January 29, 2024 • 14 mins
In this episode of the podcast Belinda discusses the importance of having a good bookkeeping system in business. She emphasizes that bookkeeping is not only important for tax purposes, but also for understanding the true profit of the business and managing expenses. Belinda shares her personal experiences of hiring a bookkeeper and the consequences of not keeping a close eye on expenses.
About the Host -
Belinda Ellsworth is a Speaker, Trainer, Best-Selling Author, and Podcaster
She has been a professional speaker, mover, and shaker for more than 25 years. Having built three successful companies, she has helped thousands of entrepreneurs make better decisions, create successful systems, and build business strategies using her "Four Pillars of Success" system. Belinda has always had a passion and zest for life with the skill for turning dreams into reality.
How to Connect with Belinda:
Facebook -https://www.facebook.com/workfromyourhappyplace
LinkedIn - https://www.linkedin.com/in/belindaellsworth
Instagram -https://www.instagram.com/workfromyourhappyplace/
Website - www.workfromyourhappyplace.com
Join my membership program and discover the art of creating and sharing amazing experiences with like-minded people, all from the comfort of your own home. You get to connect with others online, learn new skills and techniques, and grow your network without ever having to leave your computer screen. To know more, click on the link https://workfromyourhappyplace.com/vip/
About the Host -
Belinda Ellsworth is a Speaker, Trainer, Best-Selling Author, and Podcaster
She has been a professional speaker, mover, and shaker for more than 25 years. Having built three successful companies, she has helped thousands of entrepreneurs make better decisions, create successful systems, and build business strategies using her "Four Pillars of Success" system. Belinda has always had a passion and zest for life with the skill for turning dreams into reality.
How to Connect with Belinda:
Facebook -https://www.facebook.com/workfromyourhappyplace
LinkedIn - https://www.linkedin.com/in/belindaellsworth
Instagram -https://www.instagram.com/workfromyourhappyplace/
Website - www.workfromyourhappyplace.com
Join my membership program and discover the art of creating and sharing amazing experiences with like-minded people, all from the comfort of your own home. You get to connect with others online, learn new skills and techniques, and grow your network without ever having to leave your computer screen. To know more, click on the link https://workfromyourhappyplace.com/vip/
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Work from Your Happy Place, the podcast that equips you with the
knowledge and inspiration to live your dreamsand find your own happy plays. You
will be encouraged by and learn fromentrepreneurs and artists who are already working from
their happy plays, all while pursuingtheir passion with a purpose. Be sure
(00:20):
to sign up for our free weeklynewsletter for our recap of the week's guests
and a preview of what's in store. We also have two special gifts for
you, a video the five coreprinciples Still Living a half year Life and
a printable download title Top ten salesStrategies. Go to Work from your Happy
Place dot com, forward slash free. Fill out the attached form to receive
(00:44):
your gifts and be added to ournewsletter. And now here's your host,
Belinda Ellsworth. Hello everyone, andwelcome back. This is a continuation of
a series that we are doing forour Tuesday Tips in the top ten mistakes
that people make in business. Iwant to try to give you these tips
so that you can avoid them,helping you to get the success you want
(01:07):
in a much quicker time frame,or continuing that success as you grow your
business. I just want as afriendly reminder if you are in your own
business, if you own your ownbusiness, if you're trying to start that
business, scale your business, growyour business. I would welcome you to
take a look at our community workingfrom my Happy Place, where we have
(01:30):
an amazing membership as well as asubscription box that you can really utilize on
a monthly basis. So please checkit out on our website. All right.
Number nine is having a good bookkeepingsystem. Gosh, this is the
thing that is always not a lotof fun. It's the thing that a
(01:53):
lot of people don't necessarily have experiencein, and it's a lot that people
always think, I'll get to I'llget to it, I will get to
it. How many of you haveever found yourself like right before tax time
and now suddenly you are going backthrough all of the year before trying to
collect all of the information because youdon't have it in a here it is
(02:20):
and my fingertip situation. There's numerousreasons why bookkeeping is important. Tax time
is certainly one of them. Ifyou are keeping tracks of your books on
a regular basis, tax time willbe very very easy for you. The
other reason bookkeeping is important and ina good reason for you to at least
(02:43):
keep your eyes on it. Now, you might not do all of the
bookkeeping. I did my bookkeeping inthe early early years of my business.
