Billing Statement of Account Sample for Real Estate Made Easy

Billing statement of account sample for Real Estate

good morning everyone and welcome to the vpc's hosting of beginner financials for entrepreneurs in the US VI this session will give an introduction to managing small business financials today's lead presenter is vbdc state director John morasco allow me to formally introduce him before returning to the Virgin Allens as a vbdc state director John had many years working as a certified business adviser in Iowa Washington State and the Virgin Islands in addition to those years with the sbdc John has been a successful business owner college professor and nursing home administrator he has also worked in Corporate America for more than 35 years John spent most of his career working his primary job and teaching at many colleges Nationwide John has an extensive experience managing restaurants hotels assisted living and nursing facilities he also assisted with his family restaurant and owned a college Consulting business and a j janitorial business which he later sold John holds a Bachelor of Science degree in hotel management and tourism from Florida International University and a master of public administration degree in long-term care from the University of New Haven here's a fairly reminder to put your questions in the chat they will be addressed during the question and answer segment so at any point during this presentation just go ahead to the chat put your question in there and it will be addressed later on a copy of this presentation will be available in the post survey email you will receive after this live session so we encourage you after this session to fill out that survey and let let us know how we are doing so without further Ado State direct director Jasco the floor is yours thank you so much it's a pleasure to be here today and talking about financial work it's one of my favorite areas in business it didn't start out that way but as as far as as a business owner learning how to handle the financials I learned a lot of lessons that go with it so again I'm John Morosco state director for the Small Business Development Centers today's what we're looking at the objective is learning Essentials uh to the financial concepts for business success understanding key financial statements there three of them we're going to talk about and building Financial uh strategies for growth during this session I really encourage everybody be gentle on yourselves if you don't know something or if you don't understand it you know we're here to help you we have advisors here that will assist you and you can there's no charge for what we do so during this time we have diff many different levels I'm sure within this group some people know a little bit more some may just be beginning the most important part is to hear what the financial and the the basis is that you need to really run your business and understand the financial so many people I I don't know if you've heard I've heard for years somebody would come in and say I don't understand it I it said I made money but I can't pay my bills well there's a reason and it will become clear as we go go through here there are different reports that somebody at that a business owner should be looking at it's like a three-legged stool and if you don't look at all three of these Financial reports you're not going to get a true picture of what your business is doing so as we're going through you know I'm going to be talking about why financial literacy is important for the business and the business owner you really need to understand and the financials I know with my first business I was going I was always so busy I couldn't do it and I almost got myself in deep Pro deep trouble with that so I encourage as busy as we are as small business owners there are ways that you can start tracking and following your financials it's essential for your growth and to determine which how this how you're going to grow your business because I think that's why we're all here we want to make money any small business owner you you love the independence personally I came back to doing what I'm doing but I missed my small business where I could come and go as I wanted to I you again I love the spdc I love what I'm doing but I miss that freedom that I had when I was my own business owner so the goal today is that I really like you to leave with a clear understanding of the basic Financial Concepts again you're not going to be able to in some cases you may not be able to fully understand or fully take in like how to read the financial statements so the strategies to manage the cash flow and the budget effectively and again I encourage you take time to review the videos I'm doing next week I'm doing an advanced program which will be much more in depth but if you're not ready for it it's okay and really what I encouraging everybody to do is do make an appointment with an uhdc advisor we do not charge for what we do and our our job is to help coach you through how to get this how to get your financials done how to put them in place and there are all kinds of tricks that we will talk about so again I just keep emphasizing remember it's a journey and we'll take a bit of time to master all of these um everything that we're doing and talking about today day I didn't learn it in one day it took me probably a year and a half in my business to start to really understand what was going on in the business but I was patient I had really good coaches to help me with that so the discussion is we uh as to why financial literacy is essential in business it is again you want to be able to stay in business you want to be able to um make money on it so many people oh they say oh I made I made $1,000 a month if you're in business is that enough for you to live on is that what you want to do how do you want to grow and see your business be a success everybody has different concepts uh one of the things I talk about with the clients that I have is when we working on the financials the first question I start with with the client is how much do you need to make a year and I can't tell how many times I got the answer from the client saying oh I'd be happy with $1,000 a month and I would just nicely Challenge and say so you're okay living on $122,000 a year can you do that what's the honest answer so when we start working on the financials when you start looking at cash flow one of the first steps I I give to the client is I want you to we're going to start with how much do you want to make a year year and I I really ask all of you to think of that how much do I want to make a year from my business and are you doing it have you mastered it and if not are there steps that you can take to build that business up to that level to give you the freedom that I love to see with small business owners so um with that I do have a video as long as it um starts properly and this is I will say this person uh that's doing this I I like he's talking about bookkeeping Basics and the difference between bookkeeping and accounting at the end he does promote his business but I still like the content you don't have please don't feel that I'm pushing that this particular person's uh business but I do like what he had to say so I'm going to run that now bookkeeping is an essential part of small business operations it plays a significant role in keeping your small business finances organized and is especially helpful come tax time it's one of the first things you should think about as you get your business up and running