BIRD WILLIAMS: You're listening to Bird Means Business Episode 24. 

Well, hello there! I'm so glad you're here. Truly, thank you for taking precious time out of your day to tune in to the Bird Means Business podcast. I just want you to know that whenever y'all send DMs or you know share about the podcast in your stories, it means so much to me. Not because it's about me, but because I know that it's helping you. That is really what makes all of the hard work not in vain. So thank you. Thank you for the love. I really appreciate it. 

So you can have all the marketing strategies y'all, all the streamlined operational systems. You can have this amazing vision for your business and a great solid team. But if you missed the money part, you're missing a lot. Because the numbers, turn a fun hobby or a side hustle into a viable business. So I am super excited about this two-part series on Bookkeeping, Payroll and Taxes. And for those of you that don't just like light up when you hear those three words. I promise I'm gonna make this fun and easy to digest. So disclaimer. I am not a tax professional. I'm not a financial advisor or an accountant. You will want to make sure that you consult with a professional on any of your personal or business financial matters. All right? 

So the idea for these episodes came from a question I received from one of you on Instagram. @nikeairdavid wanted to know what I learned the first couple of years when dealing with year-end taxes. Oh Lord, and if we should be educated on that subject and how to account for that when business planning. So I am going to answer that question. Over the next two episodes, this is part one. 

When he asked the question, I immediately thought of a related question that one of my core students asked at the end of our course. I did a course on developing a profitable business plan back in January. And one of the young ladies asked about taxes and about how to track her business expenses and how to pay herself from her business. Remember y'all I said I'm not an accountant or a tax professional. Well, Alby is. So today's episode is sponsored by my very own accountant, Alby Abraham. And if you listen to the pod from the beginning in Episode Two “Secure Your Money Team”, which by the way is one of the most popular episodes on the podcast, you've heard about Alby. We've worked together for years. And to this day, when I sit down with him to talk about my finances, or even introduce him to clients, I am still learning so much from this guy. And on top of how brilliant he is, he has a huge heart, and he has a great team with his accounting firm. And so I'm just really excited that he's sponsoring the podcast, once again. I'm going to be mentioning an accountant a lot through the episode. And if you don't have one that you trust that you really vibe well with. Check out Alby. He's actually, like I said, sponsoring the podcast. So it's super awesome because the podcast is so new. So again, huge heart. So grateful for him to do that. You can go to birdwilliams.com/alby to get his contact information and make sure when you call him to mention the Bird Means Business podcast to book your free initial consultation with him. All right? I'm telling you when you do this you're gonna feel like okay, everything's lining up. I'm taking care of business and let's go. So that's going to be your first step is getting an accountant. 

Okay, let's go ahead and jump into the episode. So as I said this is a two-part series on Bookkeeping, Payroll and Taxes. And Alby helps me with all three of those in my business. So first we're gonna start with bookkeeping. Let's go ahead and define bookkeeping. So this is the way that you track your business's transactions and record the financial activity in your business. First and foremost, we're going to go into the different ways that you can actually do this and track your finances. There's an important point that I really want to make. You need to have separate accounts between your business and your personal. Y’all, this is very important. If you have not started doing this, literally start today. Don't even feel bad. Don't beat yourself up over it. Just start right now. As in, go ahead and call your bank and say hey, I want to set up a business checking account. If you have questions on what type of business, you know, bank to work with for a business checking account. Hit me up. And that's a whole other thing. We don't have enough time on the podcast to go into that. But you want a bank that is super flexible, that has very low fees. You want to set up your business checking account and you also want to get a business credit card if that's how you operate your business. The way we do it is we have a business credit card that we run all of our transactions through that we can. We use American Express, and we pay that credit card off every month. And it's great because we get so many points that we are able to use those for fun things for the business, gift cards, charity stuff, however we want to use it. We do it for our personal as well, separately. Separately is key right there. And we're able to use those points for vacations and such. So you want to call your bank, set up your business checking account, get a credit card if you're able to pay it off every month. And then you're going to go online or call all of your vendors and you're going to change where your business revenues are being deposited, and where your business expenses are being withdrawn to this new business bank.

I've worked with people who don't have separate accounts. So you want to make sure you do that. It's very important. And the biggest reason is because of liability. Let's say we mixed our personal and business bank accounts. It would be very hard/impossible to prove that we use the business's money for business things and personal money for personal things. And that would therefore trigger what's called ‘piercing the corporate veil’. People will also say is like the Chinese wall. That’s actually a different term. Anyway, piercing the corporate veil. 

