As we inch our way towards June 30, are you starting to see the inevitable wave of ‘tax-time tips’ coming your way? And rather than making you feel organised and on your game, those all-too-familiar feelings of anxiety and inadequacy have you tying yourself in knots?
You’re not alone.
As an accountant-turned-financial-mentor, it was tempting to write a timely article about effective strategies for business tax planning. Don’t get me wrong: that’s important too. But the more I dive into the big feelings we have around business finances, the confusion and fear I see so many entrepreneurs suffering from is fast becoming the elephant in the room.
I’ve also been in the position of guiding one of my sons through a tricky learning difficulty when he was young; knowing how intelligent and capable he was made me realise that often, it’s the information we’re trying to process that just hasn’t been framed in a way that suits US. There’s nothing inherently wrong with us per se, we just need to digest complex ideas through our individual lens.
So instead of being another expert throwing around terms and tips and tricks that make you feel worse as tax time draws near, let me be the voice in the room saying what you need to hear: NOT as a business owner, but as a human being with insecurities, money mindset issues and ( in some cases) financial trauma.
Here are the 3 things I want you to know coming into EOFY this year:
Accountants have A LOT on their plates these days, especially when it comes to tax and end-of-financial-year:
With all that in mind, you can see why your lack of understanding is more annoying and inconvenient for them? When really, it should be an opportunity for them to engage.
Not an excuse for a crappy experience, but a reason why it’s happening.
I left the accounting space largely because of this erosion of what it was originally meant to be: the chance to develop alongside some amazing enterprises, offering insights and ideas along the way.
Now, the business owner eats last when it comes to getting the financial affairs of a business in order. And in that flurry and confusion, you’re made to feel as though YOU are the problem.
Clearly, accounting has gotten messy and the clients have been left wanting. Not through ineptitude or stupidity - you simply haven’t been brought along for the ride as the pace has dramatically increased, and as the path has become more complex.
What DOES lie with you - for better or worse - is the responsibility of bringing yourself up to speed.
You must reclaim ownership of your finances, and the story they’re telling about your business overall.
If I can help you remove your emotions from the situation, dispelling those feelings of failure and ignorance, you can rediscover your curiosity, reigniting your hunger for answers.
If you’re reading this, here is how I KNOW you’re capable of becoming the expert of your enterprise:
You built your business to what it is today. That isn’t for the faint of heart, the uninitiated or the ignorant. But somewhere along the way - well, maybe a lot of compounding ‘somewhere’s - you were talked out of your own capacity.
If by now you can REALLY see where you have been let down, it’s time to get proactive!
Start with the basics - I talk A LOT about the power of a tailored Chart of Accounts, one that reflects your business (not the sample business Xero dreamed up for selling its products). Get curious about how income and expenses are organised inside your business. Like most things in life, you only get out what you put in.
Quality data in, quality data out.
From there, take a good hard look at your Profit & Loss and your Balance Sheet. This is where your owner’s intuition comes into its own: if something ‘feels’ off, there’s a good chance it is!
Point it out to your bookkeeper, ask questions and get to the bottom of it. Tackle it together one red flag at a time. You don’t have to solve all the problems in one go, but the relief and empowerment you can feel from untangling that first knot is enough to make the exercise worth it.
I get it: it all sounds well and good, but peeking into Xero can still seem like a jumble of buttons and words on a screen (shoutout to all my dyslexic friends out there!) Well I’m here to do EXACTLY what you need: contextualising all this data so you can easily read it, understand it and most importantly, take action based on it. The first step is easy - just book a free introductory chat with me at a time that works for you:
| Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 30 minute chat with me: https://betterbusinessdecisions.com.au/ |
Now before you jump to your bookkeeper's defense and indignantly exclaim “that’s my mum / dad / wife / husband / best friend you’re talking about!” …
… here’s where our story begins.
I’ve had the privilege of working with many tenacious business owners who, from humble beginnings, have built empires of success that the world is all the better for having. It is in those ‘humble beginnings’ years that we are grateful for the support of friends and family as we launch our idea out into the universe.
Enter your mum, dad, wife, husband, etc.
I want to make it abundantly clear: this is a GOOD thing. Starting your entrepreneurial journey surrounded by those who you feel you can trust only makes the going easier.
BUT – as you may well know if you’re reading this – the road to business growth is paved with hard decisions. Often those decisions mean saying goodbye to the things that got us to Point A when the road to Point B calls us to level up.
