101: Bookkeeping For Coaches Whether You Are Starting A Business, Self-Employed, A Solopreneur
101: Bookkeeping For Coaches Whether You Are Starting A Business, Self-Employed, A Solopreneur, Entrepreneur, Mompreneur, Business Owner, Side Hustler, Freelancer, Bookkeeper, Virtual Assistant, Or VA
To ensure your coaching business is profitable, you need to make sure you are setting your bookkeeping as a priority. It doesn’t matter if you are a life coach, business coach, sales and marketing coach, financial coach, weight loss or health coach, relationship coach, or any other type of coach. If you want your coaching business to be successful, you know you will need to bring in revenues, make a profit and sustain your profits to stay in business. You started your coaching business to help people better their lives, and to continue to do this successfully, you need to put your bookkeeping and understanding your business financials as a priority. If you don’t, what is the alternative if your business fails? In today’s podcast episode, I walk you through some of the best bookkeeping tips for coaches as well as what you need to do to understand your business finances so that you can have not only timely and accurate financial statements, but you can also see how you can create more money and profits in your coaching business in the future. I understand that as a coach, bookkeeping and numbers may not be one of your strengths or one of your favorite activities, but whether you are a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, it is possible for you to do your own bookkeeping successfully, and with the right processes implemented, you might even enjoy doing it. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
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Show Notes:
To ensure your coaching business is profitable, you need to make sure you are setting your bookkeeping as a priority. It doesn’t matter if you are a life coach, business coach, sales and marketing coach, financial coach, weight loss or health coach, relationship coach, or any other type of coach. If you want your coaching business to be successful, you know you will need to bring in revenues, make a profit and sustain your profits to stay in business. You started your coaching business to help people better their lives, and to continue to do this successfully, you need to put your bookkeeping and understanding your business financials as a priority. If you don’t, what is the alternative if your business fails? In today’s podcast episode, I walk you through some of the best bookkeeping tips for coaches as well as what you need to do to understand your business finances so that you can have not only timely and accurate financial statements, but you can also see how you can create more money and profits in your coaching business in the future. I understand that as a coach, bookkeeping and numbers may not be one of your strengths or one of your favorite activities, but whether you are a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, it is possible for you to do your own bookkeeping successfully, and with the right processes implemented, you might even enjoy doing it. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
Welcome Back…Bookkeeping is essential for every business, but when you are a coach, you need to understand what happens if you don’t put your bookkeeping as a priority. As a coach, you are creating content, delivering your services, and helping your clients make their lives better by helping them get results, but bookkeeping is just as important if you want to ensure your business continues to impact your clients and operate into the future. When you let your bookkeeping go, you might miss deductions you could be taking and overpaying your taxes. You could be working for free if you don’t take the time to follow up on your invoicing and make sure your clients are paying you for your products or services. If your bookkeeping isn’t done correctly and you are not consistently looking at your financial statements for information about how your business is doing, your coaching business could fail. What are your options if your coaching business fails? Would you need to go back to working for someone else? What if you simply said that failing was not going to be an option for your coaching business? If this is the case, you need to make sure your bookkeeping is a priority, and you take the time to learn more about your financial statements and how your business is running as well as how you can make sound financial decisions to help you not only reach your goals, but achieve the future profits you know your business can create.
The secret to increasing the profits in your business is to be knowledgeable about your business finances. Have you found yourself wondering if you have enough cash flow to pay your bills? Do you know when you can afford to hire team members? Do you know how much you should be paying yourself? Do you know how much of the revenues you are bringing in are going to be taxed? When you have a good understanding of how your business is doing financially, all of these questions are easily answered. The first thing I will recommend is to make sure that you treat your coaching business as an actual business and not just a hobby. Decide what type of entity your coaching business will be. Many coaches will start their business out as a sole proprietor and then move into a different entity when it makes sense for their business. You want to make sure that you have a separate business account and if you are utilizing credit cards, make sure you have separate business credit cards as well. Keep your business and personal finances separate.
Next, I want you to find a system you love to record all of your money coming in and going out of your business. I feel strongly that if you find a system that you enjoy utilizing, even if you don’t like bookkeeping, it will make it easier for you. When you use a computerized software system like QuickBooks Online, you will find that it is easy to automate many of your transactions, and it takes care of the back-end journal entries for you, which means you don’t have to be a pro at accounting. For example, when you record a check in QuickBooks Online, it will ask you for the category you want the expense to go to, but it will do the journal entry in the background and reduce your bank account by this amount, as well as capture the expense category you select. Not only will a system like QuickBooks Online speed up your processes, but it will also reduce errors and create accurate reports. This is important if you are not necessarily a numbers person. If you are interested in learning more about QuickBooks Online, you can go to www.FinancialAdventure.com/QuickBooks and with the link there, you can save 30% on your first six months.
Let’s talk about the money coming into your business. If possible, you should try to get paid for your services immediately or before the services are provided. By setting up an easy way for your clients to pay you and utilizing payment links, you will get paid quicker, and if you have recurring income, make sure you set these payments up automatically. Anytime you can automate processes, you’ll save yourself time. You might be thinking about the credit card fees you are paying, but these fees often outweigh the time you could be spending tracking down payments on overdue invoices. If you are utilizing invoices, make sure that you follow up with unpaid invoices sooner than later. If you are using QuickBooks Online, it will easily capture outstanding invoices for you in the Accounts Receivable Aging Summary Report. The longer you have an outstanding invoice, the harder it will be to collect on it. Your bookkeeping system should track the revenues and profitability of each of your products and services and give you a month-to-month total revenue amount. You can easily track each of your revenue sources, such as coaching and other programs you are offering to know exactly how much revenue is coming in from each area. You can also see how much recurring revenue you have each month.
