for yourself. You earn an income today. Put some of that income toward paying your future self, and pay that “bill” first each month or each paycheck.

To be proactive and build as much savings as possible, take these steps:

Increase your financial skills by learning how to fund your retirement, including all that traveling you’d like to do.
Take care to manage your investment risk and be realistic about investment returns. In good markets, purchase rather than rent or lease so you are building an asset.
Put as much aside as you can, and try living just below your means.
If you do have periods where you are out of work, try living frugally until your income is back to normal.
Optimize your business profits and apply some of them to your savings plan.
Minimize taxes where possible so you can keep more of what you make.
Make everything work twice as hard for you:
1. Get credit cards with loyalty programs.
2. Sign up for frequent customer programs to earn points.
3. Make sure your bank is giving you the best deal on interest.
Sell unused belongings on eBay and put the money in savings.
Cancel used subscriptions and memberships for both your personal and business needs and move the saved money to savings.
Periodically reach out to vendors to get a better deal on the expenses you incur. This could be for phone plans, utilities, and any other routine expense. Put the difference saved in savings.
Select cars and trucks with good gas mileage and also high resale value. Consider that using Lyft or Uber may be cheaper than maintaining a car, depending on how much you drive. Put the difference in savings.

There are hundreds more ways to save more, and these will get you started in the right direction for 2019.

Filed Under: Budget

Start the New Year with a 2017 Profit Plan

January 5, 2017 by Mandy Leave a Comment

planning Are you ready for 2017 to be even better than 2016? If so, take a few minutes to reflect on the questions below and take action to set your 2017 profit plan.

Question 1: What were the three best business things about 2016?

No need to re-invent the wheel. If you knocked it out of the park in 2016, can you wash, rinse and repeat these tasks in 2017?

If you’re having trouble thinking of three things, here are some hints:

What apps saved you time and money?
Did you make some good hires?
Did you let go of a bad hire or two?
Was there a marketing campaign that really worked?
Were there any events you went to that generated great ideas?
Did you add or remove products and/or services?
Did you buy new equipment or open a new location?

Summarize the three best things that happened in your business for 2016 and think about how you can repeat them to enhance your 2017.

Question 2: What were the three worst business things about 2016?

While we don’t want to dwell too much on our failures, we do want to learn from them. Think about the three things that are causing you to lose time, money or gain stress, and decide if you can make changes for 2017.

Question 3: What vision do you have for your business in 2017?

At the end of 2017, what has to have happened in order for you to have a successful year? Think in terms of metrics as well as intangibles, such as peace of mind and happiness.

Once you know your destination, the fun is in creating a roadmap to get you there.

Your 2017 Profit Plan

If your vision includes financial goals, then creating a profit plan is one way to measure your progress throughout 2017. Start by deciding how much profit you want to make in 2017. From there, you can compute your revenue goal and make a plan. Then you can add expenses to complete the budget. Here’s an example:

Let’s say you want to make $50,000 in profit for 2017. You can do that in a number of ways:

Generate $500,000 in revenue and $450,000 in expenses.
Generate $2 million in revenue and $1,950,000 in expenses.
Generate $150,000 in revenue and $100,000 in expenses.
And so forth.

From your profit number, you can create a revenue plan. A revenue should include how many items you need to sell. Like this:

	No. of units	Price	Revenue
Widget A	3,000	$200	$600,000
Part B	100	$2,000	$200,000
Service C	700	$1,000	$700,000
Total			$1,500,000

Once you have your revenue plan, you can fill in your estimated expenses.

You might be thinking that this sure sounds a lot like making a budget. And it is. But it’s far more fun to work on something called a profit plan than it is a budget. And if you need us to do the number-crunching part, please feel free to reach out any time.

Here’s to a very happy and prosperous 2017.

Filed Under: Budget, Business Development

Five Money-Saving Things to Do Before Ringing Out 2016

December 22, 2016 by Mandy Leave a Comment

accounting-binder Hopefully you’re having a wonderful December with all of the holidays and parties this month. And if you’ve spent too much on gifts and decorations, never fear. Here are six ways to save on your accounting and taxes. But hurry, you only have until year-end to cash in a few of these tips.

