Wednesday, June 7, 2017

[WATCH VIDEO TUTORIAL] How to Navigate In QuickBooks

How to Navigate In QuickBooks

This video shows you where to find everything you need to use QuickBooks with confidence. Learn where to go to create common things like invoices and sales receipts, where to see all your customers' info, and where to find your company settings and other QuickBooks features.

Buy Now or Try it Free!

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Tuesday, June 6, 2017

[WATCH VIDEO TUTORIAL] See Your Business Health in QuickBooks

See Your Business Health in QuickBooks

This free tutorial will help you manage your expenses, see your profits and losses, and make sense of the money going and out of your business.

Buy Now & Save or Try for FREE!


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Monday, June 5, 2017

The 6 Essentials of a Basic Cash Flow Statement

A Cash Flow Statement—or a Statement of Cash Flows—is a major financial statement used to track the flow of working capital into and out of a business during an accounting period. While the Income Statement and Balance Sheet are helpful for understanding the financial standing of a company, they do not take into account the complexity of cash flows over time. Cash flow analysis is critical for small businesses, and should be evaluated on a quarterly and monthly basis, if not a weekly or daily.

Cash Balance

You begin with the company’s total cash balance at the start of the chosen period, which can be found either at the end of the previous Cash Flow Statement, or (if that’s not available) from the Balance Sheet. Cash flows are then determined by looking at flow of cash within three major categories: operations, investing and finance. Write out the income and payments involved in each of the following categories, and record inflows as a positive number, and outflows as negative.


  • Operating activities are the main source—and cost—of the company’s cash. These are the direct and indirect costs that are associated with selling a product or service. They include the company’s income from sales (which is calculated in the Income Statement) as well as cash flows that are not normally taken into account in Income Statements. Operational activities include:
  • Cash from Continuing Operations: This is essentially the inflow of cash from sales, as well as the outflow of payments to suppliers and company employees. This number can also be taken from the “net income” calculated in the Income Statement.
  • Rise or Fall in Accounts Receivable: Accounts receivable refers to money owed to the business by a customer or client for services or goods already delivered. If the amount of accounts receivable has increased, this increase should be subtracted from the total, since it represents money that has not been received—if the accounts receivable has gone down, the amount should beadded.
  • Depreciation and Amortization: Next, calculate any decrease in the value of the business’ assets. For example, if a piece of equipment is worth $10,000 and it will function for about ten years, the depreciation value of that equipment will be $1,000 per year (thus recorded as a loss of $1,000 for that period). Depreciation refers to the loss of value in physical assets, while amortization refers to intangible assets such as patents (which expire and will therefore lose their value over time as well).
  • Income Taxes Paid: The payment of income taxes is considered an outflow of cash under operating expenses, unless they are directly linked to investing or financing activities.


Investing activities involve buying and selling assets or securities that are not related to the inventory and other operations. This can include long-term assets such as property, equipment, investments, stocks and loan payments that have been given or received by the business. This section will often be in the negative, since it involves the disbursement of cash into various assets and investments.

  • Equipment and Property: Any payments made towards the purchase of fixed assets, such as equipment or property, will be marked as an outflow. Any income from the sale of these assets will be counted as an inflow.
  • Securities or Investments: Any outflow or inflow of cash due to the purchase or sale of stock or securities by the company should be marked here.


Financing activities include issuing or purchasing stock or equity, borrowing money, repaying debt and handing out dividend payments.

  • Proceeds From Long-term Debt: This refers to the cash received or paid out by the business for long-term debt such as bank loans or government bonds.
  • Dividends Paid: A small portion of company profits that are issued to stockholders. This should also include payments towards dividend taxes and will be recorded as an outflow of cash.

New Cash Balance

Add up the positive numbers (inflows) and negative numbers (outflows) of cash under operating, investing and finance activities, then add those three values together. Subtract the previous statement’s cash balance from current period to determine the net increase in cash and cash equivalents. To learn more about how to calculate cash flow on a daily, weekly or monthly basis see here.


Cash flow analysis shows that the value of a company at any particular moment may not accurately represent its overall financial health. Many companies can operate successfully with debt and accounts receivable if their growth is based on reliable future earnings. In the same token, a company can be worth a lot in assets but if their ability to maintain and inflow of cash remains unpredictable they have reason for concern.