That was one thing as I startedhiring people. I first hired a personal
assistant. Then I hired another galin my office. I'm trying to think
(03:07):
how that went. The first galthat I hired actually helped me get bookings.
Then I hired a personal assistant tohelp out with sort of the daily
routine things. And then my thirdhire was for a bookkeeper. Why because
it was just taking up a lotof time for me that I could be
(03:29):
talking to clients, or working onnew materials, or doing just about anything.
Right, what, here's the deal. I've always kept a strong eye
on that book keeping. So firstI was doing it, so I knew
the things that I wanted to makesure that we were keeping track of.
(03:50):
I had somebody doing it on aregular basis. One of the things I
always knew was my expenses. Andthis is the thing that people just don't
want to know. It's called aprofit and loss statement, So you need
to know, yes, this ishow much sales we've had, but really,
(04:11):
how much profit did you have.There are a lot of times as
you scale a business that you actuallymake less profit because all of a sudden,
I've got to order more inventory,I've got to hire more people.
And now with all the output thatI have, my sales might have increased
(04:32):
some, but my expenses have increasedof a more entire percentage than what I
was doing before. So, forexample, you might do five hundred thousand
dollars in sales, and you mightbe doing that mostly by yourself, maybe
(04:53):
with one other assistant or two parttime people. And here's after you pay
them and you pay for some ofyour other expenses, this is my actual
profit. Then you can suddenly moveup to doing a million dollars in sales,
and now you've hired you three timesthe people, and you've had to
(05:15):
get other additional things. You gotadditional shipping, or you've got additional product
costs, whatever the case may be. And suddenly your profit now is less
than when you were selling five hundredthousand dollars. That seems for some people
they would think, well, that'sridiculous, but it happens all of the
time, and you suddenly don't knowit. There's a threshold that you say,
(05:41):
wow, either we got to workthrough this pain point right here and
get to two million dollars and nothire anybody else and get the job done
with these, or make sure thatour expenses aren't increasing by double then we're
going to be actually making more profit. All of this only happens if you
(06:01):
have a book keeping system. Bookkeepingis also so I've said, it's good
for taxes. It's really good foryou to know like what your profit really
is. It is also a reallygreat way to handle expenses. Now I'm
going to be honest and transparent rightnow as I can be. So I
(06:25):
had a full time bookkeeper that workedon staff for all the way up until
COVID, And so after COVID happened, then I didn't and that bookkeeper left
and actually didn't want to come backto bookkeeping. She was coming into the
office like three days a week andthen she would work at home the other
(06:46):
day of the week. So thenI was suddenly like okay. So then
I had the one gal who wasworking in my office. I said,
okay, can you do the bookkeeping? And she was doing it like sort
of half days, part time,and doing her other duties as well well.
Then as time has gone on,she it was actually running her own
(07:10):
business, and she said, Inow can move out. I had this
job while I was building my business, and now my business has grown to
the point where I can leave.So then I was suddenly like, oh
my gosh. So then there wereother things that needed to happen. I
was doing some of the bookkeeping,but I was not doing a great job.
(07:30):
All of a sudden, real recently, I was like, I need
to do an audit myself. Andas I sat down and started looking at
the expenses of which I hadn't beenkeeping track of, suddenly I was like,
wow, we had two and threedifferent plugins and subscriptions that we had
(07:51):
for basically doing the same service.So we would get one and then somebody
else would say, you know whatworks better than but nobody would cancel the
other one. And so all ofa sudden, I do this complete audit,
and I realize that my expenses havegotten out of control simply because nobody
was watching it. And then consequentlyyour expenses start to supersede what the profits
(08:20):
that you have coming in. Youdon't ever want that to happen, my
friend. So if you think thatbookkeeping is just boring, you know,
making exciting. I love numbers.I love looking at my numbers. I
love analyzing the numbers. They're likemy own little personal coach that tells me
how well I'm doing. We talkedabout that in session five or our top
(08:45):
ten tip of mistakes that people make, when number five was knowing your numbers.
So I really want to encourage you. There's knowing your numbers, which
are analytics, but there's also knowingyour money, which is in book keeping.
