/Pricing/Accounting;/U/Blog;

What is accounts receivable and where can it go wrong?

Accounts receivable is the name given to both the money that’s owed, and the process of collecting it. So the accounts receivable process includes things like sending invoices, watching to see if they’ve been paid, taking steps to chase payment, and matching payments to invoices (also known as invoice reconciliation). The accounts receivable process is sometimes called bills receivable, and some people simply call it invoicing.


What is ageing of accounts receivable?


If an invoice hasn’t been paid by its due date, you start to age it. You do this simply by counting each day that’s passed since it was due. If it was due four days ago, you give it an age of 4 days.


What does an ageing report do?


An ageing report shows all the past-due invoices, from least overdue to most overdue. At a glance, you can see which bills you’re waiting on, and which have been outstanding the longest.

The more an invoice ages, the less likely it is to get paid at all, so review an updated report often and act decisively. Decide what steps you’ll take to recover debts as they age. Will you email at day 1? Will you call at day 3? What’s your next move? and when will you make it?

Get tips from our guide on how to treat overdue invoices.


Is accounts receivable an asset?


Accounts receivable is money you’re owed, which makes it an asset. In fact your invoices are so valuable that some companies will even buy them off you.

Once an invoice is paid, it’s no longer an asset – it becomes cash in the bank, which is even better. And if you never get paid, you’ll ultimately write off the invoice as a bad debt. Once it’s written off it’s no longer considered an asset.


Wait! I can sell my invoices?


Invoices are money you’re owed. If you sign them over to someone else, they can collect the money. Some finance companies will buy invoices from businesses that can’t wait for the customer to pay. This is called accounts receivable financing, invoice financing, or invoice factoring. These finance companies realise that older invoices are less likely to get paid. So you probably won’t find anyone willing to buy your really old invoices.


What is accounts receivable financing (invoice financing)?


Some finance companies will pay you up to 90% of the value of an invoice if you sign it over to them. It’s a way to get money you’re owed without waiting on a customer to pay.

The finance company will make a second (remainder) payment to you when the customer settles the invoice. You’ll never get the full value of the invoice, because the finance company takes fees. And they won’t buy old invoices so it’s not a dumping ground for bad debts.

Speak to your accountant or financial advisor before using these types of services.


What is a bad debt?


When invoices aren’t likely to be paid, you should write them off as a bad debt. It’s lost income, and it’s important to capture that in your accounting records – especially as you may have already paid tax on that invoice. And seeing as the income isn’t going to happen, you need to claim that tax back. You do this by writing off the invoice.


When should I write off a bad debt?


You should write off a bad debt whenever you think there’s no reasonable chance of getting paid. Your customer may have gone broke, or you might be locked in a dispute that’s not likely to be resolved, or they may simply be ignoring your reminders.

Whether you write it off after 6 months or 18, don’t give up on it.  Even after you’ve written off the debt, keep sending innvoice reminders. If they finally pay, you can always declare the income on your next tax return.


The importance of a good accounts receivable process

When everyone’s late paying, business gets hard. You might run out of money to pay suppliers or staff. It’s one of the most common reasons businesses go broke.

It’s important to treat invoices like the assets they are. Set up an accounts receivable process that maximises your chance of getting on-time payment. There’s a lot you can do.

Check our guide on building an accounts receivable process for more.

Read more

The Basic Requirements & Challenges for a Small Business

Notably, in a professional company where services are rendered, a lot of requirements and skills you haven’t been trained for in your profession would be needed. Likewise, challenges you do not expect would keep coming up. As a business owner or a professional business owner, every category of customer or every client would have their own unique needs, so you would need to put a lot into relating with them effectively.


The Basic Requirements for a Small Business

For a small business to run, you need:

• Business license, registrations and permits
• Financial requirements
• Legal structure
• Insurance


The Challenges of a Small Business

Here are some of the significant challenges of small business experiences:

• Unfavourable government regulations
• Sticking with few clients at their own risk
• Tax Compliance
• Unsteady cash flow

Looking at the challenges of a small business, without proper accounting, a small business owner would never be able to overcome these challenges or cope with the costs of maintaining these fundamental requirements on the long run.
However, many small business owners find themselves facing problems with accounting. Accounting remains a major challenge for many small businesses; especially when it comes to those rendering professional services.

This category of people could come from various fields and in fact, all walks to life; from doctors to lawyers, to writer, engineers, architects and consultants.