1. Check your profits

After adjustments, are your books going to show a profit this year? If so, you may want to try to increase business spending before year-end so you won’t have to pay as much in taxes. Consider accelerating larger expenditures to reduce your profits and therefore, your 2016 taxes.

If you pay your business expenses with a credit card by 12/31/2016, you can deduct the expenditures in 2016 even if you don’t pay the credit card bill until 2017.

There are many tips on business deductions, so check with us to get the full benefit.

2. Eliminate payroll headaches

If your payroll system is causing you pain and suffering, consider switching. Year-end is the best time because switching costs are lower and year-to-date amounts don’t have to be entered. You’ll still want your old system to generate January’s W-2s, but if you start writing 2017 paychecks out of a new system, it will give you a clean break.

And if you’re not sure what system to move to, we have answers.

3. Make January smoother

January is typically a bookkeeper’s busiest month of the year. Many tasks can be done early, such as checking to make sure your W-9s are current and ordering W-2 forms if they are needed. To avoid last-minute headaches, check with us to see what can be done early. It may help keep your accounting costs lower.

You may also want to consider automating more of your accounting system. Adding an app to your existing system may save you time and money in 2017.

4. Give to your favorite charity

Giving to your favorite charity may reduce your personal taxes if you plan to itemize your deductions on Schedule A of Form 1040.

There are many personal deductions that can help reduce your taxes, so check with us for options to minimize your tax payment.

5. Get ready for tax time

Start collecting the documents you need for tax time so they’ll be handy when you need them. You may be able to upload them to your accountant’s portal, or simply set them aside in a special drawer or folder.

Go through your receipts to be sure you communicate all your possible deductions. If you’ve had a major event, such as a move, new child, new marriage, or new job, be sure to mention it to us.

When all of the parties are over and the relatives have left, try these tips to save time and money on your taxes and your accounting in 2017.

Filed Under: Budget, Money

Budgeting Breakthrough

July 19, 2013 by Mandy Leave a Comment

budget When you hear the word “budget,” what do you think about? Most people would say something similar to “Ugghh!” If you would rather do just about anything besides create a budget, you’re not alone. The word “budget” brings up connotations of endless numbers, constraints, the opposite of freedom and creativity, and hard work, none of which are very desirable.

Yet, the benefits of a budget are huge. Budgets can help you with cash flow improvements, keep you on track for higher profits, and alert you to items that need further action.

From “Budget” to “Profit Plan”

To be successful with budgeting, we need to get rid of all of the connotations that go with the word. Perhaps it might work if we rename “budgeting” to “profit planning.” And then, rather than focus on how little we should spend, let’s start with how much revenue we’re going to make.

Revenue Clarity

It’s simple to create a revenue plan if you go backwards. What revenue goal would you like to hit this year? Just like we would never get in a car without a final destination, a revenue plan gives us a number to aim for in our businesses.

Once you know your number, then we can use averages to come up how many sales or clients we need to generate in order to meet our revenue goal. Here’s a quick example: Let’s say you want to reach $5 million in revenue this year. If you average order is $10,000, then you need 500 sales. If you have multiple products and services, then you’ll need to sum the product of the average sale times the needed number of sales for each line.

From there, you can make marketing and production plans based on the number of sales or clients you need.

Protecting Your Profit

Think of the expense side of your “profit plan” as protecting your profit margins so that you can ensure financial gain from all the hard work you do. Setting budget limits on spending will allow you to control overhead and other items so you can keep more of what you make.

Exceptional Reporting

A great “profit plan” report will provide several things. You can compare budget to actual, or better yet, just be alerted to the accounts showing exceptions. You can also get an income statement that compares the current period with the prior year period so you can see how far you’ve come. One last option is a benchmark report which provides industry averages so you can measure how you fare compared to other companies in your industry.

A “profit plan” is a great tool for your business. If we can help you with the process or provide you with custom reporting, please give us a call.

Filed Under: Budget, Business Development, Business Tips, Money