But if you’re experiencing growing pains right now and you feel something is holding you back from hitting that next level, I’m asking you to remove your rose-coloured glasses for a moment. Switch exclusively into your CEO brain and objectively assess whether you’re currently in one of the following situations:
Not wanting to be sexist here; I understand that this can also be dad, hubby, your best mate, maybe even a sibling. But typically – from my experience – it’s mum or the missus getting the onerous task of organising that jumble of receipts, invoices and quotes to follow up when you’re just starting out.
In my early days of accounting, the wife ‘doing the books’ was actually a very successful model, especially for tradies and sole traders. But this was in an era where more of us could run our families on a single income, and so this was something that was more sustainable around the demands of running a family and a home.
Now, both with the costs of living and greater opportunities being made available to women, it is far more likely that she will have a full-time job, if not a career they are eagerly developing.
They’re a trusted confidant, an advisor, who may also be ‘great with numbers’ and hey, they’re probably free at this point! But you must be realistic about the needs of your business as well as their personal needs (which they might be hesitant to bring up for fear of letting you down).
Don’t make this decision from a place of “can I really afford a paid bookkeeper?” because if you’re getting the job done for free right now, the answer will immediately be ‘no’. Instead, I encourage you to think about it this way: “In order for my business to grow and reach greater potential, can I really afford to not have a professional bookkeeper?”
Do you have an administrative jack-of-all-trades currently handling your bookkeeping? Are they also helping manage your inbox, respond to enquiries, perhaps they’re posting stuff on your social media account in between answering phone calls?
Is it realistic that someone can be doing all those things to a high standard?
This next bit is going to be a bit of tough love from Liz, so brace yourself: if you’re allowing this to happen, you don’t fully appreciate how complex and critical the role of the bookkeeper is. And you need to fix that, fast.
Bookkeepers can be an incredible asset in your business, and often have an approach that is the complete opposite of entrepreneurs (which makes them a great complimentary brain to have around!)
They’re meticulous, detail-oriented, highly organised and often have a wicked recall for obscure facts and figures. If you’re a high-functioning entrepreneur flying around like a human cannonball as ideas need actioning and opportunities need seizing, it can be a real relief having a calm facts-and-figures person in your space to offer their point of view.
And this is the other critical factor: a trained bookkeeper who knows their stuff is far more likely to speak up if something is amiss – if anything, they’ll be obligated to do so.
However, your secretary / VA / jack-of-all-trades may not have the skills to notice if something doesn’t add up. Or worse, they may spot something going wrong and, thinking they are to blame through sheer lack of training (and let’s be honest, unrealistic expectations) they allow it to fester for fear of your reaction.
You may have already dipped your toe into the idea of having a bookkeeper, but in order to keep costs down you’ve opted for a newbie, someone with fresh qualifications who is eager to get started.
This is a GREAT way to give a budding bookkeeper the chance to develop. I applaud you for giving them a chance. But there is a lot to be gained from years of experience you’ll never get in a TAFE course.
Similar to the secretary situation, an experienced bookkeeper will know how to have tough conversations with you if the situation leaves the rails at any stage. A bookkeeper with more experience – even one who specialises in your niche – brings with them a wealth of knowledge gained in other businesses. They’ve seen things before, good and bad, that you could benefit from. They’ll know when to flag something early, offering ways to streamline and improve.
Again, ask yourself: in order to create the business you want, what kind of day-to-day account keeping support do you need? Rather than looking at what your business can afford today, work backwards from what your ideal enterprise of tomorrow needs to get there.
This is NOT a call to clean the decks and start fresh, by any means! If you now feel you’re in the position where a professional bookkeeper is required, there’s a number of ways you can handle this tactfully.
Your gun secretary who seems to pick anything up and run with it, or your newbie bookkeeper eager to learn, can still have immense value inside your business - even after you relieve them of the pressure of high-level bookkeeping. So it’s important to make this clear to them so you don’t inadvertently get them offside.
As for your dear parent or partner, who has been your biggest supporter from the very beginning. Throw them a heartfelt retirement party: a delicious meal, a weekend away or something extra special to show them how much it’s meant to have them on your team.
Celebrate the fantastic milestone you reached together – the business you built is maturing, and it’s ready for the next stage of growth. I know that the conversation, whichever situation you’re in, might feel like the toughest one yet. But you might be surprised: you may be met with a HUGE sigh of relief!