To maintain a unique accounting structure, a small business needs additional accounting requirements such as:


• Choosing the billing method that works best for you: Before you have an excellent structure for accounting, you need to figure out which billing method works best for your business and put it in place. This way, you would be able to get your payments from clients in the manner which you have previously agreed upon.

• Proper documentation of costs per client: Ensure you document all the expenses and the right bill for each client. Writing it down is far better than making a mental note, as you don’t want to bill them wrongly or forget to charge them altogether. 


• Reports on your income as well as your expenditure: These reports would help to avoid financial constraints over time. Stories would also help trace where the bulk of your money is and how to maximise your profit. 


• The embracement of online payment platforms so you can receive quick payments from anywhere in the world. Examples of such platforms include PayPal and Payoneer. 



In Conclusion


Small businesses are not easy to manage. However, with proper data (especially those obtained from accounting), many processes will be so much easier. The data gathered on your finances from accounting can help in gauging your growth rate as a business in a few years and over the years. It would also assist you in identify the lapses that need to be checked and help in maximising your profits; which is the ultimate goal.

Read more

Brand Loyalty: How you can keep customers coming back


While the idea of getting new customers to love your business and patronise you might seem cool, the cost of ensuring existing customers remain loyal to your brand is 5-25 times lower. 
 

Many brands do not know this secret, so they tend to focus on getting new customers rather than leveraging on their existing customers. 


Existing customers who become loyal to your brand become a means of advertisement over time. They can become fans who would turn into advocates for your brand and consequently, promoters of your brand. 


This entire concept is known as, “Brand Loyalty”. Brand loyalty refers to the tendency of consumers to keep purchasing one brand’s products over others. Even if a brand keeps getting new customers, without learning the concept of brand loyalty and its application, the customers will keep leaving. 

After establishing this fact, the next question any business owner would ask is, “what can I do to ensure my customers are loyal to my brand?”


The next section will open your eyes to exactly what needs to be done.




Practical Ways to Keep Customers Coming Back Through Brand Loyalty
 



• Focus on the Customer Experience


From the beginning of time, humans have always acted based on their emotions. Therefore, if you hope to make customers loyal to your brand, you’ve got to appeal to their feelings. This can be achieved when you focus on the customer experience.


The central theme here is asking the question, “How does my brand make my customer feel?” After requesting and seeing your lapses, then, you can improve. This is the very first step.
    

• Aim to make your customers happy consistently


Whatever decision you choose to make as a company, ensure it is focused on making sure your customers are satisfied. This way, it wouldn’t be about how good an idea is, but how beneficial it would be to your customers. The way your staff dress, act and show themselves would also be based on what your customers like to see and related to the kind of experience you want them to have. Leaving them lovely notes every time they purchase a product online, engaging them on social media and sending them special greetings on the days that matter most to them would also make them happy and draw them to you. 



• Imbibe the use of a point system


A point system essentially means allowing your customers to have a number of points based on the number of products they purchase. A certain amount of points would then translate into something tangible. The reward for the points may be discounts, a cash prize, a trip or something that would get every customer on your list participating.



• Focus on the Value system of your customers


Human acts on emotions, and many a time, feelings are based on beliefs. If a company can capitalise on the value system of its target market, it will draw more customers in. A good way of appealing to the value system, beliefs and consequently, the emotions of your customers by engaging in community projects.




To Wrap It Up
  

A company may end up spending a whole lot to achieve brand loyalty, but this amount can never be compared to the amount that would be paid in gaining entirely new clients.

Read more

Leadership qualities and how you can improve them



This article is focused on five leadership qualities and how a person can get better at expressing these qualities. So, if you are a leader that hopes to become better or a follower who wants to develop his leadership abilities, this piece is undoubtedly for you.


However, let us define who a leader is.


According to John C. Maxwell, a leading author of several books on leadership, “A leader is one who knows the way, goes the way and shows the way.” 



This is a huge responsibility and to achieve this, a leader must have these five qualities:

  • Good communication: For you to show others a particular path to follow or a specific strategy to use, good conversation is inevitable. Without being able to communicate your plans to your entire team, failure would only be a step closer. 
  • Integrity: Without integrity within a group, it would be impossible to achieve success. In the absence of completeness, it is impossible to trust. If a leader’s integrity is questionable, it will rub off on the rest of the team, and it would be impossible to achieve the team’s goal.