bookkeeping is the process by which a business records all of their financial transactions sounds simple but it gets complicated fast depending on the structure of your business and the system you you have in place learning the basics of bookkeeping can help any small business save time and money the longer you wait organize your finances hard it bookkeeping is an essential part okay sorry we're starting that again plays a significant role in keeping your small business finances organized and is especially helpful come tax time it's one of the first things you should think about as you get your business up and running bookkeeping sorry about the tech issue everyone is the process by which a business records all of their financial transactions sounds simple but it gets complicated fast depending on the structure of your business and the system you have in place learning the basics of bookkeeping can help any small business save time and money the longer you wait to organize your finances the harder it is to untangle here are some of the basics of bookkeeping for beginners bookkeeping is vital for small businesses because it keeps accounts invoices and expenses organized poor bookkeeping can lead to missed payments late invoices and a headache when it's time to file your your taxes you can use bookkeeping to help access important documents and records for business operations facilitate tax information by having business finances readily available identify transaction mistakes with time for reconciliation and transaction management to keep your business and personal finances separate from each other and to monitor your small business's Financial Health for any changes or improvements there are four bookkeeping Basics that you can use to grow your small business you can use two record management systems for your bookkeeping needs bookkeeping software and spreadsheets whatever you decide to use you need to ensure that you're consistently updating your records bookkeeping software allows small businesses to have accurate records because of the improved accuracy you'll save time with how quickly you can complete your bookkeeping you can configure bookkeeping software to create reports for certain Financial aspects of your small business and similarly bookkeeping software allows you to have all your records in one place spreadsheets offer small businesses a convenient way to save store and view large quantities of information you can use spreadsheets to view data such as customer data financial data and product data for small businesses spreadsheets might work well for tracking their budgeting and spending habits you can also use spreadsheets to create Financial charts and financial reports too and finally you can use spreadsheets to help create invoices and receipts the second bookkeeping tip for beginners is knowing the differences between bookkeeping and accounting you may see the two terms used together often but there are notable differences bookkeeping involves answering day-to-day Financial questions balancing and maintaining a ledger entering debits and credits maintaining expenditures and income promoting financial statements like the balance sheet and recording daily transactions accounting has different responsibilities which involve adjusting entries in The Ledger analyzing business costs completing in-depth budgeting and forecasting conducting strategic planning preparing taxes and providing macro Financial advice there are two types of bookkeeping methods cash method and AC cruel method the cash method is convenient for many small businesses because of its Simplicity with the cash method you'll record expenses when you pay a bill and you'll record sales when you receive a payment this will tell you exactly how much cash you have on hand at any moment the acral method is based on the matching principle matching Revenue with expenses it differs from the cash method in how you track expenses and revenue with the acral method you'll record expenses even though payment has yet to occur and you'll record sales even though though you have yet to receive funds the acral method gives you a more holistic account of your financial standing by considering future expenses and revenue in accounts payable and receivable a business must use the acral method if it generates more than $25 million in annual gross receipts for three preceding years the final bookkeeping for beginners tip is to learn the basic bookkeeping account types these accounts serve various purposes that will help you form your balance sheet assets described what a business owns current assets include accounts receivable cash bank accounts and cash equivalents such as marketable Securities money market funds and treasuries other assets for a small business may include Financial assets fixed assets and intangible assets liabilities are what a business owes like outstanding invoices or business loans revenue is the income a business makes from its operations there are two types of Revenue operating Revenue non-operating Revenue operating revenue is revenue from sales or services and non-operating revenue is revenue from Investments or passive income and expenses any outflows necessary to procure sell or deliver your products bookkeeping is a vital part of any small business it's also one of the most impactful things that can Aid in your small business development however busy business owners don't always have the time or knowhow needed to effectively manage the books that's where one a hindered accountant comes in our team of expert bookkeepers can support you in your small business by taking care of your bookkeeping as always thanks for watching if you found this to be educational or informative helpful or entertaining please like and all right um so welcome back everybody this was just a I like the discussion what is the difference between and by the way thank you for putting up with the tech issues um sometimes it just doesn't go as expected and also we are working out of one space today usually we have our own offices so if you hear additional noises and things it's um just bear with us it's it's going to work out just fine again difference to me what's important is so many times I hear the profession somebody that I'm working with and it was even for me I don't have time to do this and it's really working the the way on how to get these financials done a lot of business owners will do them themselves I'm going to be going over some software that's out there I'm going to show you a cash flow sheet and also templates for spreadsheets there are different methods that everybody can use and for me what's important is that for my business my my particular story was I was busy I didn't have time to do my books what I did was looked at the numbers looked at what my forecast was and I hired a bookkeeper and the bookkeeper kept my books the key is if you hire a bookkeeper make sure you understand what they're telling you and that you're still watching your business uh one one area that I really encourage when we working with clients is bring in a bookkeeper have them do the monthly report then I H I have an accountant that I have do the quarterly reports and all the taxes and everything that goes with it and we'll have a little bit more discussion with that what I've added in here is we have why is that not [Music] sorry and there we go so what we have here is just I'm showing some different software I am not promoting any one of these you have QuickBooks you have wave you have quickin square square to me is one of the best operational