The BIGGEST thing you need to keep in mind when working with a bookkeeper is that this is about you: making your financial records clearer for your reference so you can gauge the performance of your business and make informed decisions moving forward.
The bookkeeping landscape - how we organise, summarise and scrutinise our financial information - has changed dramatically over my time working in the accounting space. The tech can seem daunting, and the rules & regulations can feel like constantly moving goalposts.
Which is why it’s even more important to keep your needs as the highest priority. There are plenty of experts and support people who can help you with the tech, setting up software and ensuring your reporting is an accurate representation of your business.
The ideal scenario: that, at any moment you can easily access reports that elegantly & clearly show you the state of your business today.
Getting your financial sh*t together is my zone of genius. There’s nothing better than taking a business owner from flustered and confused to focused and clear. Whether that’s diving deep into your accounts or getting your tech stack and accounting people on track.
Just book a free introductory chat with me at a time that works for you: https://freestrategysessionwithliz.youcanbook.me
Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with - simply book a free 30 minute chat with me to get started.
Do you ever feel like the bigger your business gets, the more complicated things become? (You know, that whole thing you specifically set out to NOT let happen?)
With each stage of growth comes another wave of rules, need-to-knows and layers of complexity that make you cast your mind to the one-man-show days and wonder if it’s too late to go back.
But need I remind you, we don’t create bigger and more fulfilling lives by playing small.
So, how do you simplify and clarify as you grow, so you can lean into each exciting leap forward? Let me introduce you to my 7 Laws of Financial Joy.
Whilst I offer you these rules as a way to find greater clarity in your finances, they can easily become a lens through which all other aspects of your business become clear. And if you’re in the midst of another season of uncomfortable expansion, what better time than now to simplify, clarify, and move forward with greater ease.
What does it mean to truly believe in yourself, in your capacity to achieve what you set out to do? So often I see clients who have accepted the identity of being ‘bad at numbers’. This limiting belief can come from anywhere - a previous mistake, a poor influence as a child, or even from within ourselves.
Pause for a moment to consider what feelings rise to the surface as you think about diving into your numbers to better understand your business. Do you feel fear, anxiety, perhaps even anger holding you back? Take a moment to consider why those particular feelings have attached themselves to your finances. Trace your way back through your past experiences. You may find that your complete lack of faith in your abilities doesn’t actually have anything to do with you in the first place.
This can be challenging and confronting work. But on the other side of this lies your potential to be brilliant, if you only give yourself the chance. Work towards developing your self belief.
How darn good does it feel when you finally ‘nail’ that thing you’ve been working at? We find this kind of joy in all aspects of life - learning an instrument, training for a physical challenge like a marathon or competition, or even taking our professional skills to the next level.
When we set ourselves to learning something new, and then mastering it, we feel 10ft tall.
So what if I told you that similar success could be found in becoming the master of your numbers? Before you go dismissing that as beyond your ability (go back and read Law #1 again) you must remember that you are the foremost expert in your business. No one will ever know what those numbers mean within the context of your enterprise better than you.
If you struggle to engage with your financial data, consider reasons why this might be besides you just ‘not getting it’:
Commit to learning how to engage more smoothly with your numbers to begin the road to mastery - this is very much one of those woo-woo ‘the journey of a thousand miles begins with a single step’ kinda deals.
I see it all the time in my business advisory work - when the penny drops.
Confusion arises in many areas of business finances (so don’t feel bad if you feel like you don’t ‘get’ the seemingly obvious - I can almost guarantee you won’t be the first or the last!). GST can be obscure, moving from contractors to paid staff feels like a quantum leap, and preemptive tax planning sounds like the sort of pain no one goes through on purpose.
But all these elements, when tended to with patience instead of panic, can have an enormous positive impact on the short to long term planning inside every business. Knowledge is indeed power, and in the words of the great Maya Angelou, “when you know better, do better."
Time and time again I've seen business owners' eyes go wide, they light up and you can see in their face that it’s all just clicked into place. The sheer volume of times this has happened means that you too could be one critical conversation away from your very own breakthrough.
Marie Kondo and I seem to share a love of ‘sparking joy’ through thoughtful organisation. We both also seem to notice in our work how our clients hang onto that which may no longer serve them.
For my clients, that often looks like impractical systems and limiting beliefs. (Just when you thought we were done with the woo-woo stuff!)