  • Creativity: Creativity is what distinguishes leaders from followers. If a leader lacks creativity, there would be no vision. The creative juices of a leader must continually be at work to ensure that the team keeps up with the changes around the world.
  • Delegation: This is a quality that helps a leader carry out his role effectively. Also, while a leader delegates, he is indirectly empowering his followers by giving them more tasks that would help them develop their abilities. 

  • Empathy: In a bid to avoid the trap of sympathy, many leaders neglect empathy as well. This way, the followers would feel resentment towards the leader and begin to see them as a dictator who does not care about their difficulties.




How to Improve These Five Qualities 


After seeing the importance of each of these qualities, it is essential to know how one can get better at expressing them.
  • Good communication: Many leaders mistake talking for discussion; talking is merely a way of communication. The mood, the emotions and the gestures you show while speaking and listening is essential. Ensure you are not a dictator, but you are instead making your follower(s) buy into your dream.  Also, ensure to listen and never shun anyone. Lastly, no question is stupid; entertain all forms of questions. 

  • Integrity: Ensure you have someone who can keep you in check, especially when you find yourself in compromising situations. This would go a long way in maintaining your integrity as a leader. This person could be another leader in his rights. 

  • Creativity: Travel, meet new people, meet & network with other leaders at events and experience life for what it is. This way, creative ideas would keep coming. 

  • Delegation: It is vital that a leader does not take all the work into their hands, as this could lead to failure. To improve on delegation, always remind yourself that individuals within your team have several abilities and these abilities are to be used to advantage. Also, make sure to provide the resources necessary to go about the tasks you have delegated. Therefore, figure out what needs to be delegated, figure out the right man for the job, provide the resources necessary and reward them when the job is done. 

  • Empathy: Constant efforts have to be made in ensuring you are empathetic towards your followers. Choose to love them and never hide your love for them genuinely. Remember, empathy does not dwell in a problem; it finds a way to fix that problem.

Read more

The benefits of advertising on Twitter

Twitter, however, has made some useful changes with how brands can utilise the platform to increase activity.

The big questions are:

  • How does Twitter give businesses an option of a different platform to advertise on?’  

  • How do businesses know if it’s the right choice for their company?’

These questions are going to determine how much an organisation can benefit from advertising on Twitter, so without further ado, let’s get into it.
 
There are a few things to understand before going into the benefits of advertising on Twitter.


Three things to note before advertising on Twitter:

1. Learn how to Create Ad campaigns: 

To elevate your business, create Twitter ads that are highly engaging with the use of high-quality visuals and contrasting colours.
You can make your ads fun by combining organic and paid material to advertise on Twitter effectively.

 2. Use Twitter regularly: 
It’s very illogical to want to advertise on Twitter without spending quality time on the platform. You can choose to offer discounts to your customers and make limited time offers.

3. Don’t try to sell right away: The key to utilising Twitter is to understand, apart from promoting high-quality content, is that keeping it simple right from the start guarantees popularity on the platform. Try to keep the tweets fun, short and exciting before even declaring what your business has to offer to the Twitter society. 

Four Benefits of using Twitter to advertise your business:

1. Twitter has a very receptive audience:  

Advertisers today understand how tasking it is to get consumer attention. It’s essential to reach the right audience, but it’s even more critical that the audience is receptive. What Twitter does is uniquely provides its users with the ability to discover what’s trending across the world. This makes the Twitter society a fearsome collection of users that are aware of what is and what’s not. This is different from other platforms.
This functionality of the platform puts this society in a receptive mindset so that information is kept in their long-term memory more efficiently. Your business can utilise this advantage that Twitter provides, to strengthen the purchase intent of the users by making sure to trend.

2. Twitter society can generate concrete influence:
Twitter users have been proven to be hugely influential. This influence can be universal; Twitter users can create influence across their immediate environments regardless of geography, age, gender, or topic. By just sharing a Tweet, a Twitter user can create an impact that can make an entire franchise trend on the platform.

3.Twitter’s users and brands:

Brands that get trendy on Twitter are those that appeal to Twitter users, they are usually demanding consumers who desire quality and responsiveness, and they actively reward users that put in the effort.
Twitter users are always willing to pay more for quality products that also saves time, as well as being more brand conscious, choosing brands that fit the best with their values.

