Issue link: https://www.ascpskindeepdigital.com/i/581665
Create your free business website! www.ascpskincare.com 41 or product, and will help determine what type of marketing you can afford. Microsoft Excel has easy cash flow statement templates you can download and start using today. Also, be sure to get additional education on cash flow at sites like www.entrepreneur.com. Profit and Loss Easy to do? Yes; most accounting software will generate this report. Should I get help? Yes; this document is only as good as the data recorded. Banks rely on this as an overall snapshot of the business. Profit and loss is also known as an income statement. The purpose of this report is to identify the profitability of the business. It is different from cash flow and is generally not used as a day-to-day sales management tool. A profit and loss statement will show revenues, expenses, gains, and losses, but not the actual cash you receive or pay out. Think of this as your business's report card. It will show how successfully your business is operating, and is necessary when looking for a business loan or investors. Find more information here: www.accountingcoach.com/income- statement/explanation. Your Taxes Easy to do? No; but you can do quarterly filings on your own if needed. Should I get help? Yes; one mistake can shut down your business. Ahh, taxes. Once a year is bad enough, but if you are self-employed, making quarterly tax payments to the IRS is a required, but often overlooked, task. If you are self-employed, your taxes are based on the income received; then a hefty 15.3-percent tax is added on top of that. This rule applies to independent contractors as well. If you are unsure of your employment status because you are taking a commission cut, it boils down to whether the person giving you a check takes taxes out or not. Most people are fine setting aside 20 percent per quarter for taxes, but be sure to get help with this. A good idea is to set up a separate account in which to transfer your tax payments and make it difficult to access that money. Track Your Expenses Easy to do? Yes; but requires a system— and discipline. Should I get help? It depends; this is easy to do yourself, but it is time-consuming. If you feel you would be more productive paying a bookkeeper to do these, go ahead. However, you still need an organizing system. Expenses are golden. They lower your tax burden at the end of the year, and tracking every penny spent on expenses in your cash flow statement is necessary to see if, and where, you are overspending. Keep your expenses separate from your personal bank account and credit cards to provide a better paper trail. Try not to spend cash on business expenses; if you do, make sure you record it immediately and save receipts. There are some great apps out there that can help you, such as Expensify. Looking for tax help? ASCP members can receive discounts on in-office and online service, as well as tax-preparation software with H&R Block. Log into your account at www.ascpskincare.com to learn more. Check out this great resource for a review of three useful apps: http://bit.ly/1fTsg34. Remember, if you are an independent contractor, this applies to you as well. You should be accounting for all of your expenses in the course of doing business; it will help you lower that tax bill. Summary As intimidating as some of these financial tasks seem, it is better in the long run to stay on top of them before they become overwhelming. Facing your fear is essential, and getting help can provide an extra layer of security when you are dealing with the management of your money. Susanne Schmaling, director of education for Associated Skin Care Professionals, is a licensed esthetician, experienced educator, former spa owner, founder of the Pacific Institute of Esthetics, author of A Comprehensive Guide to Equipment (Milady, 2009) and Aging Skin (Milady, 2011), and contributor to Standard Makeup (Milady, 2013). Contact her at sschmaling@ascpskincare.com.