So either have someone assist you,have a system in place, get
(09:09):
some software that works well for you, get a part time person, and
really sit down and understand what's happening. I recently touched to someone who's been
in business for thirty years and Isaid, you know, what are some
of the things that you have letother people do or what is a how
do you navigate sort of the businessside of what you do? And they're
(09:31):
like, I always write the checksno matter what. Now that's something that
I also had let other people do, but I do know. And when
he said that, I was like, yep, because when you're writing that
check, you know what's going outand then checking that with what is coming
in in your sales. I likechecking my sales compared to what I did
(09:56):
on this day last year. Ilook at it every single day when I'm
consulting with a company. Some companiesdon't have that in place, and I'm
like, I would like to seeevery day what our sales are, and
I want it compared side by sidewith what did you sell on this exact
day last year. Now, atfirst they were like, oh, can't
(10:18):
we just do it a week ata time, or can't we just do
could we do like, you know, two weeks, or how about we
just do it a month at atime, and after the month's over,
it's too late if you didn't hitthe same amount of sales or increased by
twenty five percent of what you didlast year. Why because we have no
way of adjusting. We have noway of saying, wow, we sold
(10:41):
one hundred thousand more last year onthe fifteenth. What the world did we
do? Then you look back andyou go, oh, step, we've
totally forgot about that, Like wecould do that right now, and you
can still do it if you're watchingit on a regular basis. This is
a little little bit about knowing yournumbers, but it's also a little bit
(11:01):
to do with bookkeeping. If youare looking at your sales versus your expenses
in the month and knowing it canstop you if you can look and say,
gosh, we only have this muchin the bank, or you know,
watching your bookkeeping where you are actuallypaying your balance of your credit card
(11:24):
or paying it by half, ifsuddenly it gets away from you and then
you have no buying power when youneed it, then you think I can
afford this bill, but you're reallynot able to afford the product that you
just got, so then you haveto say, Okay, I need to
have this amount of money in anextra fund. That's one of the things
(11:50):
that I've always had is this safetyaccount, both on my personal life and
in my business, so that Ido not touch unless it is an emergency.
So I have that set aside.We're going to continue with some more
tips on that as we continue ourmoney series, which I'm going to come
back to after I finish these topten mistakes that people make. So I
(12:15):
hope this was helpful to you.If you do not have a bookkeeping system
in place, then I highly recommendfind one. Ask around. How do
you find when you ask other peoplewho do you use? What software do
you use? By asking ten people, you're going to find exactly what you
(12:35):
need. And that is one ofthe things that I am lucky to do
in our community is to offer yousome really good resources, like here is
a really great person in bookkeeping,here is a really great web designer.
So then you will have access orbe able to at least see what that
person does and what they offered.So thanks so much everyone for tuning in.
(13:00):
We have one more in this series, so I'll be really glad to
get that one completed, and thenwe are going to come back to talking
about some fun tips for this fallholiday sales season. We're also going to
be talking about managing your money whenyou start to become successful in business.
(13:22):
It's a big deal. So Ican't wait to continue this conversation with you.
Thanks so much everyone. Don't forgetto follow our subscribe so you don't
miss a single great episode. Checkout our other interviews and guys, we
now have these videos on YouTube,so you can check those out as well.
(13:43):
Thanks so much everyone, And rememberthe greatest compliment that you can give
me or any one of my guestsis to share this with a friend.
Thanks so much everyone, and we'llsee you next time on work from your
happy place.
Welcome to Work from Your Happy Place, the podcast that equips you with the
knowledge and inspiration to live your dreamsand find your own happy plays. You
will be encouraged by and learn fromentrepreneurs and artists who are already working from
their happy plays, all while pursuingtheir passion with a purpose. Be sure
(00:20):
to sign up for our free weeklynewsletter for our recap of the week's guests
and a preview of what's in store. We also have two special gifts for
you, a video the five coreprinciples Still Living a half year Life and
a printable download title Top ten salesStrategies. Go to Work from your Happy
Place dot com, forward slash free. Fill out the attached form to receive
(00:44):
your gifts and be added to ournewsletter. And now here's your host,
Belinda Ellsworth. Hello everyone, andwelcome back. This is a continuation of
a series that we are doing forour Tuesday Tips in the top ten mistakes
that people make in business. Iwant to try to give you these tips
so that you can avoid them,helping you to get the success you want
(01:07):
in a much quicker time frame,or continuing that success as you grow your
business. I just want as afriendly reminder if you are in your own
business, if you own your ownbusiness, if you're trying to start that
business, scale your business, growyour business. I would welcome you to
take a look at our community workingfrom my Happy Place, where we have
(01:30):
an amazing membership as well as asubscription box that you can really utilize on
a monthly basis. So please checkit out on our website. All right.