So if someone got hurt at the gym and sued us. So if you don't know, I own a gym here in Houston, Texas with my husband, Terry. And if we had our funds commingled and someone got hurt at the gym and tried to sue us, we don't have separate bank accounts, and we don't file separate taxes and have separate assets and all of that. They could actually come after our personal taxes which means our cars or our house because we pierced the corporate veil. That's why it's so important for liability. Side note, even with separate bank accounts, let's say that you used your business credit card for a personal purchase. You're also there piercing the corporate veil. You might be thinking, well my business is so small, there's no way that I'm going to get sued for something, or if they do like there's nothing that they can really take. Well okay touché. But I will say two things. One, those were someone else's famous last words. Okay? And two, you my friend, are the real deal. You're in this for the long haul. We're not playing games over here, girl. So, you are aspiring to have this six-figure business or a seven or eight-figure business. You need to act like you already have one. Go ahead right now and establish strong principles, financial discipline now. And I promise you will thank me, okay?

So separate bank accounts is step one. And if you're concerned, how I transfer money like if I want to pay myself if my accounts are separate? Will that get hard or difficult? I got you covered. We're going to talk about that in the payroll part. So stay tuned for that. 

Okay, so bookkeeping is tracking your financial transactions, and there are three ways that I have done this in my businesses. Those ways are QuickBooks. I track them into QuickBooks and I send it to my accountant. Way number two is just outsourcing the entire process to my accountant. And then way number three is tracking it in Excel and sending it to my accountant. Okay, so I'm going to break down all three right now. 

First, let's talk about QuickBooks. So this is what we did when we started. I remember going to Staples or somewhere and getting QuickBooks software. We use the online version. And setting everything up that way. I had no idea how to use QuickBooks. I remember Googling stuff and trying to call a QuickBooks professional to get help. That's what we did. Let me kind of explain what QuickBooks is. So it's a software you download or you can get the online version. And there are pros and cons to both so I'm not going to go into whether you get the online version of QuickBooks or if you actually download the software onto your computer. But I would simply ask your accountant. I'd say hey, which is the best type to use. And also, your accountant can actually help you. He can tell you exactly what you need to know, to do, in QuickBooks to make it really simple. You don't have to hire a QuickBooks representative to take you through all that. It's pretty simple. That is how that works. 

And then when it comes to actually using the software, you can sync QuickBooks to your business bank account, or really you’re syncing your business bank account to QuickBooks. You’re going to go into the software. You're going to say, these are my accounts. And what you're going to do is you're going to set up a schedule for when you're going to update your financials, okay and this is important. You're going to say every week on Friday, I'm going to go through and do this process. And I used to do this weekly on Fridays until I didn’t. And I'm going to talk more on that later. Okay? But when you do this, what you're going to do is go in and download all the transactions from your business bank account into QuickBooks. And it's going to kind of populate. You know, the first time you do it, it might be a little bit rougher. But over time QuickBooks is going to know which transactions are in which categories. But each Friday, you're going to go through each transaction and make sure it’s properly categorized. So, something came in from a Home Depot. It could have been equipment or it could have been supplies. You want to make sure that it's correct. If you had a window repair that's a non-recurring item, you want to go through and categorize each transaction or make sure it's coming in right. And again you can talk with your accountant about it if you're not sure how something should be categorized. Again, that's why it's so important to have a great accountant because they're like your BFF in your business. 

It's important that they're properly categorized so that they show up correctly on your p&l. A p&l is a profit and loss statement, also called an income statement, and that's one of your financial statements. Also, it's important that you add notes to any potentially confusing transactions. Because remember when it comes time to do your taxes, you won't remember like that random transaction that happened a year ago, if you're doing this a year later. So you want to make sure that if there's something random or something that you might forget, just add a little note and there's ways to do that in QuickBooks as well. So that's it for QuickBooks. At the end of the year. You should have everything pretty much covered. And you'll basically just send your QuickBooks file, download it and send it to your accountant. And when you do this, you're going to want to make sure that you don't go back and make changes after you've already sent it to your accountant because that could affect your financial statements and that's what's being filed with your taxes. So make sure that when you send it over to your accountant, it's pretty much done. If not, they'll have to go in and make adjusting journal entries and it can get really confusing and sloppy. So just do your best to think about version control between you and your accountant. So that is the way that it works if you are going to do your financials yourself, track your expenses, and your transactions in QuickBooks and then send it to your accountant at the end of the year to do your taxes. Okay? 