that's that really is a point of sales system but what Square can do is just amazing so what I have is um for those that haven't seen it QuickBooks is I teach a QuickBooks course and at one of the colleges and it takes it's a 10-week course and it's huge so there's a lot of training that goes in if you're going to use QuickBooks again great great program but if you're a real small operation take a look at quickin I use quickin with with my small business all the time it does all my reports it's $7 a month and it does everything I need for my small business you get to a certain point yes QuickBooks is going to be more important uh or wave or any of the others that are out there but here's some examples that um we've I've pulled and this is the best accounting software for the this is from Forbes this is their Vision I do not have any say and I do not have any recommendations I I stay neutral on this that is for the business owners any of you business owners to investigate what system you would like to have if you are going to use a a a bookkeeping system so these are just I'm just showing you the different uh formats out there that you can use accounting Edge net Suites as some of these I've used um and they tend to do pretty well over overall so if you want when you get this update what you can do is go take a look at some of these you or anybody that has their cell phones ready just take a picture of this real F if you would like to investigate if you want to go into one of these uh software programs and there are more so so I just wanted to give you a a sample real quick of what is out there okay then with cash flow cash flow is one of the most important sheets this is a internal document that we use and please for people new in finance are doing financials don't let this intimidate you in any way cash flow when we create a cash flow sheet what looking for our we're going to look at revenue and then we're going to be looking at expenses that you have cost of goods sold all the expenses that go with it and really when when you take this and you have this finished product you know what the bank the lenders usually look at see where it says ending cash flow balance you can have all these figures in here they want to see what you're anticipating having in the bank or if you are in in operation how much you have in the bank the cash flow is going to tell everybody what you are doing in this case we use this for forecasting to create business plans that for the client when the client comes in we work together we create this document and then they're able to put this into their business plan the lenders really tend to like this program a lot so I just wanted to show you again we have cash flow and the this one line is the most important because it will move along and show what's going on I have a different sample to show you in a couple of minutes um and then templates for those that do not want to use the electronic system there are if you this is Microsoft 365 they have all these templates out there that you can adapt for yourself for I I have a client that's a really really small business and the the owner does not like computers at all which is okay so what we've done is that we set up the reports to do see like the cash flow forecast okay and when we're looking at how to create a balance sheet these are all things that you need and tracking uh you're able to just about do your entire uh business by pulling some of the the proper sheets that you know startup cost in this one planned expenses so I'm just pointing out as you're starting up if you do not go into the electronic system if you don't have anything you know right now just I I really encourage if you have no system at all this is beginning Finance you know keep a keep a ledger keep a notebook that has what is your Revenue every day what are your expenses every day and from there if you work let's say with an spdc uh advisor we can help you interpret what's going on but you have to start that and again it's important you're in business um any business with within the territory and just about anywhere else you're responsible to pay taxes so when you go to pay your taxes you want to have a document you need to have documented and show what your revenue and expense and profit and loss really are when you're um and then if you want to I've had some clients that came in we had funding that came in from the federal government and they wanted to get a grant from that and the problem was that they had never kept their their records their financial records so when they wanted to apply for this grant they couldn't because there was no Financial history there was nothing that they could show to these lenders to the people running let uh doing the grants what their what their financial situation really was if you if you run a bank statement and you know for your uh from your bank that's not going to be enough you have to there's certain reports that you just have to have so I'm just giving you an idea there's something for everybody out there and that's the point of what I just did on this last section if you you know we have the basic software we I showed you some examples um and I don't promote anyone particular I know for me my choice is Quicken because it's simple it's down and easy to use but because that's my choice you have to make a a decision what is yours understanding your cash flow is important and then you have all these professional uh templates that you can use and adapt into your business so don't be afraid get in there try it you know if it if you download it I've downloaded some of their templates and I'm going no I don't like this one at all and I went and found one that I did like that's doing the same job so the other piece is here really know when to hire an accountant a bookkeeper or financial advisor or visit the sbdc advisor we don't charge anything I know I keep promoting that but it's it's one of the best um one of the best s resources here on the island and we most I would say all of our advisers and our staff over here just love working with business so as we're doing this um key issues when business owner has limited Financial history again you're starting out from my experience and I've touched on some of this business owners do not track income and expenses you know I can't tell you how many times I'm working with a client how do you track how do you keep track of what you take in what your income and expenses are for your business they say we don't do any they just they just look at what they put the money in the bank and then they take it from there so if not tracking and completing financials how do you know how you how much you owe for taxes you're a licensed business you've got to pay taxes um I just I just I'm not a fan of paying taxes however I do it every year and I do it properly um because that is that's part of being a business owner you have to be responsible so besides not having the proper tax documentation if a business owner wants to get funding through lenders or grants most likely the lack of accurate records will lead to you being denied funding and you don't want to be in that place there you know the there's funding that is out there uh right now I don't have enough information on it but I think there's a couple of Grant uh grants that are being um or loans that small businesses can get here on the island I will get more information and put that out for you but you know it's it's important that you have these documents again if you haven't done it in the past no big deal just start now okay if