You also want to make sure that you are taking advantage of all of your expenses or deductions in your coaching business. You should be tracking all of your expenses, such as your office expense, travel, insurance, subscriptions, education, and internet expenses, to name a few. QuickBooks Online lets you connect your accounts and will automatically import your transactions for you. When you do this, you can add these transactions to your books with just a click of a button. Make sure that each expense you have for your business is actually helping your business grow. If not, see if there is a way you can reduce the expense or eliminate it all together. Look at all of your expenses, but pay close attention to your subscriptions and any membership sites or course content programs you are utilizing. As your business grows, you may need to reorganize where you are spending your money. If you are working from home and you have a designated area in your home that is used regularly and exclusively for your coaching business, you may be able to deduct a percentage of your expenses based on your office area size in comparison to the overall size of your home. You should also keep a log of all of your business trips so that you can get a deduction for your business miles driven in your business as well. Be sure to keep good records and receipts for your expenses. You can either do this manually or electronically. I have many clients who like to utilize the document attachment option in QuickBooks Online so that they have their documents attached to their transactions right in their bookkeeping system.
Whether you are utilizing a computerized software system such as QuickBooks Online or a manual system, make sure that you understand your chart of accounts. Your chart of accounts is the backbone of your bookkeeping system. Get to know what each of your accounts is for and understand each type of account. Your chart of accounts is broken down into your assets, liabilities, equity, revenues, and expenses. Once your bookkeeping system is set up, you will also be able to ensure you have enough cash flow or money coming in to pay all of your bills and expenses. You’ll also be able to create a budget and can easily compare this budget to your actual profit and loss to see how closely you are following your budget or meeting your revenue goals. You can take this one step further and do some forecasting and look into the future by planning your future profits. When you look at your past financial statements and then plan for the future, you can really take some time to work on your mindset and think about how you can utilize your financial statements to create more money and profits in your business. You’ll know when you can add more value for your clients and increase your fees, and you can focus on your goals and the growth you want to see in your business. Overall, you’ll know how you can make more profit, sustain those profits and successfully stay in business.
You’ll also want to reconcile your accounts on a monthly basis to see what’s outstanding and ensure that you are capturing every transaction in your financial statements. When you reconcile your accounts, it will give you the confidence that you have an accurate account balance. When you have accurate and timely financial statements to rely on, you can make smart business decisions. You’ll understand your business better, and you’ll know when it is OK to invest in yourself or your business. If there’s a big purchase or expenditure you see in your future, plan ahead by setting up a separate business savings account to help save for these expenses. A perfect example of this would be a certification or additional education course you know you’ll be taking in the future and want to ensure you have the funds to pay for it without harming your business.
Bookkeeping doesn’t have to be challenging, even if you are not a fan of working with numbers. The software solutions out there make it easy for you to track everything you need for your business, and most coaches can do their own bookkeeping. Even if you decide to outsource your bookkeeping, it can be done easily, especially if you already have your bookkeeping system set up with all your prior year’s data. When you schedule time every day, week, or month to do your bookkeeping, you will start having a routine you can easily manage. Not only will you be making smart business decisions, but you will also have much less stress when it comes to tax time since you’ll have all your reports ready to accurately prepare your tax return. If you are unsure about how to do your own bookkeeping or want to make sure that you are setting your bookkeeping correctly, join us for my upcoming Bookkeeping Bootcamp, where you can get your bookkeeping started or catch up on your bookkeeping for the year so that you are ready for the upcoming tax season. When your bookkeeping is up to date, think about how much more satisfying your business will be, as well as the peace of mind you’ll have knowing everything is accurate and you can make sound business decisions from this data. Having your bookkeeping up to date in this last part of the year will also help you make good tax decisions and have strategies in place so that you can save money on your taxes. You can see if your net income is higher than the last year and if it would be beneficial for you to include a more significant expense you’ve been thinking about making this year. Knowing if this is the best year for you to take additional expenses that could save you from paying additional taxes. If your bookkeeping isn’t up to date, you won’t have this availability to strategize and make good decisions before the end of the year. To help ensure your bookkeeping is up to date and accurate before the end of the year, I am holding a Bookkeeping Bootcamp Workshop for you to attend. I know it can be easy to put your bookkeeping off, and I hope the solutions I mentioned in this podcast help you develop an easy bookkeeping system you can maintain, but if you feel you need additional help, I am here for you. As a CPA, Business Strategist, and Coach, I help business owners just like you to ensure you have up-to-date and accurate financial statements. I take the uncertainty and stress out of doing your own bookkeeping. In this workshop, you’ll have a chance to either get started with your bookkeeping, catch up on your bookkeeping or make sure you have your bookkeeping system set up properly so that you can make smart business decisions during these last few months of the year. You’ll also have a better understanding of which reports you should be reviewing and what each report means for your business. This workshop is great for coaches, business owners, and bookkeepers who want to understand financial statements better and streamline their procedures in their bookkeeping business. I offer workshops like this throughout the year, and you can go to www.FianncialAdventure.com/workshop to sign up for this current Bookkeeping Bootcamp Workshop today, and don’t worry, if you are unable to attend the upcoming live Bookkeeping Bootcamp in October, once you are registered for the event, I’ll be sending out a link for the replay so you can watch it at your convenience. I’ll post links to this and other valuable resources for business owners and bookkeepers where you are listening to this podcast and in the show notes.
And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.
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