I often describe how out-of-the-box solutions like MYOB, Xero and Quickbooks can be a double edged sword. These come with a preprogrammed chart of accounts that’s meant to be reflective of the average business as a starting point.
But really - what in the heck is an ‘average’ business?!
Simply changing the name of your accounts - and adding in some more specifics - can be a fantastic start to better organising your data. It’s the difference between ‘stuff I get paid for’ or ‘stuff I pay for’ to accounts labelled as ‘online revenue’, ‘sales through referrals’, ‘Facebook Ad Spend’, ‘Software Subscriptions’... you get the picture.
The second step is ensuring your bookkeeper is accurately organising everything on your behalf. It could be a valuable exercise to meet with your bookkeeper and accountant together to have a 101 level chat for everyone’s benefit. This might seem mundane, but making sure you’re all on the same page gives you the confidence to check their work and minimises the chance of any nasty surprises down the road.
This process also lends itself to developing that self belief and mastery we talked about in Laws #1 and #2.
This law is one of my favourites, because if you follow all of the other Laws this one happens all on its own.
When we have our finances in order, we can understand them with relative ease and we know we can put that knowledge to profitable use - that my friend is the very definition of financial confidence, in my books.
This is the end game for my clients and I, as it marks the beginning of a whole new chapter in the story of their business. One that sees them standing at the helm of their enterprise guided by their innate wisdom and self belief. They work with financial systems and support staff, whilst still feeling in complete control (rather at their mercy).
The business owners I work with often start their enterprise with the intention of leaving their mark on the world in a profound way. Whether this is through service to the community, revolutionising their industry or leaving their legacy in their work - helping them do so without fear of their finances is truly the greatest joy for me.
Prevention is better than a cure - this is no less true when it comes to the maintenance of your financial data.
If you’re establishing these laws in order, by this stage you will have the belief you can wrap your head around all this, the determination to learn and the systems structured with clarity.
The next step is regular check-ins to maintain order and keep topping up your knowledge. The idea of an end-of-month routine used to be a necessity before the tech boom hit the accounting space. But it was also inadvertently a healthy 30-day habit that kept the owner's finger on the pulse.
Make an appointment with yourself - or even your bookkeeper - to conduct a regular review of business activities and make this process a profitable routine.
You’ll note that your bookkeeper and accountant get mentioned fairly regularly in these laws. This is for the obvious fact that sustainable business growth means collaborating with the right people who have complimentary skills to yours.
These laws allow you to maximise the potential of those collaborations.
Getting your financial data well organised and relevant makes onboarding a bookkeeper a smoother process. It also makes it simpler to check their work and support them if they happen to miss something. Remember: they don’t have the top-down view that you do.
And as a Chartered Accountant myself, I can’t tell you what a joy it is to work with business owners who can speak confidently about their numbers. The energy they have invested in mastering their financial information elevates the conversations we can have, and together we can spend more of our time looking forward to their business’ future. Do you need help laying down these financial ‘laws’ in your business? To get started, Book a FREE 30 minute chat with me: https://betterbusinessdecisions.com.au/
| Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 30 minute chat with me: https://betterbusinessdecisions.com.au/ |
I’ve been in the ‘business of numbers’ since 1984, qualifying as a Chartered Accountant in 1990. 15 years into my career, I started to get a sneaking suspicion that something was missing.
The conversations I was having with business owners lacked a critical element, and it was affecting their decision making in their businesses, as well as the results I was trying to help them achieve.
Once I discovered this missing piece, I took it with me as I moved into business advisory, allowing me to complete the conversations I was having with my clients. Everything changed - my clients grew in confidence, they gained valuable insights into their enterprise through the lens of their numbers, and their lives improved.
That missing piece that was so critical to their success?
It’s a word you’ll likely never hear in an appointment with your accountant. And yet without it, you’re leaving answers - and ultimately money - on the table.
That’s right. Mindset. The word too woo woo for the financial world.
And yet, if we don’t get our headspace right when dealing with our business numbers, we’ll never get the whole story. If you feel like there’s something incomplete about your finances, here are the top 5 reframes you can make to get a better perspective on the bigger picture.
Question: have you delegated your finances, or completely abdicated responsibility for them? Here’s the difference:
Notice how the result is the same - someone else is doing the work - but the intention is radically different?
