The Path to Profitability: Cut What Your Business Doesn’t Need to Help it Grow

Last month we looked at the steps business owners should take to start positioning their business for profitability in 2019: evaluating financials, policies and procedures, and employees against your long-term and short-term objectives. Now that you’ve completed that analysis, it’s time to prune what you don’t need to bring in more of what will generate growth (and profits).

Streamline company procedures. Are inefficiencies in your operation hurting your bottom line? In the end, efficiency leads to greater profitability, so look for excess steps in your procedures that you can cut. Keep in mind what your employees reported to you when you checked in with them about their responsibilities and their views of the business. Assess and rework your processes to improve workflow, create a more productive environment, and reduce employee frustration (and improve their job satisfaction). You may want to keep a record of the changes you’re making and revisit them quarterly to analyze results and adjust as needed.

Align those misaligned financial areas. Based on your ratio analysis and assessment of your company budget vs. actual figures, now is the time to act if you are not reaching your revenue goals. Cut back on excess spending (anything that’s not truly necessary or that is not serving the business in a positive way). It’s also time to determine why your revenue goals are not being met and consider allocating some resources to business-building endeavors such as marketing at a trade show, advertising campaigns, or hiring a strong sales person.

Get the cash flowing. If cash flow is not where it needs to be, acton the outstanding accounts receivable right away and see what you can collect. Additionally, talk with your customers and vendors regarding payment terms to create a better cash flow balance; and, consider going for a business line of credit at your bank to help with seasonal fluctuations. If the cash is there, make sure it is a sustainable cycle, especially if you are ready to expand your operation. Being in a strong cash position will also help you get favorable terms if you do decide to go to a lender for any reason.

Write new policies and procedures. Remember those conversations you had with your employees? They probably had some great feedback as the people who deal with daily operations. Cutaway any outdated policies and update procedures that are relevant to the company you have today and the company that will be in the future.Just as the marketplace changes (and your company direction with it), remember that your employee handbook is not immutable and needs to change with the times as well.

Now is the time to build on the foundation you have today, for the company you want in the future (and the successful business owner you want to be). Working with an outsourced CFO can help get your financials in order, cut away what isn’t needed to improve your operation,and get your business on the path to profitability. Contact CFO Your Way at (973) 897-0650 or cheryl@cfoyourway.comto get started.

Put Your Business on the Path to Profitability in 2019 – Start by Hacking the Overgrowth

 

With the start of the new year, it’s the perfect time for business owners to take steps towards profitability. Is your company on the right path to profits?

The first step is to consider your business objectives for the near term and long term. Maybe you want to add staff, lease more space, purchase equipment, or give yourself a raise. Is your current operation aligned with those objectives? What isn’t working anymore and what can you trim away to improve profitability?

 

Here are some additional steps to take to gain actionable insights into your business:

  • Evaluate your financials – As you review your financial statements, assess your ratios. Determine whether you are spending more than you’re making, and therefore, curtailing potential net profit.
    • Budget vs. actual income/expense – Budgets are excellent road maps for financial planning. Are you hitting your budgeted income? Are you spending more than anticipated? Take this time to assess if your income and expenses match up with your annual budget, and determine the steps you can take now to address any issues.
    • Cash flow – Is your business operating with sustainable cash flow to take you through seasonal fluctuations? Do you have the cash you need to add employees, expand your space, or other activities that support growth?
    • Revenue centers vs. cost centers – Which part of your operation is really making the money and what’s costing you too much? What should you cut away to streamline and boost profitability?
  • Review your policies & procedures – Are your current policies and procedures in line with the direction your business has taken or in tune with plans for growth? What you implemented during your startup phase might not be aligned with your organization’s new path. Cut out what no longer serves your company and update as needed.
  • Interview your employees – Chances are, as your business has evolved, so have your staffing needs and the roles your employees are filling. Talk to them to see how they feel about their roles and responsibilities, and make sure their own professional goals are aligned with your objectives as the business owner. Is everyone engaged with your company and customers? Are they all on board with where you want to take the business? If not, it’s time to make some cuts.

Working with an outsourced CFO like CFO Your Way can help you gain clarity around your financials, set smart business goals, identify where to trim the fat in your company and put your business on the path to profitability in 2019. If you’re ready to get those first steps—or need guidance if you’re further down the path—contact Cheryl Mucha, CPA, at cheryl@cfoyourway.com.

 

 

Tis the Season-Twelve things that should be on your business list

During World War II, pilots coined the phrase “flying blind” when they couldn’t see the horizon and needed to rely on the plane’s flying instruments. Pilots must be able to confidently rely on these devices to guide them.

