As our raving fans know, our passion is to help the entrepreneur, solopreneur, mompreneur, and small business owner succeed financially.  We find that most of our clients and fans feel this impending doom first quarter of any new year.  First quarter is when business owners think about possible financial sins they committed in the previous  year (e.g. not keeping up w/their books, or the condemning box of disorganized receipts hiding under the desk ), they  dread the weeks leading up to April 15th,  and all the work it takes to get ready for that appointment with the tax person.  A bunch of time and energy is wasted Jan-April of every year cleaning up the financial sins of the year before and many of our clients miss the opportunity to set up financial systems and strategies to avoid what they’re cleaning up.  It’s a pitiful cycle. 

Nobody is perfect, and everybody is busy.  So cut yourself some slack, and read up on What Do I Do Now (WDIDN) if you’ve had some financial indiscretions in your business during 08:

4 Financial Sins and WDIDN (What Do I Do Now?)

Sin #1:  Good intentions, lack of follow thru.
Did not keep up with the “books and records” part of my business.  Subscribed to Prosperity, but didn’t actually use it (I wanted to though!).

WDIDN? If you were more naughty than nice in actually using Prosperity last year, we do NOT recommend you go back and enter a full year of income and expenses line by line.  No, no, no!  Not unless you have nothing but time on your hands. Instead, make a commitment to fulfilling the “good books and records” requirement that IRS has for your business for 09…and move on.  In order to do your taxes, your accountant needs a comprehensive total of your business income and expenses.   If you would like to learn a work around in Prosperity so you can have “some” records for income in 08, sign up for our It’s Not Too Late for 2008 webinar or contact our education team support@prosperityapp.com  

Sin # 2:  Shoeboxes, ashtrays, and handbags, oh my!
I have business receipts stashed all over the place—junk drawers, shoeboxes, handbags, etc.

WDIDN? Envelopes.  Get 12 paper envelopes and label them January – December 08.  Organize the receipts by the month and stuff them into the right envelope. Make sure every receipt is clearly readable, and that it’s is noted with appropriate documentation about what expense category it is related to. Examples:  Supplies, Gas, Biz Meals, etc. Take each envelope and staple it to the corresponding bank statement for the year. April envelope stapled to April Bank Statement.  

Tip for 09: Hang an envelope somewhere in your house or office, and drop all your receipts into that one envelope all month long. After you’ve reconciled your account(s) in Prosperity, staple it together w/ your envelope for the month.  Take the Categories and Receipts webinar.

Sin #3: My business has been sleeping with my family
I have been co-mingling business and personal funds all year long; and I’ve used my business bank account to pay for personal things (like clothing, groceries, presents, etc.). Whoops!

WDIDN? Stop doing it right now! Your business is your business; your personal life is your personal life financially. They must be separated. Separate bank accounts, separate usage-rules, separate everything.   Think it’s negotiable? Remember this:  If your business is audited at some point, co-mingling will open you up to a personal audit too. Always assume the position as a business owner, “It’s not a matter of IF you’re audited, it’s WHEN.”  

If you have been robbing-Peter-to-pay-Paul or just didn’t know any better, here’s our advice. Make sure you have clearly noted books and records and don’t try to write off something that isn’t a legit biz expense (e.g. life insurance premiums) to compensate for it.  Take the Setting Yourself up for Success webinar or request some time w/one of our financial coaches to help you get set straight.

Sin#4: Filed my bank statement and did nothing with it.
I did not reconcile my bank statement against my own books and records—that’s kind of a grey area to me.

WDIDN? The #1 way that identity theft is caught is by reconciling your own books and records against your bank statement. Have you ever noticed funny little charges that you couldn’t account for? (we found one from a domain company this month.) You only find those things when you reconcile.  We find that most people don’t reconcile because they were never taught how and they think it involves something about writing on the back of their bank statement in all those boxes.  Reconciling your statement to your records in Prosperity is a cinch! It helps you know what transactions have cleared, and will help you recognize financial trends of your business. To learn how to reconcile your bank statements, take the Reconcile and Anti-Identity Theft Webinar

Financial sins are easily covered up or forgiven.  We are standing with you in 09 to help you be an angel w/your finances and to be wildly profitable.

The Prosperity Team

Blood might be thicker than water, but it doesn’t keep a legacy afloat.