you need help setting it up ask for help to get it set up a couple of and I'm just going to go over a few key Concepts here that again part of what we're doing today is the is that you start to understand some of these terms I really I hope everybody is sticking in there and don't be afraid of it there won't be a quiz at the end of this you'll have the information but you should as a business owner you should really start to understand some of the key Concepts that we have that will help you for sustain your business and to grow your business and also you want to be profitable so one of the ter some of the terms that we use that people just are not they hear it but do you really know the difference so revenue and so you have revenue and profit revenue is how much you earn profit I call it profit margin is how much you have remaining after costs are deducted that's a real simple concept on that um Cash Flow versus profitability when we're looking at cash flow cash the when we look at the cash flow it's the cash that comes in cash that goes out what we call inflow and out flow of the business profitability represents the income after expenses of the business have been paid so that's the profit that we're looking at again some of the basic ter fixed costs um and we have fixed cost and variable cost a lot of time when we're trying to forecast and you need to know the difference anyway fixed costs if you pay rent every month okay and let's say you're paying $2,000 a month for your rental space okay that is is a fixed cost that doesn't change there may be an adjustment you know when the when the lease is up however that's a fixed cost it's the same every single month a variable cost I love using wa wa depending I I my variable cost at home I decided I was going to run my AC in my bedroom for uh and I ran it pretty cold boy variable cost my my electric bill went through the roof but I knew that was coming so you know the variable costs are going to change with the with the level of business that's going to change with the you certain charges that are coming through so that's um it's important that you start to understand those and the break even point you know what is the break even point of your company is really what are my minimum Sal what is the minimum sales volume to cover all my costs how much do I need to sell to cover all those costs that's what we call the break e point and the um let's see the main difference they the uh video kind of talked about a little bit cash and acral Method it's for keeping your records and doing the proper bookkeeping for yourself it's important to make a decision if you're doing a cash uh as as he said we're doing the uh a cash business uh cash form of accounting when someone someone pays for something when they buy something you record the sale and the revenue right at that point when you pay an expense you at that moment the day that you pay that uh that bill and you you're paying it and you're recording it right then and there the acral method is what most people end up using in business and that's simply when we're you know when the acral records the trans you're going to record the transactions when they're earned or not uh or not incurred regardless of when you pay your the bills made so what this is saying is simply I look at somebody makes a I I sell something to somebody they pay me with a credit card okay I had the sale I'm recording the sale however that credit card I'm not getting paid from the credit card company until you know it could be a couple of days a couple of weeks but when that sale comes when that Revenue comes back then I can complete the transaction don't let this get you you're not accountants uh I I don't think everybody's accountants and that's where I let the bookkeepers and everybody else worry about this but you need to know the difference if you're making decision do I want to do cash accounting or do I want to do acral accounting as I said most of the clients that I've worked with said oh I'm a cash and then when we start talking about oh they have credit cards and they they let people U they put things on accounts receivable accounts payable then you become a cruel accounting so we'll get I'm going to be going into that more in the next uh session okay so accounts payable versus accounts receivable and again this is important when you're making that um just to understand this that let's say payables it's accounts represents the money that your business owes to A supplier you go to the you go to Home Depot you pick something up and they charge the company that is not if you didn't pay cash and you're going to owe that bill that's where we call Accounts Payable in business accounts receivable is just pretty much the opposite represents money uh owed to your business by the customers again credit card is a great example they we have it we recorded the sale however we still do not have the cash yet that's why it's it's a delay system so in addition accounts receivable is considered a current asset and whereas the accounts payable is considered a current liability not to worry too much about that we again when you get into the more advanced to know this okay so I'm going into the main area here but I would like to just as a little teaser I don't know if everybody is familiar with um what we call call The Beneficial ownership information at when I when I finish today I'm going to be actually going through this and showing you and it's this is a mandatory um reporting that every single business include it that's in the territory that's an LLC an LLP or an escort you have to finish and you have to complete this reporting to the government by January uh by December 31st if you there's some exceptions here but J uh December 31st if you haven't done this work and you can easily get a, a day fine okay it's huge it's it's a uh Reporting System it's under the financial crimes enforcement networks and Congress and all the they put this law into effect they voted it in about a year and a half two years ago go and it's now it's it's here you what they're doing is trying to see if there's illegal money flowing around so they want every business owner you're going to report information about your business to the feds as the federal government and to and you're also going to report you as the owner so these are it's not optional you have to do it so I just wanted to point that out because so many people are still saying they haven't heard about it they didn't know uh know about that so um I'm just going to look real quick I see um let me just double check some oh somebody I love this thank you uh Latasha put in here that the W of accounting is awesome she really likes that thank you these comments are great um uh the the spreadsheet yes you're going to get the I will make sure that you have the links when you get sherica when they get the copy when they get the copy of this presentation are they going to be able to click on that link yes I got the thumbs up this is fun everybody we're we're normally not in the same office so I can just scream down there and she poor sharica rolls her eyes at me so yes you when you get this presentation everything that I put in there you should be able to get the one that you may not get is the cash flow sheet and that's because that's my sheet and if you need it let me know and I'll send it to you um okay someone said is can everybody see everything it's about sharing the screen okay and I'm just going through the these quick questions before okay [Music] so okay as as far what the with the report if that's