Ask My Bookkeeper Anything! Let’s Talk $$$ with Madison Brown

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of the year

Ask My Bookkeeper Anything! Let’s Talk $$$ with Madison Brown

Reading Time: 4 minutes

This episode all about bookkeeping for business finances is a total TREAT. My bookkeeper, Madison Brown is here to answer all of your business bookkeeping questions. And yep, your actual questions! I asked you guys on Instagram what bookkeeping questions you wanted us to tackle and those are the exact questions we are answering here.

LISTEN TO THIS EPISODE NOW:

Listen & subscribe on your favorite platform:  Apple Podcasts  |  Stitcher  | Google Play  |  Spotify  | iHeartRadio

Search for episode 102!

Madison Brown and Elizabeth McCravy talk all things bookkeeping on the Breakthrough Brand Podcast.

Madison and I have a very nontraditional story about how we started working together! It really is so fun so make sure you tune in to the full episode to hear us tell that story! I am recapping here most of the questions that I asked Madison and some of her answers. To hear ALL of the amazing wisdom that Madison brings to this interview, make sure to listen to the full episode! 

How are bookkeeping and accounting different?

Any Grey’s Anatomy fans out there? Madison answers this question with a great analogy from Grey’s Anatomy! She says that a bookkeeper is going to help you paint a picture of your business finances and help you get a really good idea of what is going on with your books. This is similar to x-ray techs who are actually gathering the data for the x-ray to be produced.

That x-ray is then passed off to the surgeon who looks at it and decides what to do next based on what it says. An accountant or CPA is similar since they look at your books and help you create a strategy for your business. They can also help you file your taxes and they will know all of the IRS rules and regulations.

Your bookkeeper is going to look at your books every month but usually, you are going to need an accountant less throughout the year and more for specific things.

When do you know it’s time to hire a bookkeeper for your business?

Madison says that for the most part, people really can be their own bookkeeper for a while after starting their own business. It really isn’t until you are stepping into your CEO role that bookkeeping begins to become below your paygrade. 

It really starts to make sense to hire a bookkeeper once those responsibilities are taking too much of your time away from other important things in your business. 

Another thing to note is that if you are someone who has a high transaction rate, you might need a bookkeeper sooner than someone who is only service-based and doesn’t have as many transactions to keep track of.

Madison stepped into my life as my bookkeeper earlier in 2020. Before working with her, I was using QuickBooks Self-Employed by myself for the categorization of everything, which is really a great system!

giphy-bookkeeper

Why do we need bookkeeping software instead of just spreadsheets?

Before starting to work with Madison, I was also using my spreadsheets for actually tracking the money that came in and went out.

Now, you know I still LOVE my spreadsheet because it gives me real-time numbers and an easy way to track upcoming payments. Madison loves spreadsheets too! BUT she says that one of the biggest problems with using spreadsheets (especially if that is all you are using) is that there is so much room for human error. 

She believes it is so important to use a software or a bookkeeper in addition to your spreadsheets! 

Another reason that Madison recommends using an accounting software is that it gives you really good reports! You can use your data to run specific reports to get a good picture of your bookkeeping for business finances. These are things you wouldn’t get to see with just a spreadsheet. 

If you want to make money in your business, you have to take yourself seriously! - Madison Brown

What reports are important for bookkeeping for business finances?

Madison says that the most important report that you can look at for your business finances is your profit and loss statement! This report can also be called an income statement. This is the best way to get a really clear picture of how your business is doing. 

Tune in to the full episode to hear Madison break down this report and to hear a little bit about what this report looks like for me!

Another report that Madison says she likes to run for her clients is a custom report called “Sales By Product/Service Summary. This report is exactly what it sounds like and give you an idea of how each product or service is benefiting you. 

Where to start with bookkeeping for business finances?

Madison says that the first thing you need to do is start taking yourself seriously! If you are just working a side hustle that doesn’t make you a ton of money, it isn’t a big deal if you don’t pay close attention to your books. But if you are actually wanting to grow your business and make money, you have to decide to go for it! 

The key to starting your bookkeeping for business finances is to open a business bank account! It is so much harder to categorize and keep track of transactions when your personal and business are mixed together.

The key to starting your bookkeeping for business finances is to open a business bank account! -Madison Brown

How do I know what to pay myself and what to save for taxes?

This is a question that Madison says she gets all the time! There are so many differing opinions on this question but the method she shares is what she uses for herself and what she advises others to use as well. 

Madison says you want to look at your monthly net income that can be found on your profit and loss statement. From there you need to calculate your tax savings. Paying taxes is not optional so you want to make sure you keep that money aside to pay your taxes! Madison recommends you set aside 30% of your net income for taxes.

After that, you have 70% of your net income left and you want to take into consideration what your business debt is. Take out any monthly payments towards the business debt. 

Next, LOOK FORWARD! Ask yourself if you are planning on making any large purchases or have anything you need to be saving for in your business. If so, take that money out.

Now you should have your bottom dollar. If you need all of that money, take it! If you don’t need all of it and can leave some in the business account, that is a great option too! This isn’t a one size fits all situation and can be customized to support you! 

Curious about more bookkeeping for business finances info? Madison and I talked about so much more in this interview and I hope you will listen and take away the wisdom and confidence to get your books in order! Hire a bookkeeper when you are ready to step into your CEO role and really take your business to the next level! 

Meet Madison Brown from Madison Dearly Bookkeeping here to answer all of your questions on the Breakthrough Brand Podcast.

Meet Madison

Madison is from Houston, Texas, and is the owner of Madison Dearly Bookkeeping. She serves online business owners of all kinds by taking the bookkeeping responsibilities off of their plates to free them up for other CEO responsibilities in their business.

Ask the bookkeeper anything! With Madison Brown and Elizabeth McCravy on the Breakthrough Brand Podcast.
Ask the bookkeeper anything! With Madison Brown and Elizabeth McCravy on the Breakthrough Brand Podcast.

January 26, 2021

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see my top biz resources

see my top biz resources

podcast

freebies

Recently Launched

NEW Podcaster template

Oh, you wanna know more?

design

business

marketing

my client work

personal

listen to the podcast!

I'm Elizabeth, and simply put, I design brands and websites. I mix in marketing strategy, personality galore, and tons of fun to create custom brands, custom websites, and website templates. These designs convert lookers into buyers and take the headache out of the design process. I believe your brand should be a knockout. I'll help you create a captivating + profitable online presence! Join me, won't you?!

Hey there!

of the year

@ELIZABETHMCCRAVY

Let's be friends, yo.