Episode 165 – Is Your Cleaning Company Making Money?
Keeping your cleaning business books up to date is something owners of cleaning companies struggle with. It can seem overwhelming if you get behind and a waste of time to deal with. Today Mike brings the heat with a special guest- Greg White, CPA and owner of White & Associates Mike and Greg discuss why your cleaning business books are important. How you can make your life better, your company more money and you happier! Just about every cleaning company owner wants to add customers and grow their cleaning company. Most don’t understand it makes no sense to add customers before you KNOW that your business is running profitably. The only way to know this is to have a good set of cleaning business books. KEY POINT: Don’t focus on growing until you have good cleaning business books and you KNOW you are making money. Proper accounting allows you to know if you are making money or not. Whether you can afford to buy new equipment, hire staff. Your cleaning business books contain all of the info you need to make good decisions and grow your cleaning company. If your cleaning business books are a mess, you might be in financial trouble and not even know it. Greg has had to counsel people to shut down their businesses that had no idea they were in such bad shape. All because they didn’t follow proper accounting methods. Proper accounting helps you: Live within your means Know your margins Know where to focus your efforts Understand WHY you are (or are not) making money Sleep well at night Mike acknowledges that many owners of cleaning companies feel overwhelmed at the idea of keeping proper books in their cleaning businesses. They know they should but they think it’s going to be a huge headache. BONUS LOVIN: Check out this free podcast on When to Hire an Accountant With today’s technology it’s not as big of an undertaking as you think. For most cleaning business bookkeeping, Quickbooks is a great option. You can link your bank accounts to Quickbooks which automates much of your bookkeeping. You can literally update your books every night before bed. It’s cheap, easy and there is no reason to be afraid. Mike asks about all of the owners out there whose books are a mess. They are afraid to even show them to an accountant.It’s a big scary black hole and they’re scared to dive in. Where do they start? Greg says- the first thing you have to do is do it! Take that first step to get comfortable. Sit down with your CPA and tell them what you want to accomplish. This doesn’t mean you should throw your shoe box full of receipts at a CPA and run out of the room. Find a firm that will walk you through the process and help you understand your cleaning business books. KEY POINT: It is NOT your accountants job to make sure you are making money- it is YOUR job as the owner! Get to the point that you’re comfortable with your business.Ultimately, you want to make money. Understanding your cleaning business books will not only help you do that but it gives you control in your business. So how do you find this amazing person that knows what they are doing and can help you take control? They should be asking questions. Here are some of the things a good accountant should be asking: Do you reconcile your bank account monthly? How are you reconciling. What do your balance sheet look like? What does your P&L look like? Greg suggests they should start with your balance sheet. Most owners of cleaning companies start with the profit & loss (P&L), but Greg starts with the balance sheet. Profit & Loss tracks income and expenses Balance Sheet tracks assets and liabilities KEY POINT: When your Balance Sheet is right, your Profit & Loss Statement is right!