We’re talking all things finance with LoriAnn Kuntz – owner and CEO of Profit Priority, a boutique accounting and fractional CFO firm helping creatives go from unsure to unstoppable when thinking about their finances.
I am always talking about the importance of knowing your numbers, and this conversation was so good! Jam-packed with advice and insights for both new and experienced business owners, Loriann shares her knowledge and expertise on financial strategy for creative businesses.
Let’s get into it.
Behind the Design Podcast episode 92!
Bookkeeper vs Accountant
Both bookkeepers and accountants know numbers, but each specialize in their own area of expertise.
Your bookkeeper is going to be deep inside your business regularly – not only tracking transactions, but also watching for trends and identifying areas where adjustments can be made to help you save more [or maybe allow you to give yourself a bonus or increase your pay].
Adding an account, or tax strategist, up-levels your finance game, as you now have a team – amongst yourself, your bookkeeper and your tax strategist – reviewing your numbers and recognizing where to take those numbers in order to save or pay less in taxes, etc.
Having both is a game-changer in business when it comes to your financial foundations.
FAQ: When is a good time to outsource bookkeeping?
First ask yourself, “are you doing it right now”? If the answer is no – or if it’s behind, if you don’t have time to do it, if you don’t understand it, if it’s getting pushed aside – then it’s time to find a solution.
Separate Business + Personal [and actually keep it separate]
Setting up separate bank accounts for business and personal is more than just saying you have two accounts. Keeping your transactions separate simplifies bookkeeping and will help protect you if you’re ever audited.
Having separate accounts also allows you to track your revenue and expenses more accurately, and more frequently.
Pro tip:
Find a spreadsheet layout that works for you – don’t just use what everyone else is using. If it’s overwhelming to you, you won’t keep track and you’ll find yourself scrambling to know your numbers each month.
If you’re just starting out in business or you are unsure of what is considered a business expense, grab Loriann’s guide: Business Expenses: Are they deductible?
Budget + Projections
Creating a budget should not be taboo – it is the best way to be in control of your money instead of the money telling you where it went.
A well-structured budget is such a valuable business tool that can serve as your roadmap for future business operations. When used to it’s intent, it’s truly the best way for you to have clarity in your numbers, guiding you in various financial decisions and allowing you to plan for larger investments that will help you scale.
How to Pay Yourself
As a new business owner the most common way to pay yourself is by breaking it down into percentages – 50% as a personal payout, 30% set aside for taxes and the remaining put towards business expenses.
It’s also important take into account the amount required for your personal needs. What is the bare minimum you need to operate off of? Pay yourself that on a month-to-month basis and then as you start to see consistent months or your business begins to grow, you can re-evaluate those numbers and see if you can increase your pay or set a salary amount that would make sense on all ends.
I hope these tips empower you to become confident in your numbers, be able to know your next steps in business and be able to scale successfully!
For a deeper dive into our conversation, tune in to the Podcast:
92. Remove the Stress of Finances with LoriAnn Kuntz
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Resources:
Business Expenses Guide
