Over the last week, both Silicon Valley Bank (a bank specializing in startups) and Silvergate (a bank specializing in crypto) collapsed. And, to put it mildly, that's bad. Banks don't usually collapse. We think of them as safe places to store our money. And, a bank...
‘The Best Damn Small Business Newsletter on the Internet’ archives
Accounting Article Archives
Strategic budgeting (for people that don’t do math)
I won an award 😊🎉 (and I'm gonna brag about it for the next few weeks 😋) - CPA Practice Advisor 40 under 40 It's budgeting season! Megacorps and startups everywhere are building out their annual budgets to allocate funds, get all the...
The four levers of cash flow 💸
I won an award 😊🎉 (and I'm gonna brag about it for the next few weeks 😋) - CPA Practice Advisor 40 under 40 The most common cash flow wisdom is to accelerate cash inflows and delay cash outflows. Or, in everyday terms, get paid faster and take...
Reader question: “what’s the difference between banks?”
Banking is among the first major financial decisions every new business owner makes. It's a relatively straightforward need (you just need somewhere to put the money, after all). But, at the same time, it's an unassumingly complicated decision. You have endless...
A (relatively) simple tax review for year-end
Pre-script: these are topics I discuss with year-round tax retainer clients during their year-end tax checkup. If you're a tax retainer client reading this, expect an email to schedule your call in a few weeks. If you're not a client and would like to have these sorts...
How to smoothly transition accountants
I may be biased, but accountants are one of the most important small business hires. At the very least, you need your taxes done. But, as you grow, you may also need help with other compliance chores, like payroll or bookkeeping. And, eventually, you may want their...
Financial reports need context
Financials are relatively meaningless without context. The context is what gives them their real weight, significance, and, well, meaning. Otherwise, they're just numbers on a page. For example, the same set of financial statements that'd be good news to a...
Your service offerings impact overall profitability (and personal fulfilment)
You started your business because you're good at what you do. That could be marketing, accounting (like me 😉), consulting, or something else. You're good at something and decided it was time to make more money for yourself (instead of earning a profit for your...
Cash vs accrual basis
Accounting seems simple, at first. It's just a bunch of transactions and numbers that need to be categorized and reported. But, when you report the numbers is a much bigger issue than you first realize. For simple transactions (like buying a slice of pizza), it's...
How to build an emergency fund
Saving money and building an emergency fund isn't fun. In fact, it's pretty much the antithesis of fun. Saving is the ultimate delayed gratification. Instead of using money today for something you enjoy (or a surprise bill 😓), you're saving it until there is...
Think about burn rate and runway while scenario planning
Startups frequently describe their financial health in terms of burn rate and runway (respectively, how much money they're spending per month and how long until they run out of money). Those are important metrics when you're spending like crazy and surviving on...
4 ways to charge clients upfront
New entrepreneurs and business owners frequently fall for the Net 30 trap. They accept Net 30 payment terms (aka, getting paid 30 days after the invoice) because they think that's just how business is done. They don't realize there's another way (or don't quite...
How to stop worrying about money (hint: the answer is math)
Managing small business finances can be stressful for even the most seasoned business owners (and outright intimidating for newer entrepreneurs in their first few years). You need to manage invoices, pay bills, negotiate payment terms, run payroll, pay taxes, and...
Back to basics: Profit & Loss vs Balance Sheet
The Profit and Loss report and Balance Sheet are two of accounting's most famous reports. Everyone's heard of them, every accounting software can generate them, and even the IRS is interested in them. And, they're famous for good reason. Together, they give you a big...
Thoughts on the Y Combinator email that’s floating around
The economy hasn't been stellar these last few years. We've had to deal with the COVID pandemic, constantly changing regulations, the entire world suddenly working from home (and, many clients/vendors not being prepared for it), confusing grant applications, and...
What to look for in a Profit & Loss report
Accountants and finance people love going on about how important your financial reports are and how much can be learned by regularly reviewing them. And, that's true. You can learn a lot about your business just by taking a regular look at your numbers. You can learn...
Throwback ⏰: Proactively look for surprise expenses to improve your long-term cash flow
Proactively managing cash flow is more than just enforcing payment terms, delaying your cash outflows, and building a tiny emergency fund. You should also actively look for potential cash flow problems and proactively plan for them. Because, surprise expenses that...
Throwback ⏰: Numbers lie like a dog
Mark Twain famously said, "There are three kinds of lies: lies, damned lies, and statistics," meaning you can manipulate statistics to prove just about anything. That's also true for every number you see out there. Every report, every graph, and every tax return can...
Throwback ⏰: Keep a running ‘progress & goals document’ so you can more easily look back on your growth
True growth is incredibly slow. It's a series of marginal improvements over a long enough period of time until you finally become proficient or successful. For example, they say it takes 10,000 hours to become an expert (which is debatable, but this is just an...
Throwback ⏰: Pick 3 business metrics to focus on – then ignore the rest
There's a near-endless supply of business metrics to choose from. Every single software now includes some sorta metrics dashboard. There's financial metrics, operating metrics, marketing metrics, sales metrics, project metrics, human resources metrics, metric metrics,...
Make paying invoices easier for your clients
Friction slows things down. That's true in physics, your car's brake pads, and small business cash flow. All those seemingly little annoyances and difficulties clients put up with, while paying your invoices, create friction and opportunities for your clients to pause...
Be realistic with your cash flow goals. It’ll never be perfect.
Sporadic and unhealthy cash flow makes running a business even more stressful than it already is. Instead of focusing on client work or strategic decisions, you'll be distracted by making payroll, paying next month's rent, and moving enough money around to make do....
Hiring an employee isn’t always the answer to business overwhelm
For all my yapping about profit, cash flow, and small business finance, I still do a lot of tax work. Business tax, personal tax, catch-up accounting, the works. So, you could definitely say this is a busy time of year for me. But, in a way, I'm lucky. I know tax...
How to intentionally review financial reports
Financial reports are the bee's knees. They give you a solid, big-picture understanding of all the little financial details and moving pieces in your business. Then, from there, you can start making educated decisions, working on problem areas, and improving your...
What to do after ranking your clients
This is the third email in a series on ranking clients. Check out the previous issues: How to rank your clients and What you can learn from ranking your clients. If you enjoyed this series, feel free to share it! You can learn a lot from ranking your clients....