what we're just talking about the uh the Boi and the uh which is part of the fin s Financial crimes enforcement the question was do I have to uh if you're a sole prop no you do not have to you do not have to be part of that again don't get escorp and soul proprietor confused so Soul PR does not have to do that uh beneficial ownership information again it's it's huge and I'm trying we're really trying to get the word out here in the Virgin Island so um that's why I stopped in the middle of this presentation if you're a business owner here's the skinny on you have any if you were in business prior to December 31st 20204 so or yeah December 31st 2023 if you had a business let's say for five six years you have until December 31st of 2024 to complete this these forms if you started your business in 2024 anytime in 2024 you are supposed to have completed this Boi within six months of your start date so if you started in January okay you're already late for completing these forms now I I can answer for the government but I haven't heard of any kind of fines as people are getting up and running with this but come after the first of the year I expect it so if you started your business in 2024 get in there and get this done and then we have um anybody that starts a business if you if you're working at starting a business and you start it after December if on January 1 202 you have 30 days to get this report done so there we go I did my uh PSA uh Public Service Announcement about the Boi everybody please just don't and I have videos you can go online and you can actually pick up we did a training session and I have all kinds of examples on how to finish and how to complete the forms go and pick it up there's another there's several trainings being done don't be afraid to give us a call all right as we're going through U we're 42 minutes into it and I think so far uh so good um three key financial statements this is what it's all about everybody and again this will be new to some people and it's not it's and some people have used these but these three reports that's the three-legged stool right here the income statement it's also by the way if you hear someone say the profit and loss the income statement and the profit and loss are the same report I would love to know who in the accounting World decided on two different names they are exactly the same so don't let that ever confuse you so that tracks revenues and expenses uh for a particular amount of time now I'm going to have a few examples here in a minute simple examples the balance sheet provides a snapshot of a business assets liabilities and the owner's equity that one gets a little bit more confusing I actually still for when I can create in my balance sheet I depend on the accounting software when I'm using quickin you know U uh I'm sorry QuickBooks when I use QuickBooks I can pull and I can actually run the numbers to show me what the balance sheet is when a financial person and let's say A lender is looking at your balance sheet it's telling them what your assets are liabilities and equity and it really tells the person it should tell you are you able to pay your bills and how you can pay them so it's a very important she and then again the state the cash flow statement how much money do it mov in and out of the business so these are all really important these are the three key reports and especially for the beginning Financial when we get done today do I expect anybody to be an expert absolutely not just keep working with them come see us we will help you to understand this and um it is you know I always say and it's it's a very true statement if I can do it I guarantee anybody here uh taking this class should be uh this uh seminar should be able to do it um again breakdown of this is what's coming right next I'm going to show again an income statement uh cash flow statement and a balance sheet and the purpose of each uh each one of these and it's important that you have at least an understanding do I expect you to be able to work them not at this point um some people can they've they've had that experience but if this is truly new to you just get the concept the understand understanding of what's going on so when I'm looking at the income statement it's the first part is I'm looking at Revenue cost of goods sold gross profit operating expense and net income by the way I'm going to be showing I have a simple simple income statement that's on our next slide now there key ratios the gross profit margin and net profit margin just at this moment I'm that is a whole uh seminar in itself a whole class in itself to work with the key ratios so I just wanted to mention them here but I'm looking at when it it tells me what's going on the ratios are important um for analyzing your business but right now it's like start with the start with the uh the basics as I call it this is a very simple income statement because it's showing net revenue well there other if you get a detailed income statement it's going to show where the different revenues came from but for this purpose today it's simply they had a 100 and by the way when I talk I round the numbers when we're talking this much money so in this the net revenue was $112 Million which is 100% of the revenue the direct costs what it cost me to operate and so you as a business how are you tracking all these direct costs you have it breaks down for you or you have to break it down into what the direct costs were to uh to generate that income in this case it was 80% so the gross profit okay the gross profit is uh 22 million do which is 20% so 100% of the revenue 80 80 so this is basically telling me that out of every dollar I took in 80 cents is going to pay direct cost expenses and 20% was 20 cents on every dollar was profit but that's before we have operating costs operating costs are are separate sales marketing and so you we we look at all of these in uh earnings before interest in taxes they were at 18% and the net profit of 14% okay so one of the things I really want to point out is depending on your industry and what business you are in for me with the restaurant industry the average restaurant throughout the country the this net profit is usually between five and six% so what it's saying is for every dollar I take in restaurants tend to make only five cents on the dollar so as I'm as I'm watching and doing my reports these percentages tell me a bigger story faster than I can look at all these numbers and then if I'm looking at last year's I'm trying to figure out what the difference is but if I'm looking at last year's percentage and this year's percentage let's say this year I come at direct cost at 84% I can start say figuring out why the costs went up 4% the again just real simple as we're starting out percentages tell you a story much faster okay so that is just a sample of the income statement again don't get confused when someone says profit and loss both the same report they will look identical except for the title okay so cash flow statement is the importance of the cash flow again you're operating what you're investing in the financial activities so I'm gonna see if I can pull this up here yes okay this is one I showed you earlier what is with this particular cash flow I'm going to be generating what the revenue is let's say if I'm I'm selling we I had a client in here earlier and there so they're it's $1,000 for whatever they're selling and let's say they did 24 units in the month let's see if I can pull this across I've had trouble pulling this across there we go so what it's saying