Cash flow projections and sensitivity analyses are used by businesses in order to evaluate future cash requirements, ensure their ability to pay suppliers and employees on time, secure capital if necessary and avoid a cash flow crisis. A cash flow forecast is considered one of the most critical early warning systems for companies that operate with debt, and should be done on a regular basis.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Sunday, June 4, 2017

The Risks You Take Not Managing Your Small Business Finances

Managing small business finances can be challenging for some small business owners and entrepreneurs, and many of you may be neglecting the management of your finances because there's other aspects of your business you find easier to do and you're good at it.

Keeping your small business financial records up to date, organized and accurate is one of the most important responsibility for an owners, solo entrepreneur or manager of a business.

There are many risk you take in the success and growth of your business when your do not maintain up to date and accurate financial records for your business.

Here are 5 things that could happen if you're not practicing a basic record keeping system:

  1. being audited by the IRS
  2. loss of income
  3. unable to make good business decisions
  4. unable to monitor the progress of your business finances
  5. higher fees for tax preparations

But creating a basic record keeping system to manage and maintain your small business finances can:

  • prepare you for an IRS audit.
  • identify income sources and reducing expenses where needed.
  • give a better overview of the position of your business to make effective decisions for growth and success.
  • ability to produce financial statements to see the progress of your company's revenue, expenses, assets, liabilities and other finances.
  • reduce the cost of tax preparation with well-organized financial records.

It could be as simple as organizing your receipts and invoices in an accordion folder and keeping track of your income and expenses on an excel spreadsheet. 

But if you choose to get more technical there are many computerized accounting programs you can use. I highly recommend QuickBooks to my clients, because you can choose either online or desktop version, whichever suits your business and it provides all the functions and features you need to manage your business financial records; whether you're a startup or emerging business.

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.  

Join BMFMS on Social Media!

Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Wednesday, April 12, 2017

How the 80/20 Rule Helped Me Double My Income in Two Months

When I first read about the 80/20 rule, or the Pareto Principle, I had a healthy skepticism for it. I couldn’t wrap my head around how 80 percent of my work would only lead to 20 percent of results and that the remaining 20 percent of my efforts would lead to 80 percent of my profits. Over time, however, I started to see some patterns that would prove the 80/20 rule to be completely true. Once I took steps to implement what I learned from it, I doubled my income in about two months! Read on to learn how it happened and how you can apply the 80/20 rule to your business.

Does the 80/20 rule apply to your business?

When I still had my old day job, I took some time to assess my projects and found that the 80/20 rule held true to some extent. There were some projects I was incredibly efficient at completing and always impressed my boss. Others took up a ton of time and led to huge frustration for little reward. By focusing on the projects that led to the best results, I was able to improve my efficiency and landed a promotion with a fat raise.

But with a boss who dictated my to do list, I had limited ability to implement 80/20. When I left my day job and went full-time in April 2016, I hustled and took every dollar I could get. But that strategy left me feeling burned out and tired while struggling for the profitability I wanted. It was around then that I realized it was time to look at my business with an 80/20 lens.

The 80/20 rule was nearly spot on for my business

From June through September, I earned $5,000-$8,000 per month in revenue. Good income, but not great. And living in expensive Southern California and paying for expensive rent and insurance on my own, a $60,000 annual revenue rate would leave us struggling to get by. I was working long hours but no matter how hard I hustled, my income wasn’t making any big jumps.

I started talking through my revenue, business strategy and where I was spending my time with my wife and members of my mastermind when I realized that my website development business was earning far less with more hours than the writing side of my business. That’s when the 80/20 came back to mind.

I quickly glanced at my accounting reports and saw that I was earning a little over 85 percent of my income from writing but was spending about 75 percent of my time on website work, which was bringing in around 10-15 percent of my revenue. Holy 80/20 Batman!

Implementing 80/20

After talking it through with my mastermind, I decided it was time to shut down my website support business in favor of focusing on writing. I slowly started turning away hourly work, then bigger website projects, then monthly recurring clients. I still have a few long-term clients in my web business, but for practical purposes it is shut down.

At its peak, I was earning around $2,000 per month from website support and development. Not chump change, but also not enough to bring in the big income I wanted and support my family in SoCal. Shutting down freed up so much time that I was able to focus on bringing on new writing clients and could stop wasting time on sometimes frustrating website projects.