What tools are you relying on to guide you through your business decisions? Are you flying blind, or do you have the right instruments in place to show you the way?

We are already half way through December and the winter holiday season is here. The list you should be “checking twice” right now should include the following:

  • Year-to-date cash receipts and disbursements summarized into accounting software
  • Bank and credit card accounts reconciled to date
  • Profit & Loss statement and Balance Sheet account activity properly classified
  • Retained Earnings matched to prior year ending balance
  • YTD payroll reconciled to payroll reporting
  • Budget vs. Actual report printed and analyzed
  • Profit & Loss statement and Balance Sheet printed and analyzed year over year
  • Budget and Cash Flow projection prepared
  • Estimated taxes paid
  • Tax accountant called regarding year-end tax preparation
  • Gather information to complete 1099’s
  • Contact CFO Your Way to get you through this list

If these items are not on your business “To Do” list, you should ask yourself “Why not?”. Keeping your accounting records up to date and in good shape is equivalent to a pilot keeping his/her plane in top condition. When the very instruments we rely on are unreliable, we are “flying blind”.

Don’t let running your business stress you out and take away from being thankful this season.

At CFO Your Way, we not only want you to have the time to be grateful for your business and your family, but also be financially prepared to give thanks and provide your loved ones with the gifts of love and gratitude you desire. We offer bookkeeping, financial reporting, and financial management services customized to meet your needs. So, contact us. We will help and guide you thru the list.

Assistance is just a phone call away. Schedule a Complimentary Consultation to discuss your needs. 

Tis the season…not to stress, not to procrastinate, but to be grateful and enjoy our loved ones.

Will Your Year-End Process Be as Seamless as Nature’s Winter Transition?

The end of the year is right around the corner. The trees are almost bare and the air is getting that sharp, cold bite to it. Nature makes its transitions so effortless and easy. Will your year-end close process be just as seamless?

Many non-retail businesses experience a slow period in December. While it might feel tempting to kick back and relax, these last weeks of the year can be used to organize your finances, maximize financial statement income, minimize taxable income, budget and plan for the upcoming year. It is a great time to reassess your financial record keeping and determine if your business needs additional support to make the year end close a seamless transition into the new year.

Questions you should be asking yourself at this time:

  • Are my accounting records current in my accounting software?Sunlight breaks through the autumn leaves of the trees in the early days of winter
  • Are all my bank and credit card reconciliations current?
  • Have I paid all required sales tax to the appropriate jurisdictions?
  • Am I current in paying my quarterly estimates for the filing year?
  • Do I know how much I have in assets and liabilities?
  • Do I know how much income my business reported year-to-date?
  • Have I spoken with my accountant to determine what they expect or need from me?

If you have answered no to any of the above questions, you should strongly consider seeking professional assistance. At CFO Your Way, we work directly with business owners and their staff to ensure accounting records are accurately maintained, financial reporting is timely and useful in management decision making, and that they are well prepared to face tomorrow’s challenges. Our team of professionals are licensed CPAs in the state of New Jersey and are certified as QuickBooks ProAdvisors. We understand accounting and the challenges small and mid-size business encounter. That is why we are here to help guide you through any financial challenges you are currently facing in your business.

Take a moment to consider our services for an effortless transition into the year and Schedule a Complimentary Consultation to discuss your needs. 


“Cheryl is an excellent partner in our firm’s growth. She is an expert at her job and very trustworthy. We actually enjoy accomplishing the accounting and bookkeeping with Cheryl now because she makes it easy and has such a great personality and outlook.” 

~ Mark Mascia,
President & CFO,  Mascia Development, LLC

 

 

 

Multi-Site Bookkeeper

Employment:  Professional Part time or Full time position

Firm Mission:  We here at CFO Your Way love nothing more than collaborating with small business owners to make their blood, sweat and tears show up as profit in their bottom line.  They don’t know what they don’t know – so we teach them how to use their P&L as a roadmap so they can keep more of the money they make.

Required skills, abilities, and knowledge:

  • Passionate about helping others
  • Professional
  • Trust worthy
  • Strong accounting background
  • Excellent work ethic
  • Strong communication skills
  • Experience working in a small team environment
  • Position and task ownership and initiative

Applicable skills, abilities, and knowledge:

  • Accounting knowledge – G/L, A/P, A/R, journal entries, financial reporting – Advanced level
  • QuickBooks – both desktop and online versions – Intermediate level
  • Excel – Intermediate level

Preferred skills, abilities, and knowledge:

  • Desire for stability and longevity with employer
  • Prior experience working for a CPA firm
  • Ability/Flexibility to do what it takes to get the job done

If you see yourself as part of our mission and exceed the skills, abilities and knowledge, please email your interest, including your resume, to cheryl@cfoyourway.com.