Now the next process is if you just outsource the whole shebang to your accountant. So, remember when I said that I updated our finances every Friday night until I didn't. Well yeah, that's because things got freaking crazy. Our gym took off. It was growing so fast, we launched a second location. And then like a few months after that, I got pregnant. And I remember thinking, I'll do it one day. I'm gonna catch up. Y’all, I looked up and it had been like nine months since I last updated our financials, which is not okay on so many levels. Because, one, right now, and what I was even doing then was, I check my bank account every single day to make sure that there's no weird transaction or double charge. But, again, when you're not in a system checking it weekly, not waiting nine months, then you could miss things like double charges or wrong charges or whatever it might be. And then the second reason why you don't want to wait super long is that there were just so many transactions that I didn't even remember what it was. It was just a hot mess, y'all. So, get this, I went to Alby. And I was like, “Hi. Nice to meet you. You're awesome. I want to work with you. And also, can I just send you my bank statements and you go back and do it all? Because I can't, because I'm pregnant and I'm tired.” And it was the biggest relief when he took us on as a client and fixed all the things. Not just with our bookkeeping. But with our taxes as well. And there's more on that in Episode Two. I kind of spill all the tea. Y'all know I keep it real, right? And honestly, y'all, it's just because I feel like it's not helpful for me to pretend like I had it all together back then when I was launching my business because I didn't. And if you can learn even just one thing from this episode and my vulnerability or my mistakes, it would be totally worth it. 

So anyway, back to the notes. Okay, So, that is when I stopped doing the bookkeeping myself for The League. I was basically like, this is amazing. Yes, please do everything. And Alby actually got a login to my bank, I forget what it’s called with my bank. He has his own login. I pay $5 a month for this, and it's totally worth it. He and his team can basically go in and access my financials at any time and pull what they need. So with this route, each month, Alby and his team send me my financial statements, both my balance sheet and my income statement, or p&l. And they send it for the previous month. And I kind of go through and I read it and I make sure everything looks right. And then I can just kind of keep it moving. So I'm knowing, day-to-day because again I check my bank statement or my bank account with my app on my phone every single day. But I'm also having someone else kind of pull it all together for me. I can just check it monthly instead of having to go in every week when I don't really have time to do that at this stage of my business. Now I did it myself, I would say for I guess two years. No, probably much longer than that. Probably like, four years, I guess it was longer than that. I did it for a while. So it's okay if you do it yourself for a while. It's really okay however you want to do it. But I just know that as you grow your business, it could get really hard to manage things like that and that's when you want to make sure you have a good accountant to kind of step in and help you with those things. 

So like I said, each month the team sends me my financial statements. I look through them. If I have anything I want to discuss with them or questions, I'll just shoot them an email and we'll get on the phone. What I love about Alby is that he's super responsive. I really appreciate that. I don't ever feel uncomfortable reaching out to them via email like, hey I have a question about this. Even if it's not related to my financials. If it's like, we want to make this move with our finances, does that make sense? He's just awesome with that. So you want an account like that. 

So then at the end of the year, since we’ve checked off the financials each month already, and the p&l and balance sheet are basically done. He'll kind of just compile everything and send me the final income statement and balance sheet to review. Y’all, it's amazing. It’s how I would do it for any big business that I own. You want to have an accountant that is doing all of that for you. 

