For the past two tax seasons, I have been completely organized with my business financials, but that was not always the case. Before I got organized, I remember spending the ENTIRE weekend, from Friday to Sunday evening, getting my books straight in preparation for tax filing.
Now, you have to understand, I was career banker. I am the lady who uses a checkbook register (some of you do not even know what that is). And balances her checkbook TO THE PENNY. If it's not to the penny, then I go looking for it. Why? Because it's math dang it! Simple addition and subtraction, and if 1 + 1 ≠ 2 then the world as we know it is coming to an end.
I had considered angst when gathering my docs in preparation for the 2011 tax filing, because my business books were a mess. Well, not really a mess, they just did not exist. I had received for every dime I'd spent stacked in a manila envelope on my desk. It was strategically hidden behind my laptop so I could not see the growing pile.
In early 2011, I entered a business plan competition and won a prize package including a Sage Peachtree Complete Accounting software system. But had I been using it all year, NO! So I reluctantly called my CPA and set the initial appointment to confess my sins. I – with my anal retentive, banker personality – would probably be providing a shoebox full of receipts instead of my usual itemized files.
Several things happened in the meeting that caused a shift. It was not anything that was said, necessarily, and I did not even realize it until I was about to write this article, but it was meaningful for me:
1) I felt the weight lifting. The fact that the receipts were piling up and I was not being my usual, organized self about managing the books was weighing heavily on my spirit, and I did not even realize it. By sharing the secret, admitting the truth about the state of my record keeping, I became free of it.
2) I saw the lie in my story. I've been telling myself that the Peachtree system was too hard; it was not as user-friendly as Quick Books was, yadda yadda yadda. That was all BS! Yes it's different from Quick Books, but I certainly had the brains to figure it out.
3) I created momentum by taking action. The conversation I had with the CPA motivated me to get the books in order. Was part of it to save face? Probably, but the lesson is I took action; I rolled my head out of the sand and called the CPA for help. That one step started the ball rolling and Newton's first law of motion that states an object in motion, places in motion; took over from there.
4) I got organized. It took a long, long LONG weekend of keying in all of my invoices and receipts, pulling past statements, categorizing all of my spending, and playing with the software; but now it's done. The CPA has the file and is making the adjustments necessary and I can move on. I know how to use the software so I can me my updates monthly and I can be more productive.
Now, how does any of this relate to you, your business and certificates? I promise it does. First off, if you are like I was a few years ago, get your head out of the sand and call your CPA. I know if you're reading this you have a CPA, so just call him / her, already. NOW! Really, right now, this can wait. I know things change and sometimes you have to fire partners, so if you do not have one at the moment, call me. I can give you a list of some great CPA's.
Second, if your goal this year is to get into the federal marketplace, then plan your tax return accordingly. Government contracting requires leakage. So if you do not have the cash reserves to cover the cost of carrying a contract, make sure you show whatever profit you need to ensure you can borrow the working capital from the bank. That's why your CPA is so important, by the way, not to mention a good banker.
And finally, your financial infrastructure is a key pillar upon which contracts are based. Having a good partner to ensure this integral piece is in place will allow you to focus on other areas of your business. And remember, any certification you get will require financials, so get them together, and file them where you can find them so when you're ready to get certified; your numbers are at the ready.