Vita's Tip In 10: Mastering Monthly Meetings with Your Bookkeeper for Year-End Success

Hello, hello, friend! Welcome back to another episode of Vita's Tip in 10. Today, I'm continuing my series on end-of-the-year activities. Two episodes ago, we delved into my four favorite year-end tasks. Last time, we discussed the strategic move of front-loading expenses for a successful tax year. And today, I want to take you behind the scenes of a crucial monthly ritual—the month-end close meeting with your bookkeeper.

Now, this monthly meeting is a non-negotiable in my business. It's a drumbeat, a rhythm that keeps us in tune with our financials. Typically scheduled during the second or third week of the month, it's especially imperative to hold this meeting in December to prepare for the all-important year-end meeting with your CPA. So, let's dive into the details of what happens during these sessions.

My monthly meeting with my bookkeeper happens virtually, usually via Zoom or Teams. Even though my bookkeeper is local to me, we meet virtually and use QuickBooks Online for all our transactions. The first order of business is sharing the screen, often mine, so I can navigate the numbers at my pace.

The most critical aspect is going through the Profit and Loss (P&L) statement. We look at the year-to-date numbers, comparing them to the same period last year. This helps us gauge performance trends and identify areas for improvement.

Our attention starts with the revenue numbers. Whether it's a single line or detailed categorizations like fabric revenue, labor revenue, or more, understanding where the sales come from is key. Comparing this year's performance to the previous year provides valuable insights. XX

Moving on to the Cost of Goods Sold, we track it at a granular level. For us, this includes fabric, trim, hard goods, hardware, fabrication, installation labor, and workroom supplies. This detailed breakdown ensures accuracy and helps catch any misclassifications.

Example of installer’s salary LY gave me confidence to hire full time installer TY

Gross margin—the difference between revenue and cost of goods sold—is a pivotal metric. Aiming for 60-65% is the goal, and comparing this to last year's performance guides us on the right track.

Transitioning to operational expenses, we go through each line item. From gas, to subscriptions, to phone and internet, to rent, to software subscriptions, attention to detail is crucial. Paying close attention to categories prone to overspending, like office supplies, helps optimize expenses.

As the most substantial operational expense, payroll demands special attention. Whether you're a solopreneur or managing a team, it's essential to account for your salary as part of operating expenses. 35%-30% of your revenue

While avoiding an excessive number of categories, it's helpful to drill down where necessary. This ensures accurate tracking and visibility into significant expenses.

After dissecting revenue, cost of goods sold, and operating expenses, we arrive at the bottom line—net income. This meticulous review ensures nothing falls through the cracks.

I love me a clean P&L.

Now it’s pretty fast. When we first started, we had to make decisions about ….

In addition to the P&L statement, we review the Accounts Receivables (AR) report to track outstanding payments. Customer profitability is also scrutinized, thanks to disciplined coding of costs to specific projects.

While this process might seem overwhelming at first, the key is consistency. Monthly meetings with your bookkeeper become routine, making year-end reviews a breeze.

Now, if you're comfortable with numbers, you might wonder if you still need these monthly meetings. My answer is a resounding yes. These regular sessions hold you accountable, preventing the temptation to procrastinate and ensuring you stay on top of your financial game.

Yes, these meetings are time-consuming and require attention to detail. The more regularly you engage with them, the more second nature it becomes. The payoff is immense—clear financial insights, early identification of anomalies, and a robust foundation for strategic decision-making.

And why is this especially crucial in December? Well, it sets the stage for your meeting with the CPA. Instead of navigating through transaction geographies, your CPA can focus on advising you on strategies to optimize your tax liabilities.

That's a wrap, my friend! Your tip for the day—master those monthly drumbeat meetings with your bookkeeper. Whether you love numbers or find them intimidating, this routine ensures a firm grip on your financial health.

And if you're not feeling confident about managing your business’ finances, and want more insights on financial management, mindset shifts, CEO strategies, or digital project management tools, I’ve got you!

You can join my Systems Driven Operations class at LuAnn University – registration is open and early bird pricing ends December 19th! Alternatively, opt for my VIP Experience, a private, two-day in-person intensive where I literally hand over everything I’ve got. There are limited spots left for 2024, and pricing will be increasing next year.

Reach out to me, and let's schedule a conversation. Meanwhile, I'll be working on my next episode of Vita's Tip in 10. Talk to you next Thursday!