is what I'm doing is saying I'm going to sell 24 of these units that let's call them bicycles at $1,000 in January and it gener we start generating revenue and we're forecasting we're coming up with what the revenue would look like so when we get down here you see the profit and loss is 24,000 but again this is not accurate but I wanted to show you the ending because the way the system works and how we report things the ending cash balance notice how it's increasing so ing to what I just put in at the end of year one we'd have $288,000 trust me this works because it's it's um the cash flow is one of the most important things especially for business operations you should know what your cash flow is and when you're so that's with the actual numbers what you're actually running and for your business and then you have the forecaster numbers where I want to take it in the future that's what this sheet really helps us do what's nice about this sheet is when we do this with this is one that we use with all of our clients what happens is that as we create create the cash flow it automatically is creating the balance sheet and the income statement this is we have this all programmed so it's nice when you're doing a business plan you can turn you have all three reports that the lenders want to see so again cash flow is to me one of the most important areas so this this sample I have is not one you saw what we just had this is from the um Harvard scho Business School but it breaks it down so statement of cash flow it's going to look at your your operating activities so that's the operating section it's then going to look at your Investments what are you investing have you what is you know did you put in money into Securities whatever so that's the investing section and then the financial section is do we pay out dividends now if you remember from the income statement okay they the it only shows this you see these two sections down here again my first one of my first lines to everybody was the business the business owner comes in I made money but how come I can't pay my bills usually it's because they just looked at the income statement they have not looked at what their cash flow is doing and at their balance sheet so these are important the three of them again this is new to a lot of people do I expect everybody to uh fully have the picture of it no but it's that you're aware of it all right then we have the balance sheet okay the balance sheet to me it's one of the it's it's it's a difficult when I'm it's it gets a little difficult when you're trying to put everything into it because you need uh current and current assets and current liabilities and the expenses that go with it so there's a formula I just want you to remember right now the formula is assets equals liability and owner's equity okay those two I'm going to show you an example here in a second but the best way I can describe this is again the balance sheet you see we have total assets equals 83402 in this case and the liability and owner's equity is 83402 magically is in Balance when it's out of balance I just want to I have tears in my eyes when we go to search out what you know how it happened what happened the best way I would love to describe it to give you a quick sample is if anybody owns a house or if you know anybody that owns a house let's say the house is the asset and if the house is worth $300,000 that's the total assets now coming down to the liability side if I have a loan a mortgage on the house and let's say the mortgage is $100,000 that means my owner's equity the owner has $200,000 in equity in the house so the $2,000 of their Equity plus the $100,000 in the mortgage that's still owed equals 300,000 the houses worth 300,000 owner equity and liability is 300 uh 300,000 they're in Balance that's a real simple way to look at it but hopefully that helps you to understand what this is all saying because it look at you know the assets it's looking at security inventory all of these different things and this is why when it comes to the balance sheet I if I'm not using um I use Qui books uh a lot of times with my company and quickin does the same thing but not quite as well uh but I have kind of graduated to QuickBooks myself because that's the course that I teach and what we're looking at with this is that you really want to be able to I I turn this over to my accountants and to my bookkeeper I just I it's one of those reports I can do it and I struggle through it I'll just be very honest there's you know certain things that we like to do certain things we don't the balance sheet is one that just absolutely drives me crazy and so what I've what I decided I did it several times on my own but what I finally decided is I'm letting the experts do so I pay a little bit extra to have them create this and then I know it's right they're backing up what's going on um and let's see so so that's that's the balance sheet those are the three main reports the balance sheet the income statement or profit and loss and the cash flow if you start looking at all three of these holistically all together you're going to get a good you're going to start getting a vision of what your company is doing because it's balancing this out this particular report I'm looking at my accounts payable accounts receivable and I'm looking at what the debt R you know what the debt is on that can I how is it looking will I be able to pay my bills and this gives you an overview the cash flow and the analysis is what is the cash in the bank and you saw from the previous slide it takes into account many different areas and then the income statement again I can't stress enough that bottom percentage if you have a business and it's let's say a retail business of some kind you know stop in see us and you can go online and look for your industry what is the what is the average um net income profit net income um percentage in this industry and you can compare yours to what the industry is doing now again you have to use you have to be smart we're in the Virgin Island certain expenses are higher and so the the difference there may be a little bit of a difference and if you didn't come out exactly to that percentage that they're saying is the industry standard then what you're going to do is make sure that you have the um the numbers you know is that percentage close is it how far away is it and then you're going to judge am I in am I in line with the rest of the industry again restaurants I'm real familiar with the restaurant you have the restaurant industry five cents of every dollar is is all they get in profits so if you're not controlling your costs how many times have we seen restaurants go out of business because they're they're just not watching over what's happening so that percentage is critical that you keep track of that okay um we're about an hour in I think and so I'm a little bit further ahead so I have plenty of time for questions and answers and I can start I can work with the finsen I will probably show that and I I encourage everybody that hasn't done it to to watch this so payroll and employer UH responsibilities so many times people will say oh yes I'm I I'm going to have employees or if I'm paying anybody in payroll remember you also have responsibilities that you're going to have to take care of I'm going to go here to my payroll section so if I'm looking at payroll and I'm just going to use one example let's say if I have one employee that's working 40 hours a week I'm paying them $25 an hour okay so the wage that I'm paying them is $4,300 okay but