Watching my income skyrocket

At the same time I shut down my website business, I was bringing on new clients that I met at the FinCon conference. All of the free time helped me destress and focus on those new clients, and the results started to appear in my monthly income statements.

In August I brought in $6,900. In September I made $7,300. In October I made $14,800. In November I broke through $16,000! I doubled my income in two months! Now I work less, enjoy what I do more and had a couple of months where I earned over double what I was paid at my old day job.

It turns out that economist Vilfredo Pareto knew what he was talking about. 80/20 completely revolutionized how I look at my business. I’m earning more and I’m happier than ever. Since adopting 80/20, I have not had a month below $10,000 in income.

Applying 80/20 to your business

Can your business benefit from 80/20? Odds are that it absolutely will. You may not see such dramatic results, but you can always improve by looking at what’s working and what isn’t working in your business. If something works well, repeat. If something doesn’t, stop doing it. In life and business, that is the best strategy to follow.

Image Credit: Shutterstock

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Tuesday, April 11, 2017

The Freelancer's Approach to Managing Expenses and Getting Paid

According to the Freelancers Union, 54 million Americans are considered independent workers, a number that is only expected to rise in 2017. Now that we’re in another tax season, it is important that the nearly one-third of Americans who are considered freelancers develop a process that efficiently allows them to track expenses and other critical business documents. Proper expense management ensures that freelancers are getting reimbursed for their job-related expenses and allows them to maximize tax deductions while protecting themselves in case of an audit.

While efficient expense management is vital to any freelancer’s business, the abundance of available and differing technology can make it difficult for a freelancer to map out a cohesive workflow that best suits their needs.

The data within business documents is vital to proper expense reimbursement and tax filing, so it’s important that a freelancer’s workflow can collect data from multiple sources, including emailed receipts and paper invoices. Thanks to today’s mobile technology there is no longer a need for bulky scanners. Modern expense management solutions can turn a smartphone’s camera into a mobile scanner. With the proper mobile application, freelancers only have to snap a photo of a business document to extract important data points, like totals, dates and vendor names to be sent to accounting software.

Many of the businesses that freelancers work with rely on powerful accounting software, like QuickBooks® or Sage, so it is important that they consider an expense management system that directly integrates with the most popular accounting software on the market. Accounting software integrations promote a streamlined data entry process and gives the freelancer peace-of-mind, knowing that the right information is being put into the correct data fields.

It’s important that a freelancer’s expense tracking workflow functions in the cloud. Considering most freelancers operate out of home offices or during off hours, they need access to their most important business documents at all times – whether they’re in their minivan waiting for their kids to get out of school, or burning the midnight oil with a much-needed glass of wine.  In addition to ease of access, cloud capabilities allow freelancers to better collaborate with their clients, ensuring they’re always on the same page.

More advanced expense tracking solutions even allow freelancers to assign tax categories to receipts and other documents. By assigning tax categories from the initial input, freelancers can save valuable time when using tax software, like Turbo Tax®, or save their hard-earned money by eliminating a specific process that an accountant or bookkeeper would otherwise charge a fee to execute.

As freelancers implement their expense management process, it is important that they always take a holistic view of their approach, and continue to tweak their process so that an efficient and streamlined workflow is developed. Freelancers cannot afford to be stagnant when it comes to managing their expenses. Once tax season is over and freelancers have filed their taxes, reviewing process pain points and how to remedy them is critical to promoting a more efficient workflow.

Access to state-of-the-art technologies that provide different services and solve for different deficiencies means there is no “one-size-fits-all” approach to expense management for freelancers. As freelancers build and expand their business, they should consider new tools and technologies that are able to scale with their growing business. 

Image Credit: Hero Images | Getty Images

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Monday, April 10, 2017

5 Signs You Need Money Counseling, Not Marriage Counseling

Many couples blame their marriage problems on disagreements and an inability to see eye to eye. Marriage counseling is a great option for couples who need to learn how to better communicate, but it might not solve the problem that caused a disagreement in the first place, especially if the problem involves money. So because money is a leading cause of stress in relationships, couples may want to consider money counseling before heading to a marriage counselor.

