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How to Target Your Most Profitable Client with Updated Bookkeeping

Aug 16, 2019

How to Target Your Most Profitable Clients with Updated Bookkeeping

 

A while ago, a man who was having a discussion with a business coaching client asked her if she had updated bookkeeping and accounting records that would help her make the best business decision for a big question about her business. “No”, she replied to him, she did not have updated books. Without updated books, any decision regarding product lines, pricing, or customer capacity is just a guess.

You do not run a business by guessing but by doing the exact opposite of that. Every business, no matter the size, should have regularly updated bookkeeping and accounting records so that business owners can make the right decisions with a foundation in the data. Follow along to learn three big benefits of keeping your bookkeeping and accounting records updated on a regular basis and some tips to get started with the bookkeeping for your business.

 

1 – Gradually increase your revenue strategically

One of the biggest goals of a freelance writer for his primary income should be finding the best clients that earn him the most significant return on time invested by him. While freelancing is a business that is difficult to scale, a freelance writer should “ladder up” his clients. What this means is that he should climb up and add new high-quality clients while letting go of lower-paying clients as they get replaced.

The process seems to be great in theory and the concept is easily understood by most freelancers and business owners. But if they do, why do they continue to struggle with low-paying clients? This is because they don’t look at the numbers and make it an objective to bring on better clients and get rid of low-paying clients. If you do not have any metrics, you might not be able to differentiate between the clients that are consuming and depleting your resources, and the ones bringing in the best profitability to your business.

Let us take a look at the story of a man who quit his job a few months ago to go full time into the freelance writing job.

 

After quitting his job, he took a look at his updated bookkeeping records and realized that 76% of his income came from writing online while around 15% came from website development and support. This is a clear 80/20 rule example. From this assessment, he goes ahead to cut 15% of his income that was taking way too much of his time. As a result of this decision, his total income roughly tripled over the next few months.

 

Related article: 6 Tips to Help You Get More Work Done

 

2 – Cut Products and Services that Are Not Selling Well

Back to the conversation between the man and the coaching client. The conversation this man was having with her was focused on turning her services into a product she could sell for a fixed monthly subscription rate. Unfortunately, she did not have detailed and updated accounting records beyond the reports she got from her payment processor and because of that, she did not have any real records to show her income by customer or by-product. This information is for every business owner, either you are a solo freelancer or you have a business with thousands of employees.

By having detailed and updated accounting records of your business, you can easily pick out the products that are taking too much of your time and are not bringing in much money. You will be able to identify tasks that can be outsourced or eliminated. As shown in the example above, cutting products or services that are not doing well can lead to significant growth.

The success in this area of your business has to do with how focused you are but without bookkeeping and accounting records that are properly updated, you won’t be able to know which area to focus on. You might end up wasting time and resources on the wrong areas because you don’t have enough data to help you discern exactly what you need to do. Stop making that mistake right now by keeping your accounting books detailed and updated at least once in a month. That way, you can make the best decisions on how to manage your business.

 

3 – Save time and money at tax time

In addition to increased revenue and reduced costs, another benefit of keeping your books updated is that it helps with paying your taxes. One of the inevitable things that come with owning a business is that you have to do taxes. You can’t avoid it. It can be stressful but you can avoid that by not waiting for the deadline in April before you get your bookkeeping and accounting sorted out.

Instead of rushing to get it all done at the dying hour, have a plan and keep your books updated at least once every month. Even better, you may choose to do it weekly but if you can do that, stick to doing it at least once every month. Whatever you choose to do, quarterly should be the bare minimum for bookkeeping updates for tax purposes.

Taxes are usually filed and paid just once in a year by most people but a lot of business owners have to pay taxes that are estimated quarterly. You can file and pay based on the previous year’s tax rates but keeping your books updated can help you get a better estimate if you have to pay more quarterly so that it doesn’t come as a surprise to you when the time to pay it comes around.

If your bookkeeping is updated, all you have to do is print out a P&L balance sheet and you can easily complete your taxes.

 

Related Article: 3 Major Benefits of Updated Bookkeeping Records

 

3 1/2 – Don’t Ignore Updated Bookkeeping and Accounting Needs

If for one reason or another, bookkeeping and accounting are hard for you to do, please reach out to us here at BooXkeeping. We deliver premium results at a cost made for your small business. We have a team of professionals who are always ready to give you the kind of service you and your business deserve. Please visit our website to see our plans  as well as all the feedback from our clients.

We also offer a free trial of our services to show you how we can help take away a bit of that small business stress and replace it with a great set of books.

If you choose to do your own bookkeeping, that’s okay, but make sure you do it regularly to avoid useless financial reports. When your books are updated regularly and accurately, you will be armed with all the information you need to make your business grow and thrive for a very long time.

 

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