what you have to take into account for that's for the month is you are responsible so you're taking out employees um Social Security f everything else and you're putting it in a separate bank account remember to put it in a separate bank account because that's not your money you need to pay that you've taken it away from the employees uh you deducted it from their their pay but you also in many cases have responsibility to pay what we call the labor bir Social Security you had there's matching these rates are for Washington State so I haven't updated them for uh for here in the Virgin islandss but you if you have MediCare at that point so with the 43,000 you're you as a business owner may end up paying an additional 500 to cover that in that uh to cover this for um that you're responsible for that's the owner's responsibility so anytime that you're going to put in payroll and you're going to hire somebody make sure you do this analysis on you know I know what I'm paying them an hour and how many hours but on top of that they're hidden costs that a lot of people just don't realize are there okay so just don't get caught with that one uh as as we go along if you need more information I'm happy to share more with you um in creating a budget know the difference between a forecast and actual numbers today we were talking I I talked about this a couple of times the difference is like this one that I use for forecasting we do this um cash flow and the balance sheet and everything this is getting prepped to go and do a business plan so the finan the people the lender is going to want to see all three of these reports they're going to want to see the uh cash flow projections the balance sheet what your projecting and the income statement this is all on your projected numbers that you think you're going to do okay this is looking into the crystal ball into the future versus you have all three of those reports that we were just talking about the cash flow statement the balance sheet and the income statement and let's say today is the 14th up until the 14th okay you have this all the all the actual financials to the 14th are you going to most likely get from QuickBooks from quick in or your your information in your spreadsheets okay today the 24th at 11:59 noon is really what this is about okay those are the actual numbers if I'm working on this next piece let's say if I want to get a business loan kind of jumping over the wall here and looking into projections you can use the information your actual numbers as a guide but are you this is taking the forecast and it's it's really very interesting to get used to jumping back and forth between these two you know um actual uh actual reporting and then the forecast of reporting and and also be familiar with internal and external auditing uh internal auditing is IND uh uh independent and assessment of the company's Financial information and Records while internal auditing is reviewing the company's operations and process one of the things I insist on even with my small business is that I have let's say the bookkeeper the bookkeeper doing the books monthly quarterly and I had mentioned this earlier I have the um I have an accountant come in and file you know all that employee you know we were talking about we collected Social Security and all this I actually have an account and file that with whatever agency is I have to pay that to Social Security wherever that's going I have the accountant take care of that I'm still responsible that everything is accurate and it's being done on a timely basis that's why you as a business owner you say oh yeah I trust the accountant well you better be checking on the accountant and then because I I'm extra cautious when I have my business the one thing that I really do work on is I once at at the end of the fiscal year I'll bring in an independent auditor to check what the bookkeeper did and what the uh what the accounting person did to make sure that everything is in line because it's very easy I know many companies got ripped off because they weren't watching their financials and they didn't have honest people in the position um I just I'm just always going on the cautious side of things so with that said it's something that you can look at and also if you're hiring a uh if you want to hire a bookkeeper and your accountant and the account your accountant says oh I have we have a bookkeeping service this is a personal uh preference on you know or if this is a personal opinion I would stay away from that because if they're in the same company are they in cahoots I'd never want to be in that that uh circumstance so if I hire a bookkeeper I make sure that the accountant that I hire to do the quarterly work are not related at all because I want that independent auditing process to happen okay I'm G to take are there questions um let's see I really appreciate everybody being here I have a couple of questions we'll be able to view the video of the presentation in a later date yes you will be able to see that video was the live webinar uh converts I'm sorry something's in the way here uh well oh that was answered um so as we're going through I just would like to I hit I do when we're doing initial Finance finances as a review what I'm hoping that you really got today was simply that it is so important that you start if you don't have a system in place you put a system in place and it really is okay if it's just a a spiral bound notebook and you start listing your revenue and your expenses that is a good start I do encourage come work with as I said the spdc we have lots of great uh advisers here and we will actually assist you we won't do it for you we will train you and we will help you to understand what's going on that's the beauty of what we do I've had some people come in and say oh you're going to do a finan you're going to do a um a business plan for us no NOP no we're g to sit here we're going to help you we'll hold your hand and we'll get you through the whole process and it's it's a it's a full process for that so understanding where you are is step one in this the other piece is start to understand these three reports how do they work together first it's it's a little confusing why am I you know what am I looking for in the cash flow what is it really telling me what am I looking for in the business you know even the income statement what is your bottom percentage does it fit the industry Norm are you doing what your industry is supposed to do um you know as far as if if you find that your let's say your industry the average uh for the bottom line on your income statement is 25% and you're running it 12 what is the reason that there's that Gap can you are you controlling your expenses are you controlling your revenue or doing a little bit of both that you get to be the investigator on what's going on and of course the balance sheet I I was just honest a balance sheet is so important but I like to have either the QuickBooks or quick in or the accountant do those for me just because the first thing we do when I'm working with the client is when we're when we're looking at we did the whole cash flow section and then we go and we hit the balance sheet the first question is is the balance sheet and balance so that's one of the areas what I'd like to do I if there were there any other questions uh none so far and am I still sharing yeah um for some reason my whole screen just I something disappeared here okay so and sharica let me know if this comes up I'm bringing up the website and i' I talked about halfway through okay