Nearly three-quarters of all Americans experience some kind of financial stress, according to the American Psychological Association. When you are in a relationship with a partner who has different views or values about money, this stress can become further exacerbated.

Throughout my years in the financial services industry, I have noticed that money counseling and marriage counseling often go hand in hand. One of my good friends, Leslie Webb, is a psychologist and will frequently send me her clients to help them budget and examine other underlying financial issues that may be causing their relationship stress.

To put it simply, in her own words, “If these financial issues don’t come to light, the marriage is doomed.”

So, how do you know if your problems are money related? It is not always obvious whether you need marriage counseling or money counseling but, here are some common warning signs that your relationship might be in financial trouble:

1. One partner handles the money, while the other wants nothing to do with it.

When it comes to managing household finances, both partners should be involved, or at least be aware of where money is being spent. Leslie and I are both currently experiencing an epidemic of clients who have mentioned that, within their relationships, one partner manages the finances and the other never looks into what he or she is doing. Societally, we used to view men as being responsible for a couple’s finances, but this is no longer the case. Both partners should have a role in managing money.

2. You have separate bank accounts.

If you both want to keep an eye on your money, separate bank accounts might seem like a good idea, but they can actually cause a lot of financial stress in a relationship. Managing money should be a joint effort, and separate accounts do not allow you to work together as well. Having separate accounts can lead to one partner hiding expenses or debts from another and can create animosity, because there is usually going to be judgment against how one partner is spending.

3. You have different values about spending and saving.

Just like religion and politics, it’s important for couples to have similar values when it comes to money. This is something that’s often overlooked in the early stages of a relationship, but it tends to surface and cause tension later on. Before getting serious, it’s important for couples to talk in detail about what kinds of budgets and savings they have. These conversations are sometimes uncomfortable, so many people avoid them. “I think you should show copies of tax returns,” Leslie recommends. “This is rarely done and can make people uncomfortable, but it’s a great step in really getting honest about your finances.” It is also a good idea to talk about how your families handled finances when you were growing up. Because, more often than not, as people age and start taking more responsibility for their finances, they start doing things just like their families did.

4. You have different socioeconomic backgrounds.

Having a different socioeconomic background than your spouse can cause more issues than you might think, because you’re likely used to handling and thinking about money differently. For example, someone from a wealthier background might not be used to worrying about money, while someone who grew up in a lower-income household might be more accustomed to saving, or might carry some debt. Money is power, especially in relationships. While it’s not necessary to date within your own socioeconomic status, it is important to have open and honest conversations about how you view money. This is especially true if one partner makes more than the other. Even if the intention is to be equal, the person bringing in more income is inherently more powerful.

5. You have different views on debt.

This is something my wife and I have had to work through. You should always be honest with your partner about how much debt you have, but it’s also important to be on the same page with how much debt you’re comfortable accumulating. For example, my wife and I came from pretty different backgrounds. I was raised by two business owners who often took risks with their money and had debt. My wife was raised by two employees, so she was much more accustomed to having a steady stream of income. Especially if one or both of you has large-scale debt, you need to be on the same page about how to manage it and eventually pay it back.

So, how can couples with money issues get back on track? If you’re looking to do it yourself, David Ramsey has great resources, and Leslie and I both recommend him to our clients. If there are bigger issues, I would recommend seeing a financial planner. Just like with marriage counseling, it sometimes takes a third point of view to resolve issues in a relationship. A good financial adviser can help you achieve that balance in your bank account and in your personal life.

Image Credit: iStockphoto

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Friday, April 7, 2017

13 Totally Useless Expenses Your Company Is Wasting Money On

Small businesses are often pinched for cash--especially if an unexpected bill needs to be paid right away or a check from a big customer gets mailed too late for you to cover your payroll for the month.

Your business should expect the unexpected. And one way to do that is to set aside a contingency fund that amounts to 10 percent of your monthly expenses. If you're looking for ways to get that rainy day cash, here are 12 expenses that are ripe for cutting and one more idea that will help you get more out of your people.

1. Cut food costs

Each employee in your company could save about $3,000 a year by bringing in his or her own lunch and brewing their coffee at home and bringing it into work. For example, while lunch at a deli might cost $12, people could make their own for about $3 and instead of paying $2 for a Starbucks, they could brew coffee at home for 45 cents. Spread this out over a year for all your employees and such savings add up.