Don’t Be Taxed with Not Paying Taxes

Common to many business owners is the concern of paying too much in taxes at year’s end. Consequently, such business owners seek to minimize reportable income in an effort to avoid paying taxes to the federal and state governments. Minimizing your tax liabilities is certainly a commendable practice; however, one should not neglect to notice the benefits that come with showing reportable net income.  Some benefits are as follows:

  • Ability to secure financing to meet business demand.
  • Maximization on collection of Social Security benefits upon retirement.
  • Opens opportunities to take advantage of tax credits.
  • Avoidance of unwanted internal revenue audits.

By not reporting adequate income levels, it will be difficult to convince lenders that:

  • Your business is creditworthy and deserving of a favorable interest rate,
  • You are able to pay back your loans, or
  • Your business is growing and your capital needs are real.

Small business owners need to pay self-employment tax based on reported business income to help cover the cost of Medicare and Social Security obligations. By not paying into the system, the funds may be unavailable or insufficient when you come to retirement age.

Additionally, failure to report income could raise red flags with the IRS that warrant unwanted internal revenue audits of filed personal and business tax returns. Failure to report income could result in various civil and criminal penalties and may even lead to the IRS taking a stance that the business is a hobby rather than an actual business venture.

Reporting income isn’t a bad thing, but it does require you to plan ahead and be mindful of tax implications. An experienced CFO can help ensure that you understand the nuances of reporting your business income while being tax savvy in the process. If your business cannot afford a full-time CFO, consider hiring a part-time CFO such as CFO Your Way.

CFO Your Way is a virtual CFO that helps organizations execute on their business strategy. Our team can help guide you in maximizing financial statement net income to demonstrate financial strength while also guiding you in ways that minimize your tax liabilities. CFO Your Way works with several of northern New Jersey’s fastest-growing companies, giving them the opportunity to get the financial management expertise they require with the flexibility they desire.

If you need a virtual CFO to ensure that your business enjoys the benefits of having this professional on your team—but not necessarily in your office—Schedule a Complimentary Consultation to discuss your needs. 

 

Are Your Finances Leaving You All Warm and Fuzzy?

Autumn is a time to give thanks for the bounties given throughout the year which has flown by. The cool brisk air reminds us winter is around the corner and we seek warmth with fall coffee flavors, hot apple cider, hot chocolate, or even the warmth of love that family and friends provide us. With all these means to give us the feeling of warmth, the question arises whether we can say the same about our business. Does the financial performance of your business give you the warmth and satisfaction you desire?

Maybe you have fallen behind on your bookkeeping. The time or resources are just not there to keep up with the mounding piles of bills, invoices, receipts and disbursements that are claiming your desk and drawer space.

Maybe you have someone to maintain the bookkeeping, but can never quite get a handle on where you stand at any given moment, whether from an income or cash flow perspective.

Maybe you, as the business owner, don’t have the time to keep a watchful lookout on your staff responsible for the accounting of your business. You simply just don’t have the time to spare getting into the weeds on reviewing day to day transactions.

Maybe you are realizing that demand for your business is growing and you simply can’t afford to add another full-time employee to help out with the growth.

Maybe you just need that extra push to motivate you to get organized and up to speed with your finances.

If any of these maybes describes you, then you should strongly consider hiring a part-time professional to assist you with your specific needs. Consider a virtual accountant or CFO who can provide you with professional guidance, knowledge, and support. Such professionals are a perfect solution to any of your financial struggles.

At CFO Your Way, our mission is to be the solution to your financial needs. Our professionals can provide you with the necessary knowledge and skills to enhance your business performance and relieve you of the financial stressors that are taking away from the warmth and satisfaction you and your business crave.

Schedule a Complimentary Consultation to discuss your needs.  It is our pleasure to serve you.

Are Bad Habits Leaving You Stuck in a Rut?

One of my employees was telling me about reading to their kids the book “The Berenstain Bears and the Bad Habit”. Mama Bear’s advice to Sister Bear as they walked down the old garden path struck me. Habits, while they may not be intentional, can have negative consequences. Mama Bear was so accustomed to pushing her wheel barrow the same way down the old garden path that she had created a rut so deep that Sister Bear had to help her get the wheel barrow unstuck. Often, I find business owners experience much the same as did Mother and Sister Bear.