come on SO for those that haven't done the Boi filing I just want to show you what the federal what this H wouldn't you know can't reach this page I'm going to go back can try this again I'm going to go into can you all see the screen I hope let's see Google yeah and I'm just going in the I'm just coming in this way you [Music] um beneficial ownership reporting notice how it's like yeah see Tech issues we'll get through it okay this is where you're all going to go if you haven't done this um the it's the beneficial ownership information and how do how do I re how do I file do I qualify for an exemption there are some exemptions but usually it's um people the exemptions are the sole props and let's say if someone owns a bank because they've already been through all of this so again this is coming under Financial crimes enforcement Network it's really important for everybody and I'm just going to see would you let me know if we can hear hello I am with the US Treasury Department Bureau called the financial crimes enforcement Network or finson you may have heard about this new anti-money laundering law the corporate transparency act that requires many companies doing business in the United States to report information to the US government about the real people who own or control them today I'm going to show you how I would file a beneficial ownership information report I'm going to start with the website fincen.gov on the website I can see some information that will help me determine if I need to file and what types of information I would need to provide let's say I'm an owner of a small business ABC Inc that I've recently formed with my secretary of state I've reviewed the small business resources on fent's website and determined that my company is not exempt from reporting so I will click here and file a report The Beneficial ownership information report and today I'm going to select the option to file online using the web form in the future I may need to update or correct the Boi that I filed so I can do that here by selecting the different options since this is my first time filing I'm going to select initial report and then click next first I'm going to enter the name of my company ABC Inc I don't have any alternative or DBA names so I'm going to skip this field and then enter my number here [Music] I formed this company here in the US so I don't need to select anything here but I will select the United States in field 10 I filed my paperwork in the state of Virginia so select Virginia and then enter the address city state and zip next I'll enter information about the company applicant this is the person that actually filed my company formation information with the Secretary of [Music] State the person that filed for my company is my tax accountant so I'll be entering information here I will enter last name first name date of birth and business address [Music] this form also requires the identification type number and where the document was issued from in a picture of the ID I'll need to provide an image of the ID so I'm going to click on choose folder and select image and select open no other person was involved in the filing of the document that created my company so I don't need to add any more company applicants at most two people may be reported as company applicants and only companies that were created or registered in 2024 or later need to report company applicants finally I'll move to the beneficial owner information part since I own this company I'm going to enter my last name first name date of birth and address [Music] similar to before enter the identifying document number and upload an image notice you're doing this twice because I'm the only beneficial owner that's all I have to do here but if I had more beneficial owners I would need to go up and click this button add a beneficial owner now that I'm on the last page I'll enter my email my first and last name because I'm submitting the report to fsen now I'll click here to certify that I am filing this beneficial ownership information report on behalf of the reporting company and that the information I provided is true correct and complete then I will select the capture check boox and prove that I am human ready to [Music] submit it will take a few moments for the submission to go through and now I see the confirmation page it's important for me to download and save a copy for records in case you need to refer to them again or if any problems or issues occur and that completes the filing of the beneficial ownership information report okay I and again I just wanted to it looks like I'm impressed we didn't lose any of the participants during this so what this this is so important because as and when you're filing it one of the I'm hoping that you can get on I would go and get the copy of the training that I did because we I this video was there but I also had two other people that showed you how to fill it out one is Hector Garcia and I forgot the other person's name and they're they're both really good but I love Hector Garcia he goes this is a hot mess and he's talking about the if they say the paper filing do the electronic um Everybody I've heard the electronic filing is um just does so much better and the the uh paper filing is I understand that there's some problems with it again I'm not an expert in that area but I can't stress enough you you know and congratulations every single one of us down here that has a small business Bravo and Kudos so the the whole idea is for you to grow your business you to really feel comfortable growing it you know and you know just even starting a business growing a business and I do encourage you to um look at the sbdc and again we don't charge anything for what we're doing so it's it's really it's really fun we make an appointment we sit down we talk about it and I was working with a client today and I said you know it's a collaboration I'm not telling you what to do and we got my favorite line is because I I grew up in New York area and I said and I always tell the client I said you can look at me and say John you're out your mind and I'm not going to be offended because this is a collaboration of business and watching and finding ways to let you grow we have some really good successes um I hope this has been helpful and I see do we have any questions Shere I need to go through let's see okay yes thank you uh you're so efficient so there's a Boi uh vbdc Boi webinar the link has been put in the chat box and um so really do not hesitate if you feel that you know some of this financial information was just a little bit over your head come in and see us we'll talk you through it we'll train you and it's it's a lot of fun because once you are you you're that expert it really is a great it's a great thing for you to watch your um to watch this grow I thank and I'm just I'm so blessed to be here in the Virgin Islands I uh I just want to see and my heart is let's get small businesses to flourish because you all deserve it okay keep reaching out let us know any any other questions okay Miss shica is there anything that you would like to I just dumped a son by the way we really we're all in one office because of an issue and it's really kind of fun we're just yelling back and forth at each other so okay please remember to um do the survey at the end really would appreciate that and again I'm doing the financial uh I'll be doing more financials and we have the advanced financials coming up next week thank you all so much it is just a um it's a just a blessing to be here with all of you thanks