When I was a kid, I loved to page through the toy catalogs that came in the mail at Christmastime. I made a list of every toy I wanted from Santa. Likewise, small business owners have long wish lists of items that would make life easier and the business more prosperous. Having cash on hand to turn wishes into reality requires a steady, strong cash flow. One way to improve cash flow is to increase Days Payable Outstanding. Days Payable Outstanding, commonly abbreviated as DPO, is a financial ratio that shows the average days it takes for a company to…
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Cash Flow Strategy: Increase Days Payable Outstanding
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Be Prepared: Emergency Cash Reserve Funds
Let’s face it, some things are simply out of our control. Even the best-laid plans can go awry. We learned that lesson during the COVID-19 pandemic. At any moment, pandemics, wildfires, floods, and other natural disasters can wreak havoc on a business. And the list doesn’t end there. What about a cyberattack, supply chain disruption, rioting, or the sudden illness or death of a business owner or key employee? Emergencies come in all shapes and sizes, so it’s best to plan for the unexpected. The ages-old Boy Scout motto, “Be prepared” holds true for businesses, too. Cash planning is a crucial process for any small business.
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Avoid a Tax Tailspin: Open a Tax Savings Account
I’ll never forget this candid email I received from an ever-so-thankful client: “So, I am going to sound super vulnerable right now. Thank God we started a tax savings...I went from paying nothing in taxes last year to $18,483 this year...”
Wow! It’s so humbling to hear how we helped a client overcome a financial hurdle. Her appreciation for our financial foresight made my day. But I can’t take all the credit. This client started working with us because she read the book “Profit First.” She believed the author, Mike Michalowicz, when he said, “Profit is not an event. It’s a habit.” She chose Prosperity Bookkeeping not only because I read the book but also because I successfully implemented its principles in my business and the businesses of several clients.
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What Makes Prosperity Bookkeeping LLC Stand Out
Thanks for stopping by our blog. If you’re looking for more information about Prosperity Bookkeeping LLC, you’ve come to the right place.
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Why You Should Choose Prosperity Bookkeeping LLC!
If you’re searching for a professional bookkeeper for your organization, hiring the right person for the role is crucial. As your bookkeeper will need to document your business transactions, the candidate you choose will be critical in helping your organization monitor its finances.
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Profit Building Game Changer
Transfer 1% into a Cash Reserve FundIncreasing profit can be a big hill to climb for entrepreneurs. But instead of sticking to the traditional cash management formula, Sales – Expenses = Profit, consider turning the formula around, Sales – Profit = Expenses.
That’s the game-changing logic of Mike Michalowicz, author of “Profit First.” The math comes out the same, but the business approach is much different!
Simply put, Michalowicz’s business principle is to take your profit first. To do so, he advises business owners to open five different bank accounts: Income, Owners Compensation, Operating Expenses, Profit Hold, and Tax.
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How to Successfully Collect Upfront Payments
Managing the ebb and flow of cash in a business requires a mix of art and science. Juggling bills while waiting for customers to pay you can be a difficult balancing act. Read more at “Why is Cash Flow Important?” To improve cash flow overall, businesses can ask clients to pay them upfront, before any work begins or services are provided. This business technique comes with several advantages. Manage Cash Flow By accepting upfront payments, business owners have the extra cash on hand to cover out-of-pocket expenses associated with a project. Consequently, the business owner isn’t digging into cash reserves to fund labor, supplies,…
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Reality Check: Ask Questions About Your Financial Statements
Financial statements may look complex and intimidating, but these accounting records actually are helpful tools. Understanding financial statements is an essential skill for business owners. Financial statements help business leaders make decisions based on the economic health of their companies, not on guesswork or gut instinct. Hard data shines a bright light on business finances, sometimes providing a much-needed reality check. By asking questions about their financial statements, business owners gain a better understanding of their financial position. The result? Smart business decisions.
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Small Business Customer, Negotiations: Don’t Leave Money on the Table
As a small business owner, chances are that you negotiate more often than you’re aware. For example, you negotiate terms with employees, vendors, suppliers, even the bank.