To illustrate, a small business owner recently asked me to help him enter an accounting transaction into an accounting software I’m unaccustomed to, namely M.Y.O.B. Trying to use my accounting knowledge and experience, I did a little navigating through the software and came to realize that this person had no idea what was being reported on his balance sheet or profit & loss statement for that matter. While he knew how to access and generate certain reports involving customer invoices and payments, he had no idea how much the business made in profits. When I questioned him about his current business profits and the way he accounted for his business transactions, he simply responded, “I do it all at the end of the year when I prepare for my taxes; It’s the way I have always done it; I don’t know any different.”

More than once, I have run into clients who don’t pay attention to keeping up to date on entering business transactions and are shocked at the amount they owe in taxes come the filing deadlines. Their reactions are, “I knew about what I was making, but I didn’t realize I made that much!”.

As we head into the last month of the 3rd quarter, it is time for business owners to be looking ahead to the end of the year and strategizing ways to minimize their income tax liabilities. Are you guilty of keeping bad habits, especially in regards to accounting and financial reporting?

The above examples illustrate what Sister Bear had to learn – habits, especially bad habits, have consequences that can leave us stuck in a rut. Don’t get stuck in the rut of having to pay off your prior year tax liability when you could be putting away to minimize your current tax liability. Act now and get your books in order so you know where you stand.

Don’t have the time? Feeling overwhelmed? Not sure what exactly to do? Don’t panic, just contact us at CFO Your Way and we will be glad to help you heal your bad habit(s) and get you out of the rut.

At CFO Your Way, we understand what it takes to run a business and the time needed to account for all your business transactions, that is why we offer to assist in performing bookkeeping and internal, day-to-day accounting functions; train and support you and your staff on basic accounting and finance functions, accounting software functionality, financial reporting; provide controllership services so you better understand your financial position and identify ways to run your business more profitability and efficiently; and much more.

As a virtual CFO, we work with small businesses in Northern New Jersey to lend a hand in organizing small-business finances through use of QuickBooks – online or desktop versions and are happy to train on QuickBooks and other accounting processes to ensure the most efficient and effective use of your employee(s).

Schedule a Complimentary Consultation to discuss your needs. 


“Cheryl is diligent and very proficient with a wide range of accounting and administrative skills. She has extensive experience working with both larger and smaller corporations, and readily adapts to change, which is common within today’s business climate. Cheryl has a caring personality and strong communications skills which facilitate her ability to develop and maintain effective relationships with her clients and partners.” 

~ Michael Lizzio,
Insurance Professional

Do yourself a favor…

I created the eWorkbook, “Smooth Business Sailing: 12 Tips to Sustain Your Cash Flow,”  to help you take a strategic look at how your business is doing so you can determine the changes you need to make. You have to right the ship before you can sail. The best business owners with the most successful businesses are those who know when it’s time to ask for help….. and CFO Your Way is ready to step in to assist you.

There’s nothing to lose and everything to gain with just a short phone call. If the idea of completing  the eWorkbook  is causing you to cover your eyes, then we’re the perfect resource to walk you through it. Come on. It’s time to let us see if we can help you. Just book a complimentary Discovery Call at www.ConsultWithCheryl.com.

Your employees, your managers, and your family will thank you.

I’m looking forward to talking things through with you,
Cheryl Mucha

Are you a Controller for a local or family-owned business who is ready for career growth?

 

Apply today for our new On-site Controller position:

Firm Mission:  We here at CFO Your Way love nothing more than collaborating with local and family-owned business owners to make their blood, sweat and tears show up as profit in their bottom line.  They don’t know what they don’t know – so we teach them how to use their P&L as a roadmap so they can keep more of the money they make.

Required skills, abilities, and knowledge:

  • Passionate about helping others
  • Professional
  • Experience working in/with local and family owned businesses
  • Trustworthy
  • Knowledge to interpret P&L, Balance Sheet, Cash Flow, and Financial Forecasts
  • Ability to make business and financial recommendations based on the interpretation/analysis
  • Excellent work ethic
  • Strong communication skills
  • Experience managing a small team
  • Position and task ownership and initiative
  • Ability/Flexibility to do what it takes to get the job done
  • Ability to travel to different client sites
  • The discipline, focus, and workspace to periodically work from home

Applicable skills, abilities, and knowledge:

  • Extensive accounting knowledge – Financial reporting, Strategy, Business streamlining – Expert level
  • QuickBooks – both desktop and online versions – Advanced level
  • Excel – Advanced level
  • Process Efficiency – Assess operating procedures, recommend and execute improvements

Preferred skills, abilities, and knowledge:

  • CPA
  • Desire for stability and longevity with employer
  • Experience working in/with real estate investors/property managers
  • Experience working for CPA firm

Send resume along with salary requirements to cheryl@cfoyourway.com.