It’s Time for a Summer Account Review
I don’t know what it is about summer, but it always feels like a great time to reset. It’s midway through the calendar year, things seem to move a little slower, and business definitely slows down as clients take off for vacation. (Which I hope you’re doing too!)
If summer is a stressful time because you’re not bringing in the revenue you want, there are some things you can do to combat this in the future. If you’re already in the thick of slow months, we have some ideas for how to get more people in the door right now.
But aside from that, a slow season is the perfect time to clean up some of the messy back-end pieces of your business so you can cruise into busier seasons feeling a lot more streamlined.
That begins with cleaning up your accounts: your Profit First accounts and your QuickBooks file.
Review All Profit First Accounts
If you’re not a Profit First novice, you probably have a few advanced accounts to help you get through some of the slow seasons, or to support things like yearly or quarterly subscriptions. For example, someone pays up-front for a one-year subscription to your gym. You don’t want to spend the entire fee in the first few months so you put it into an advanced account and redistribute it monthly to cover your expenses for that membership.
As your business matures, you may add accounts for things like marketing, equipment, office supplies, hiring, etc. But if you’re allocating money to these accounts and not using them, it might be time to consolidate. If you haven’t used the account in six months, remove the account and start sending those allocations where they make more sense. Or rename it and start allocating for something that you will use in the future.
If you need help figuring out allocation percentages, be sure to grab our Profit First Overview.
Clean Up Your QuickBooks
At the same time, some of the categories in your QuickBooks account might be so broad that you’re not able to accurately understand how you’re spending. For example, we often see business owners including things like association dues and magazine subscriptions under the “office supplies” category. That may not accurately reflect what you’re using those line items for.
Ask yourself if you need to know exactly what you’re spending on in each category. If the answer is yes, then go ahead and create new categories and make adjustments from there. But don’t micro-manage. If it doesn’t matter how much you’re spending on, say, supplies by department (front office vs. sales staff vs. trainers), then go ahead and keep them in one larger category.
The idea that I’m trying to get across here is that your needs will change as your business grows and changes. And gathering data to support your spending and decisions is important. You can only do that when you have a good handle on your money.
And it’s when you’re not feeling torn in multiple directions at once that you can set aside time to clean it all up. If you need help, we’re here for you! Book a call and let’s get your books cleaned up.