This is a great example of how our mindset really matters. If you take the time to understand the process - even on a fundamental level - your knowledge will give you the confidence to check data, ask questions and sometimes even disagree. Businesses flourish under confident, informed ownership.
Closely linked to point 1, too quickly do we defer to the expertise of others. This is especially true in our interactions with our accountants and bookkeeping professionals, especially if we don’t consider ourselves as ‘numbers people’.
However, we need to remember that we are in fact the experts of our own enterprise. No one will ever have the level of expertise that we do when it comes to the businesses we build and run ourselves. Don’t leave that out of the equation when dealing with other service providers - bring it to the table and hold your head high.
There’s not much room for the warm fuzzies in the accounting world - another reason why I took a different approach.
Because I can’t tell you the amount of times I’ve worked with a business owner and, when going over their numbers, they suddenly cry ‘that can’t be right!’ And usually, they’re right - they just didn’t know why at first.
There’s a lot to be said for a business owner’s intuition.
In my experience, it’s not all instinct and it’s not all facts - it’s both, together. The entrepreneur's instincts act like a hound, pointing us in the right direction as we work our way to the bottom of things. Financial savvy and good data management are what bring us the answers we seek.
Don’t ignore your intuition. Educate yourself to use it more effectively.
Tough question: did you hire your bookkeeper to help you understand your numbers, or as an excuse to never look at them again?
I’m sure it seemed like a good idea at the time. Let’s face it: sitting down with your finances, ensuring there’s a place for everything and everything in its place, analysing your incomings and your outgoings -
That’s no one’s idea of a good time. But we all acknowledge that it needs doing, so we wrangle ourselves a bookkeeper, leave them to it as fast as possible and kick the proverbial can down the road.
And that can you’re kicking is all your financial data that is potentially not being accurately managed, nor being put to effective use.
So just who is all your financial data for?
If your answer is your bookkeeper, your accountant, or the ATO, I would argue that YOU in fact are the most important user of your financial information.
The data you’re collecting - when organised correctly - can tell you infinite truths about your business at any given moment, empowering you to make big decisions and propel your business forward. This data is gold for making smarter decisions.
To help you get started, implement an end-of-month routine that is your commitment to regularly update, review and reflect. Make yourself the main beneficiary of the data and the knowledge.
Then just flick your accountant a copy. After all, it’s your business, not theirs.
Until the day you sell up or retire, you will be an essential part of your business’ success.
While you’re in those early hustle days, you’re critical to the ‘doing’ getting done. As your organisation grows along with your team, the clarity of data and information organisation becomes more important as you zoom out and make bigger, broader decisions.
But the decisions are still yours to make.
Remain the expert of your enterprise. Educate yourself so you can trust your instincts, knowing you can back them up with facts. Make sure the information is well structured and close at hand to do so. And only hand information and tasks on to others when you fully appreciate the role they play.
Complete clarity creates confidence.
If this resonates with you, and you’d like to work together on developing your mindset around numbers, I can’t wait to get started. Book a FREE 30 minute chat with me and let’s get started: https://betterbusinessdecisions.com.au/
| Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 30 minute chat with me: https://betterbusinessdecisions.com.au/ |
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When getting ready to pass your information on the accountant for preparation of tax returns, you can save heaps of time and money by checking a few key things.
Accounting can be many other things. It's about collaboration between the numbers and your mindset about your business. It's about collaboration between an accounting type person, and you the Business Owner, because without collaboration, you can't use the numbers to get better outcomes from your business. Use those numbers to tell you what's working and what's not working in your business, whether you're paying too much tax, whether you're paying too many wages, whether you, haven't got a big enough margin. All of those things are discovered when you work through the numbers. Accounting often after you get the tax return back, that might be when you’re looking at your numbers. That's not enough. That type of accounting is the accounting that I think is broken. So, reach out to your accounting professional, and start looking at your numbers today. Want to know more ?
Many business owners avoid their numbers and leave them up to someone else. When you do look at your numbers regularly you can find opportunity to improve your profits! If you are a beginner ask your accountant to walk you through your numbers the first few times. Unfortunately, many accountants don't have time to help their clients to understand - That's why we are here! Everything we do for our clients is with our clients - We empower them to be more confident and profitable through the exploration of their unique financial information. If you would like some support to understand your numbers reach out to us. We work directly with business owners through Zoom sessions to dig into your accounting system and explore - sometimes it's like a driving lesson where we can take control of your mouse to show you where to find what you are looking for.