Let me be morbid for a second.  Imagine that you worked the last 20 years to achieve your dream: You have built up a million dollar company from the ground, changed the face of your local community, and made a difference in 1000s of people’s lives through the jobs you provide and the services and products you offer.  The same day you realize the vastness of all you achieved, you die.

Everything that you worked so hard for is now in someone else’s hands. The result of your sweaty brow could have the longevity of many lifetimes or be destroyed in only a fraction of the time it took you to build.  Would you avoid such a wager if you could?

What if I told you that the person who took over your business was not only skilled and passionate, but also educated and disciplined about stewardship.  Compared to the alternative, you probably love the idea of someone “qualified” taking over, instead of just any old “Joe” off the street. You have good reason to feel this way.  Studies have shown that the most important value in the success of family businesses from generation to generation is stewardship.

These family stewards see their role in long term goals instead of short lived visions.  They are motivated by a desire to build on the foundation that they received in effort to pass on more abundance than the prior generation.  They see their wealth and value beyond their own pocketbooks, and see themselves as the director of every resource.

Rather than simply working monotonously laying bricks, they see a wall coming together and can imagine the grandeur of the building that is underway.

Stewardship is the make or break of a lasting legacy – whether it is family or not.

IT matters.

People hate the thought of a budget. Priorities, however, don’t scare them at all.  Ironically, priorities are no more popularly adhered to then a budget. While a budget takes time to establish and discipline to stick to, priorities are dangerous because we erroneously think that we know what they are.

James W. Frick has a great quote, “Don’t tell me where your priorities are.  Show me where you spend your money and I’ll tell you where they are.”  Think about it.  Someone looks through your checkbook and has the audacity to tell you what ranks above all else in your life.  Would you like what they find?

You cannot direct your resources to unknown places.  It is your responsibility as a business owner to engage in these important decisions.  What you do with your time, your money, and your energy must reflect your priorities.  IT is fundamental to your success, and more importantly, your satisfaction.

If you don’t know to what end you are a steward, you cannot be a good one.

Who said ignorance was bliss?

IT matters.

Stewardship is the corporate action that will shape the future of businesses globally.  It is a buzz word that encompasses a myriad of ideals and expectations.  It is hard to measure and harder still to execute.

The importance of stewardship is linked to nearly every aspect of business imaginable.  It has implications ethically, environmentally, financially, relationally, personally, and morally.  Because implications can be positive or negative, your stewardship can be deemed “good” or “bad”.  A good steward acts above reproach, exercising calculated and mature behavior.  A bad steward doesn’t.  Simple as that.

Now let me tie it together with an illustration…

Every business works hard and spends money hoping to make money. Most have learned that there is no get rich quick plan – I won’t deny the accumulating power of every dollar saved, but there is no magic pixie dust.  Small and big companies alike have discovered tempting shortcuts in the business world.  Unfortunately, the glowing opportunity which entices them is not a friendly flame.  Yielding to such temptation brings into question the quality of your stewardship and even your character.  These decisions impact the mindset of current and future clients, put a damper on trust, and devastate the branding reputation that you have worked so hard to engrave in the minds of your target market.  This bad taste lingers in customer’s mouth even after they devour the most “curiously strong mints” that a PR expert can provide.

Let’s take a closer look at national events of late and how stewardship comes into the picture.  Surface level you see a failing mortgage broker.  What I see are the greed-glazed eyes of a bank that over-gambled with someone else’s money.  What you see are people living the “American Dream.”  What I see is financial disillusionment seated on the posts of that white picket fence and seeds of impatience sown in the front planters.  If you don’t like the way I see it, we could put it in the words penned by Robert Buckland and Citigroup’s global strategy team. “Easy money encouraged many to buy a bigger house, a bigger car or a bigger speculative position.  But now, any behavior that relied upon continued access to easy money is being dramatically reassessed.  Leveraged banks must lend less, leveraged consumers must consume less, leveraged companies must acquire or invest less, and leveraged speculators must speculate less.”

As it turns out, a pickle is not just something you eat with your sandwich.  It is a sticky situation that we a nation, as business owners, and as consumers have gotten ourselves in.  Tomorrow’s stewardship is a not going to fix today’s problems.  However, developing and demanding an environment that prizes stewardship is going to progress us pro-actively toward a new end.  Personal accountability and professional responsibility are where IT needs to start.

IT matters.