When I first started my business from home a while back I thought I knew how to keep close track of my finances and expenditures. So you can imagine how surprised and dismayed I was to find out that instead of earning money, or even breaking even – I was actually losing money steadily over the previous year. It took a while, but I finally discovered that I hadn’t been keeping track of certain basic living expenses – indeed, some of them weren’t even included in my regular operating costs. So that some expenses that I had taken for granted were costing me more than I had anticipated.
Correcting this error required more than erasures on the balance sheet. It required some changes in my way of thinking. For example, the regular costs of maintaining my office and business had to be separated from the costs of living at home. Sometimes these would overlap. For example, the expenses that accrued when I had customers over to discuss business matters would necessarily include expenses for entertainment, meeting supplies, and condiments. Often these would automatically go into our home budget for food. But how often did we serve shrimp and crab salad sandwiches to our family at home? By the same token, our business office rarely required the supplies we bought from Home Depot for our pool maintenance.
This was how I discovered that the assistance of a bookkeeper and finance manager would be necessary if I really wanted to see that our firm was operating and managing money efficiently. I also wanted to be certain that we took advantage of savings available using Groupon to get discounts of up to 65% off the cost of new flooring – something both our office and our home needed desperately. So before even venturing into these new projects I decided to consult with a bookkeeper and finance advisor to assure that we made a proper record of expenditures and income. This way we could invest our income in our home improvements while knowing that our business profits wouldn’t be threatened. My new bookkeeper not only developed a way for me to keep accurate records of profits and expenditures; he showed me how I was losing money by failing to take advantage of many other Groupon deals available from Home Depot. These opportunities increased my business performance by reducing expenses considerably.