2. Do tasks in-house

Some small businesses pay thousands of dollars to outsource projects. But your company may be able to save a considerable amount of cash by taking part or all of those projects in-house and give them to part- or full-time employees.

After all, outsourcing work can make it hard to communicate clearly what you want done--resulting in costly errors and delays. So it's worth analyzing whether hiring a dedicated worker could pay for itself within a year.

3. Use energy-efficient appliances

If you aren't using fluorescent light bulbs or keep your computers running when they're not being used, your company has an opportunity to save cash. Using fluorescent light bulbs instead of incandescent ones can save you up to $15 per kilowatt-hour. And turning off your computer in the evening can save $30 a year.

4. Cut unneeded technology

Many services are available for small businesses at low or no cost via the cloud. These range from computer backup and recovery to payroll processing. If you are paying for software or service providers to perform these tasks, you ought to consider whether you would save money over the next 12 months by canceling those contracts and replacing them with cloud-based services.

5. Keep up with credit card due dates

Many businesses make the costly mistake of not paying off their credit card bills each month. For example, a few years ago, the percentage of businesses that financed themselves with credit cards grew from 16 percent to 59 percent, and 60 percent of business credit card users did not pay their bills on time--making them liable for paying interest rates that are almost always north of 20 percent along with fees that pile up fast.

Keep track of your credit card due dates each month so you don't throw money away on interest and fees.

6. Cut back on trade shows

Trade shows can pay off--but they definitely require a big investment for travel and fancy-booth expenses. What's worse, if you go to shows that don't attract many potential customers for your product, all that money could go to waste.

So scrutinize each show you could attend, and go only to the ones likely to yield far more new sales than it costs to participate.

7. Trim postage waste

If your business mails packages, it may be throwing money out the front door if you use postage stamps instead of buying a meter. That's because you might be putting more postage on your envelopes than you really need. For example, a five-ounce envelope might require $1.69 in postage--but if you put four 44¢ stamps on the envelope, you would be throwing away a dime.

At 30 envelopes a week, that would amount to $3 in excess postage, or $156 per year.

8. Stop worthless advertising

It is hard to measure the effectiveness of advertising--especially if you spend your ad budget on TV, radio, or print media like newspapers or magazines. But there are wide variations in the advertising rates--for example, print advertising can be many times more expensive on a cost-per-impression basis than online ads.

Consider whether you could get more value by switching your advertising to Google AdWords, if you haven't already.

9. Dismiss workers who don't perform

One of the biggest ways to stop wasting money is to dismiss workers who don't contribute. What's more, you should make sure that all the workers on your payroll who do contribute are doing far more than the minimum required. If you can't motivate your C players to act more like the superstars, cutting them from the payroll will give you the money you need to hire more A players.

10. Team up with other small businesses to get volume discounts

If you regularly buy certain items for your company--such as printer cartridges for your inkjet or laser printers--consider getting together with other small businesses so you can use your joint purchasing power to negotiate volume discounts.

11. Track expenses

Your small company is almost certainly wasting money if it does not keep close watch on its expenses. You may think your time is better spent on selling or building new products--but if you don't track your expenses, you make sure you give that job to someone who is detail-oriented and trustworthy.

Even if everyone in your company is being frugal--if employees know someone is watching what they spend, they will be even more careful--if you keep and track a budget, you will save your company money.

12. Cut your insurance bills

Are you really paying the lowest possible rates for the insurance your business needs? You might be able to compare insurance policies using online services and spend less by buying insurance directly. Or, find an independent insurance agent who would go to bat for you when you have a claim. That agent should be able to find you the best deals to meet your business needs.

13. Tap employees' full potential

If your company employs people whose training would enable them to do bigger jobs--but they are asked to work way below their potential--then you might be able to save money by giving them more work that taps their skills.

Ask employees about their background and interests. There's a chance that they could do more for you--and get more motivated about working with your company over the long run.

These 13 tips will help keep your company from throwing cash out the window and provide some cash for a rainy day.

Image Credit:Getty Images

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
Like us on Facebook! Connect on LinkedIn! Follow us on Twitter! Pinterest! Google+!

Westchester Networking for Professionals Headline Animator