When negotiating with customers, confidence in your negotiating skills will help you strike effective deals. The time and energy it takes to improve your negotiation skills are well spent, because of the enormous payoff. Effective negotiation skills will help you reach outcomes that might otherwise slip through your fingers. You bring your A-game to the bargaining table, thereby maximizing the value of the agreements you reach. As the saying goes, you don’t leave money on the table. You confidently flex your negotiating muscle to close a sale with a customer.
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Cash Flow Strategy: Reduce Days Sales Outstanding
Cash flow is the lifeblood of any business. Consequently, running into cash flow problems can quickly drain the life out of a business. Steady cash flow strengthens an organization’s financial position. When no money is coming in, people tend to stop working or providing services. It is important for small businesses to monitor their financial statements and manage cash flow in order to have cash on hand to run day-to-day business operations.
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Staff Appreciation
Have a good employee? Well, then you’ll want to retain that individual. The cost to replace an employee can cost a thousand dollars or more, depending on the industry. So, what’s one way to motivate good employees and earn their loyalty? Staff appreciation. Appreciation sends ripples through an organization. An employee who feels appreciated is:
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Own a Business, but Not Compensating Yourself - It's Time to Reassess
Business owners put in long hours. I know this because I get emails from bookkeeping clients after hours and on weekends. A business start-up is especially demanding. Plus, cash flow is tight when a business is new. Because cash flow is limited, some small business owners forgo compensation. After all, won’t the business be stronger if the earned income is invested back into the company, not spent on compensation? While that’s a logical argument, I advise business owners to follow a different financial strategy. Here’s why business owners should compensate themselves fairly.
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Meet The Face Behind Prosperity Bookkeeping LLC
I’m Kristie Van Pay, the proud owner of Prosperity Bookkeeping LLC. I look forward to sharing my story. I hope that you will enjoy getting to know me better.
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Conquer credit card debt rebuild profits
Credit cards certainly are handy financial tools. It’s so simple to pull out a credit card from your wallet and pay expenses on the go. Credit is handy for one-time and recurring business expenses, also. Financing purchases with a credit card is simpler than taking out a loan. Plus, plastic is easier to track than cash payments. Businesses like the convenience of plastic – along with its special perks like miles, points, and cashback. Companies that pay the full balance of their credit cards every month have a convenient and effective way to pay their bills. These organizations avoid costly interest and penalties often associated with credit cards. Whenever possible, businesses should pay off their balance in full, or at the very least, pay more than the minimum due. However, sometimes paying more than the minimum just isn’t possible. That’s when credit card debt mounts and profitability suffers.
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Subscription Services: Take Stock of Hidden Expenses
Subscription services are everywhere. While many are critical to small business operations, others can slowly drain your accounts. Subscription services often become background noise, and you don’t realize the money you’re spending.
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Outline: How Financial Reports Can Quickly Help You Improve Your B2B Marketing Strategies
Buyer Persona: Current Client/Outsource
Julia runs a consulting agency in Green Bay. After five years of building her customer base, she has an overall picture of what type of customer is the most profitable to work with. Moving forward, Julia would like to work with more of these types of “A-List” clients. They’re a good fit for her agency’s capabilities, and they’re making her money. Thus, Julia combines the information she knows about her ideal customer. By doing so, she creates a customer persona. A customer persona is developed by compiling the demographics that top customers share:
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Announcing The New Website
We are delighted to announce the launch of our new website!
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A Paperless Office Puts Money Back In Your Pocket
Do you remember the days of receipt books, file cabinets, and daily trips to the post office? Sure, that’s what worked back then. Thanks to the birth of Microsoft Office, QuickBooks Online, and other technology, business operations have changed immensely. Many of today’s small businesses are paperless offices. Prosperity Bookkeeping certainly is one of them.
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Obsolete Equipment: Sell vs. Store
I recently came across an old photograph taken at an office where I worked. I had to chuckle at all of the office products that are missing from my business today. Times have changed! We no longer need a Rolodex, land line, 10-key calculator, stapler, CRT monitor, binders, photocopier, or bookshelves. Out with the old,
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Accounts Receivable: Make it Easy for Customers to Pay You
Owners of small businesses rely on their customers to pay their invoices on time. On-time payments are essential to maintaining cash flow and business operations. With cash on hand, owners can pay themselves a fair wage, hire new employees, purchase equipment and inventory, and expand their marketing, products or services. When cash is tight, businesses
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