Number nine is having a good bookkeepingsystem. Gosh, this is the
thing that is always not a lotof fun. It's the thing that a
(01:53):
lot of people don't necessarily have experiencein, and it's a lot that people
always think, I'll get to I'llget to it, I will get to
it. How many of you haveever found yourself like right before tax time
and now suddenly you are going backthrough all of the year before trying to
collect all of the information because youdon't have it in a here it is
(02:20):
and my fingertip situation. There's numerousreasons why bookkeeping is important. Tax time
is certainly one of them. Ifyou are keeping tracks of your books on
a regular basis, tax time willbe very very easy for you. The
other reason bookkeeping is important and ina good reason for you to at least
(02:43):
keep your eyes on it. Now, you might not do all of the
bookkeeping. I did my bookkeeping inthe early early years of my business.
That was one thing as I startedhiring people. I first hired a personal
assistant. Then I hired another galin my office. I'm trying to think
(03:07):
how that went. The first galthat I hired actually helped me get bookings.
Then I hired a personal assistant tohelp out with sort of the daily
routine things. And then my thirdhire was for a bookkeeper. Why because
it was just taking up a lotof time for me that I could be
(03:29):
talking to clients, or working onnew materials, or doing just about anything.
Right, what, here's the deal. I've always kept a strong eye
on that book keeping. So firstI was doing it, so I knew
the things that I wanted to makesure that we were keeping track of.
(03:50):
I had somebody doing it on aregular basis. One of the things I
always knew was my expenses. Andthis is the thing that people just don't
want to know. It's called aprofit and loss statement, So you need
to know, yes, this ishow much sales we've had, but really,
(04:11):
how much profit did you have.There are a lot of times as
you scale a business that you actuallymake less profit because all of a sudden,
I've got to order more inventory,I've got to hire more people.
And now with all the output thatI have, my sales might have increased
(04:32):
some, but my expenses have increasedof a more entire percentage than what I
was doing before. So, forexample, you might do five hundred thousand
dollars in sales, and you mightbe doing that mostly by yourself, maybe
(04:53):
with one other assistant or two parttime people. And here's after you pay
them and you pay for some ofyour other expenses, this is my actual
profit. Then you can suddenly moveup to doing a million dollars in sales,
and now you've hired you three timesthe people, and you've had to
(05:15):
get other additional things. You gotadditional shipping, or you've got additional product
costs, whatever the case may be. And suddenly your profit now is less
than when you were selling five hundredthousand dollars. That seems for some people
they would think, well, that'sridiculous, but it happens all of the
time, and you suddenly don't knowit. There's a threshold that you say,
(05:41):
wow, either we got to workthrough this pain point right here and
get to two million dollars and nothire anybody else and get the job done
with these, or make sure thatour expenses aren't increasing by double then we're
going to be actually making more profit. All of this only happens if you
(06:01):
have a book keeping system. Bookkeepingis also so I've said, it's good
for taxes. It's really good foryou to know like what your profit really
is. It is also a reallygreat way to handle expenses. Now I'm
going to be honest and transparent rightnow as I can be. So I
(06:25):
had a full time bookkeeper that workedon staff for all the way up until
COVID, And so after COVID happened, then I didn't and that bookkeeper left
and actually didn't want to come backto bookkeeping. She was coming into the
office like three days a week andthen she would work at home the other
(06:46):
day of the week. So thenI was suddenly like okay. So then
I had the one gal who wasworking in my office. I said,
okay, can you do the bookkeeping? And she was doing it like sort
of half days, part time,and doing her other duties as well well.
Then as time has gone on,she it was actually running her own
(07:10):
business, and she said, Inow can move out. I had this
job while I was building my business, and now my business has grown to
the point where I can leave.So then I was suddenly like, oh
my gosh. So then there wereother things that needed to happen. I
was doing some of the bookkeeping,but I was not doing a great job.
