Learning Center
Some Small Businesses Are Recovering. Is Yours?
Intuit recently did a survey documenting the financial losses that many small businesses had experienced since March 2020. Not surprisingly, the report, Intuit QuickBooks Small Business Recovery, found that COVID-19 has had a significant impact on the financial health of U.S. small businesses.
But many of the companies surveyed have proved to be resilient. As of March 31, 2021, 61 percent of them saw an annual revenue increase compared to pre-COVID days.
How would you have answered the survey? If indeed you did suffer financial and personnel losses because of the pandemic, has your business started to rebound yet? If not, there are actions you can take in QuickBooks Online to help in your recovery. Here are some of them.
Transactions: Watch your income and expenses like a hawk.
QuickBooks Online provides excellent transaction-tracking tools that help you document income and expenses.
How much time do you spend working with your downloaded transactions? If you take advantage of the excellent tools QuickBooks Online provides, you may notice patterns that you’ll want to explore and modify. For example, are you spending too much in one or more particular areas? When and where is your income dipping?
It’s critical that you connect to as many online financial institutions as possible, so you get a complete picture of your income and expenses. Once you have, click on Transactions in the toolbar, which should open to the Banking page. If you’re only going there to make sure there are no unrecognized entries, you’re missing out on some of QuickBooks Online’s transaction-tracking tools. In the image above, we’ve specified a vendor and chosen a Category and Tags. This will make your reports more meaningful and actionable.
If you don’t know what it means to Find Match, we can show you how that works. It’s a real time saver.
Sales: Make it easier for customers to pay you.
We’ve written about accepting online payments in this column before. It’s especially important if you’re struggling. You may actually be losing sales if you don’t let potential customers pay online through a credit card or bank account transfer. And existing customers may pay faster if they can do business with you in that way.
QuickBooks Payments makes this possible. There are some nominal fees involved, but the potential increase in your income should more than cover them. Let us know if you want us to help you set up a merchant account.
When you set up a merchant account through QuickBooks Payments, you may find that your customer base will grow, and existing customers will pay faster.
Expenses: Categorize expenses with tax time in mind.
You’ve probably already filed your 2020 income taxes, but we’re well into 2021, and it’s not too early to start thinking about your current tax situation. QuickBooks Online helps you track your income carefully, but it’s equally important to make sure you know what your tax-related expenses are. You want to get every deduction and credit you can. So when you’re looking at transactions, like we described above, make very certain that you’re assigning the correct categories to each of them.
We can help you run reports on a quarterly basis that should be of help when you make estimated tax payments. That way, you may be able to reduce your quarterly obligation during the 2021 tax year and won’t have to wait until you file in 2022 to see savings.
Time: Make sure your billable hours are billed.
Unless you have an organized, easy-to-use method for tracking billable time, some hours are likely to fall between the cracks. QuickBooks Online provides effective tools in this area. As you go through your downloaded transactions, you may see expenses that can be billed to a customer. Select the Customer/project and check the Billable box so you’ll be able to include it on their next invoice.
You can mark expenses as billable to customers in your Transactions register.
As you create time entries for you and/or your employees, you can also mark those hours as billable.
Reports: Run basic, critical reports regularly.
You can’t know how your business is doing financially unless you create reports. Besides the quarterly and standard financial reports we can run and analyze for you, you can—and should—be generating reports yourself through QuickBooks Online. Here are some of the ones we suggest:
- Budget vs. Actuals. If you’ve put the time and effort into creating a budget, it’s critical that you gauge your progress regularly and make adjustments as needed.
- Open Invoices. Who have you billed that hasn’t paid?
- Accounts Receivable Aging Detail. Who owes you, and how far behind are they?
- Sales by Product/Service Detail. What is selling well and what isn’t? You can make decisions about your product and service lines by viewing this report. This is especially important when your sales are sluggish.
- Business Snapshot. This is a series of charts and lists that provides a quick visual overview of key data.
NEVER MISS A STORY.
Sign up for our newsletters and get our articles delivered right to your inbox.
Rose Tax & Financial
Cedar Crest, New Mexico 87008
Sat: 10:00am to 2:00pm
Check the background of your financial professional on FINRA's BrokerCheck
Avantax affiliated Financial Professionals may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state. Securities offered through Avantax Investment Services℠, Member FINRA, SIPC, Investment Advisory services offered through Avantax Advisory ServicesSM, Insurance services offered through an Avantax affiliated insurance agency. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019. 972-870-6000.
The Avantax family of companies exclusively provide financial products and services through its financial representatives. Although Avantax Wealth Management® does not provide or supervise tax or accounting services, Avantax representatives may offer these services through their independent outside business. Content, links, and some material within this website may have been created by a third party for use by an Avantax affiliated representative. This content is for educational and informational purposes only and does not represent the views and opinions of Avantax Wealth Management® or its subsidiaries. Avantax Wealth Management® is not responsible for and does not control, adopt, or endorse any content contained on any third party website.
This information is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences.
For Important Information and Form CRS please visit https://www.avantax.com/disclosures.