But what if you just launched your business and you don't really have that many transactions. That is the next option we're going to talk about. So process number three is handy dandy Excel. Does anyone else, kind of like geek out over Excel? No? Okay, maybe it’s just me. Not going to get crazy with all the Excel things over here. But, I love Excel. And I'll first say that you want to check with your accountant, first to see if this is okay. Because some accountants might not really like the extra step of having to kind of convert everything from Excel into their QuickBooks, or into whatever software they use. They might prefer, just a quick and easy QuickBooks file. So you want to make sure you check with your accountant first. But this is how I'm handling all of my newer businesses that I just launched. There aren't as many daily transactions like there are with The League, or like there were with The League. Lord, we are still shut down in this quarantine with social distancing but it's okay because we're gonna make it. But, before there were daily transactions with The League. And that's not the case with some of the newer businesses that have launched. So there's no need to kind of go all out with having Alby do our bookkeeping because there's just not that many transactions to look at. But after a year or so, it may make more sense for me to move to QuickBooks, or to just let him handle it. That'll be just a decision I decide based on really where I want to focus on my business. You have to remember I talked about this a million times, You want to focus on your core competencies, right? It's going to get to a point in my business where it doesn't make sense for me to be doing that every week or every month. That's when you want to outsource that. You, as a business owner, can think strategically about next steps and not have to stop every, however often. You could use that hour that you would be doing your financial update to be strategizing or thinking of new marketing strategies. Y’all feel me. So you have to just really figure out what vibes best with your business and where you are in the phases of your business. 

If you use this Excel process, what it's gonna look like is, you're going to download the transactions from your bank into Excel. So you're gonna just go into your online banking and in the transaction section, there's going to be the download button. It's probably going to be a .csv file from your bank. CSV, that's what it's going to say. And so you can download that and then kind of just copy and paste it in Excel, depending on your computer and all that. But that's just kind of how I do it. But you want to decide on how you want to format your working file, this Excel file. You don't have to get crazy. I get crazy with formatting in Excel because again, I'm an Excel nerd. But ultimately you want to have, you know, the date, the transaction, the amount, whatever other information you feel comfortable with. But you want to add a category column, and also a notes column. And in the category column, that's where you're going to say this transaction from HEB was for our team party. This transaction for Home Depot was equipment and so on and so forth. Like, categorize it so that when we ultimately send it to your accountant, they know where to put it in the income statement. The notes section is there because, again, there could be something really really strange. You've probably seen it on a bank statement before where it’s like fly.com, and what is that, and you don't remember and you want to make sure you just kind of note it. You don't want to just put the category on there and not really be able to say what it is. So, you want to have a notes column as well. So you want to track this regularly just like you would in QuickBooks, and again, send it to your accountant at the end of the year. 

So those are the three ways that I've done it in my business. But I do want to say there are definitely other ways to do this. And I'm sure there are great apps and other great software. But again, I'm sharing what I've done in my business, in hopes that it can, you know, enlighten you or help you in some way. 

That was a lot to cover, and we still haven't even gotten into payroll and taxes. But y'all, that is why there's Part Two coming next week. Now I really want to say this and I want to stress it. I want you to know that there is no judgment. Y’all, I've seen it all. I've had clients who don't have a business bank account, clients who haven't filed their taxes, and they've been in business for three years because she just didn't even realize she was supposed to be filing taxes. And then I've also personally experienced starting off launching my business and not understanding different tax classifications and getting penalties from the IRS. Like I said, I’ve seen it all. 

It's important that you don't beat yourself up over what you haven't done, and that you do take action, right now. I want you to go right now and schedule time on your calendar to set up your business bank account, to get a business credit card, if you can pay it off every month, to hire your attorney, and to ask your attorney these important questions. And then on top of that, after you schedule it because you're gonna do it right now, alright? I want you to tell somebody - your husband, your colleague, your friend, your mom, or me. If you need someone to hold you accountable, tell me. Send me a DM on Instagram, and I will follow up with you because I want you to win. And that starts with you setting yourself up to win, and you're going to do that by making sure that you have your money tight. All right? 

Remember if you need an accountant, Alby Abraham has worked with me for years and is now working with many of my clients and friends. And y’all, I don't recommend specific people often. I totally trust this guy. So go to birdwilliams.com/alby. You can click the link in the show notes for this or you can go to the website and check my website and check the podcast and get the link there as well. Go to birdwilliams.com.alby to get his contact information and make sure to tell him, “Hey, I heard about you on the Bird Means Business podcast, and I want to book my free initial consultation.” Y’all, this guy is so good. He has so much knowledge, and he's also really kind and will answer any questions you have. 

All right. So that is all for this week. But next week in Episode 25. We're going to pick up right where we left off, and it's gonna be really good. We're gonna talk about payroll and taxes. I know that's not exciting for y'all, but I'm gonna make it super fun and digestible. I told you. So thank you so much for following on Spotify, and for subscribing on Apple Podcasts, so that you don't miss any episodes. And please please please tell your entrepreneur friends about Bird Means Business. All right. All righty talk to you all next week.