(07:30):
All of a sudden, real recently, I was like, I need
to do an audit myself. Andas I sat down and started looking at
the expenses of which I hadn't beenkeeping track of, suddenly I was like,
wow, we had two and threedifferent plugins and subscriptions that we had
(07:51):
for basically doing the same service.So we would get one and then somebody
else would say, you know whatworks better than but nobody would cancel the
other one. And so all ofa sudden, I do this complete audit,
and I realize that my expenses havegotten out of control simply because nobody
was watching it. And then consequentlyyour expenses start to supersede what the profits
(08:20):
that you have coming in. Youdon't ever want that to happen, my
friend. So if you think thatbookkeeping is just boring, you know,
making exciting. I love numbers.I love looking at my numbers. I
love analyzing the numbers. They're likemy own little personal coach that tells me
how well I'm doing. We talkedabout that in session five or our top
(08:45):
ten tip of mistakes that people make, when number five was knowing your numbers.
So I really want to encourage you. There's knowing your numbers, which
are analytics, but there's also knowingyour money, which is in book keeping.
So either have someone assist you,have a system in place, get
(09:09):
some software that works well for you, get a part time person, and
really sit down and understand what's happening. I recently touched to someone who's been
in business for thirty years and Isaid, you know, what are some
of the things that you have letother people do or what is a how
do you navigate sort of the businessside of what you do? And they're
(09:31):
like, I always write the checksno matter what. Now that's something that
I also had let other people do, but I do know. And when
he said that, I was like, yep, because when you're writing that
check, you know what's going outand then checking that with what is coming
in in your sales. I likechecking my sales compared to what I did
(09:56):
on this day last year. Ilook at it every single day when I'm
consulting with a company. Some companiesdon't have that in place, and I'm
like, I would like to seeevery day what our sales are, and
I want it compared side by sidewith what did you sell on this exact
day last year. Now, atfirst they were like, oh, can't
(10:18):
we just do it a week ata time, or can't we just do
could we do like, you know, two weeks, or how about we
just do it a month at atime, and after the month's over,
it's too late if you didn't hitthe same amount of sales or increased by
twenty five percent of what you didlast year. Why because we have no
way of adjusting. We have noway of saying, wow, we sold
(10:41):
one hundred thousand more last year onthe fifteenth. What the world did we
do? Then you look back andyou go, oh, step, we've
totally forgot about that, Like wecould do that right now, and you
can still do it if you're watchingit on a regular basis. This is
a little little bit about knowing yournumbers, but it's also a little bit
(11:01):
to do with bookkeeping. If youare looking at your sales versus your expenses
in the month and knowing it canstop you if you can look and say,
gosh, we only have this muchin the bank, or you know,
watching your bookkeeping where you are actuallypaying your balance of your credit card
(11:24):
or paying it by half, ifsuddenly it gets away from you and then
you have no buying power when youneed it, then you think I can
afford this bill, but you're reallynot able to afford the product that you
just got, so then you haveto say, Okay, I need to
have this amount of money in anextra fund. That's one of the things
(11:50):
that I've always had is this safetyaccount, both on my personal life and
in my business, so that Ido not touch unless it is an emergency.
So I have that set aside.We're going to continue with some more
tips on that as we continue ourmoney series, which I'm going to come
back to after I finish these topten mistakes that people make. So I
(12:15):
hope this was helpful to you.If you do not have a bookkeeping system
in place, then I highly recommendfind one. Ask around. How do
you find when you ask other peoplewho do you use? What software do
you use? By asking ten people, you're going to find exactly what you
(12:35):
need. And that is one ofthe things that I am lucky to do
in our community is to offer yousome really good resources, like here is
a really great person in bookkeeping,here is a really great web designer.
So then you will have access orbe able to at least see what that
person does and what they offered.So thanks so much everyone for tuning in.
(13:00):
We have one more in this series, so I'll be really glad to
get that one completed, and thenwe are going to come back to talking
about some fun tips for this fallholiday sales season. We're also going to
be talking about managing your money whenyou start to become successful in business.
(13:22):
It's a big deal. So Ican't wait to continue this conversation with you.
Thanks so much everyone. Don't forgetto follow our subscribe so you don't
miss a single great episode. Checkout our other interviews and guys, we
now have these videos on YouTube,so you can check those out as well.
(13:43):
Thanks so much everyone, And rememberthe greatest compliment that you can give
me or any one of my guestsis to share this with a friend.
Thanks so much everyone, and we'llsee you next time on work from your
happy place.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!