You've got a lot going on. It's time to delegate.

First off, this is a question we hear a lot. You’re making sales, customers are happy and your profit and loss statement (P&L) shows you’re making money. The thing is, your bank account tells a different story. You just want a good idea of how your business is doing financially, but it’s hard to get a clear picture. There are multiple places your cash could be, so let’s explore where it actually goes. ## You’ve made a purchase that isn’t reflected on your P&L If you’ve made any major business purchases lately, there’s a good chance they haven’t been counted as an expenses. Certain items are categorized as assets which go onto your balance sheet instead of your P&L. These include: - Property - Upgrades to buildings - Vehicles - Equipment - Machinery - Fixtures Let’s say your P&L tells you you’ve made $250,000. This doesn’t reflect the $100,000 you spent on a new equipment, because this is an asset. This cost won’t show up on your P&L, but you will find it sitting on your balance sheet. ## Liability is showing as profit on your P&L If your P&L says you’ve made $500,000 but you don’t know where that money is, it could be that you’ve spent cash paying down your liability. If you pay down $50,000 on your line of credit for the equipment you purchased, you’re reducing your liability. This still shows up as profit on your P&L because you’ve already taken the expense in a prior period. ## You’ve taken money out of your business for non deductible expenses When drawing money out of your company, it’s essential to know what is and isn’t tax-deductible. If you take out $15,000 to pay for a family vacation to Hawaii, that’s totally unrelated to business purposes and isn’t tax-deductible. The $15,000 won’t show up on the P&L and will instead appear as a profit distribution on your balance sheet, hidden from view. In other words, it’ll make it seem like you should have more cash than you do, but this isn’t the case. ## If you only look at your P&L, you won’t get a true reflection of profitability Never rely on your P&L when creating budgets or forecasting. It’s not a good indication of the amount of money you have and could inaccurately influence decisions. For example, your P&L might say you have plenty of cash to hire a new team member, but this doesn’t take into account the money you recently spent on assets. The same goes for the figure in your bank account; it’s not a true picture of what you actually have, so don’t rely on it to inform decisions. ## Great bookkeeping shows you exactly where your cash is Clean, clear books are one of the most powerful tools a business owner can have in their arsenal. They give you a goldmine of financial insights. **Running a business without these insights is like driving a car blindfolded.** You know where you want to go, but you don’t have direction and pretty much have to hope for the best. Approach bookkeeping as an investment in the future of your business. It lays the foundation for success and helps you forecast better, create accurate budgets and make informed decisions. ## Find a CPA who tailors your bookkeeping to you Bookkeeping isn’t just for compliance and tax purposes. If the data is organized so a financial expert can understand it but the business owner can’t, it’s useless. First and foremost, your bookkeeping is to help you understand how your business is doing financially. When we build out our clients’ books, our priority is that the numbers speak to them. This could look like: - If your business has two partners, setting up an account for Partner 1 and Partner 2 so you can see when someone takes expenses out of the business. - Reflecting asset purchases like equipment and vehicles on your P&L for clarity. - Using a variety of accounting tools to give you valuable reports with greater detail than you can get in QuickBooks. Laying out your accounting in this way gives you access to the most relevant insights. You’ll be able to see on one sheet of paper where every penny is going, so you’re not lost trying to figure out your profitability. We go back in and move things around for tax purposes, but that comes secondarily. Our priority is that you have good, clear numbers you can make sense of. ## It’s time to prep your business to thrive Numbers are our thing at Sundack – but we’ll never treat you like one. We get to know you, your business and your goals to give you the very best support to achieve them. Whether that’s by helping you make sense of your numbers or providing expert counsel for the big decisions, we’ve got your back. Start by [filling out our contact form](/contact) . From there, we’ll arrange a time to jump on a call and see if we’re a good fit. We can’t wait to get things going.

Demand is creeping upwards, your customer base is expanding and you’re thinking about bringing on new employees. The question is, when’s the best time to do so? Should you anticipate demand and recruit staff now with an eye to the future, or is it better to wait until you’ve seen steady results before expanding your team? If you staff too early, you’ll make less money personally, but if you staff too late, you could get bombarded and burn your people out. Truth is, there’s no one-size-fits-all answer. We’ll always look at your business - and life - from all angles to determine the best time to start staffing. ## Plan for the long game. You’re building an enterprise, building for the future. Quick, short-lived wins don’t lay the foundations for success. True longevity comes from putting systems in place that turn a ripple into a tidal wave. If you recruit labor today, it’s not an expense; it’s an investment. Sure, it’ll cause an initial dip in your cash flow, but you’ll reap the rewards down the line. You’ll make less money this year, but you’ll be armed to meet increased demand and more ambitious goals next year. In short, if you want to build a sustained enterprise, put your labor in today. Get your labor up so you’re strong going forward. ## Look at how much cash your business has access to. Cash is king. It’s an inescapable fact. No matter how much of a long-term investment it is, you can’t bring on staff if you don’t have the cash for their salaries. Implement effective forecasting to determine how long your cash reserves can sustain you. Chat with your accountant and look for areas where you could be saving on tax or cutting expenses, and consider credit options as a boost to cash flow. Remember; recruiting isn’t straightforward, so forecast for all eventualities. If you bring on five salespeople, prepare for two of them not working out. If you start the hiring process today, be aware it’ll take 4-5 months to bring new staff into your business. ## Keep a handle on how fast you’re growing. If you don’t have the money to bring in staff right now, pump the brakes on any rapid growth until you’ve got enough cash to fund the next stage. We’ve seen businesses delay adding staff while their company continued to grow. The problem? The existing team - including the owner - couldn’t keep up, were constantly playing catch-up, and quickly burned out. If you do have the cash, more often than not it makes sense to add employees ahead of the demand. When it does come, you’ll be all set to hit the ground running. ## Look at where you’re at. We’re not <u>just</u> talking about your business here. Yes, we’ll look at your company’s growth and whether you’re a new vs. mature business, but we also ask where <u>**you’re**</u> at in life. Let’s take one of our clients as an example. He’s just had his first kid, but he’s been burning himself out and is already gearing up for a busy 2024. Right now, he’s headed towards exhaustion. Bringing on extra team members will spread the load he’s been carrying alone, giving him time to spend with his family. ## Prepare for tomorrow, today. The right time to bring on staff depends on your priorities in business and in life in general. Whatever those priorities look like, you deserve a rock-solid CPA in your corner to keep you on track. [Fill out our form](https://sundackcpa.com/contact) and let’s look at how we can help with the strategic decisions to build your enterprise.

Starting with a new accountant marks a powerful step in your business. You can expect rock-solid financial foundations and smarter decision-making to push your business toward its goals.