4.The platform itself is curious:
Twitter regularly gathers information on how to provide it’s users the ultimate experience. This combined with the overall influence, tendency to distribute information, and loyalty to brands offering quality products in a way that align with their values, are the perfect catalyst for any marketers campaign.

Read more

Five Marketing Ideas to Grow Your Business When Stuck in a Seasonal Rut

5 Marketing Ideas to Help Grow Your Business During Seasonal Slumps

1. Off-Season Discounts

You know how hotels and resorts offer reduced room rates off-season to draw customers in? Take a cue from these businesses and offer discounts on your services to get your clients thinking about tasks they usually do at the last minute or are far down on their to-do lists. Whether it’s creating a living will or reconciling bank statements, offering a discount could be an incentive for your clients to be proactive (and also bring in money for your business).

Another marketing idea that can help grow your business is to keep in touch by email to let your clients know you’re still available to provide services during the off-season. Include a menu of items pertinent to your clients’personal or business needs. Write an attention-grabbing subject line for your email correspondence. Make it a limited-time offer and include a calendar of important deadlines, so your clients see the advantage of taking care of these tasks now. You can also follow up with a phone call to remind clients about the off-season discounts you’re offering and answer any questions they may have.

2. Promote Retainer Discounts

To keep cash coming in all year long, consider offering your clients a discount for hiring your business on a retainer (or a monthly payment plan)instead of paying on a per-project basis. Play up the advantages they’ll enjoy from getting your advice year-round and the overall discount the monthly payment can bring them.

As a professional, you know the end of a project is never really the end.Questions and issues always arise where your client might need more help or answers to questions. Setting up a retainer contract can put your clients’worries to rest knowing you’re there for them when they need you.

To combat any reservations clients may have about a monthly retainer fee,you could sell them on the fact that you’re not only there for them when they have a question, you will also continually work on their business or portfolio to look for ways to improve their situation and offer advice. Come up with an individualized offering for each client detailing what you’ll be doing monthly for them. Be sure to be specific as to how this will help improve their circumstances overall. What you want to avoid is your client thinking their monthly payment is a waste of money if they have no issues or questions. If you can show them how you’ll be working for them every month, you can assuage their concerns—and earn the business.

3. Offer New Services

Is there a service your clients frequently ask for that you don’t offer? Do you find yourself referring your customers to another business for services you could be offering yourself? Brainstorm with your staff or peers to think of other services you could offer your clients. For example, CorpNet’s partner program makes it easy to offer business formation and compliance services to your clients without you having to do the work.

If you’re not sure what your clients would like to you to offer, conduct a customer survey to see what their needs are and what other services they are interested in. You can put the survey on your website or use social media platforms. There are plenty of helpful survey tools available such as QuestionPro, SurveyMonkey and Zoho Survey. 

To get better results, don’t just ask participants to tell you what services they want—they may not think of any. Instead, ask about your clients’ goals and any problems they have come across they couldn’t solve. Then come up with services you can offer to help them reach those goals or provide solutions to their issues. The more you can find out about your clients’ businesses or personal situations, the easier it will be for you to develop new services to offer in the future and think of other marketing ideas to grow your business.

4. Make Connections

The off-season is a great time to ramp up your business connections by partnering with other businesses, volunteering in the community and networking at business events. Obviously, thinking about marketing ideas to grow your business is nearly impossible to fit in during your busy seasons while you’re under the gun to meet project deadlines. However, during slower seasons, building new relationships and strengthening existing ones is the best way to spend your downtime.

Ask your clients what other services they use, and see if you can meet with the other businesses to strike up a partnership. Perhaps you can co-market each other’s businesses to share in each other’s promotional efforts. Or you could offer your services together as a package deal to bring in new clients and increase revenues. You might be amazed at your success when you put your heads together to conceive marketing ideas to grow both of your businesses.

Think outside the box when looking for partners or places to volunteer. Local schools always need professional help; community events are always looking for sponsors. Even your local recreational baseball teams need sponsors. Having your name associated with a local team can be an effective marketing idea that builds your business as it helps raise community awareness of your business. Volunteering or offering your services to a women’s shelter or church organization is also a great way to show your local support and shows potential clients you’re committed to being a positive influence in your community.

5. Leverage Customer Satisfaction to Gain Referrals

Finally, use your off season to work on getting referrals. Professional businesses are built on their reputations and need customer recommendations to survive. In the study, The State of Business Customer referral Programs, both B2B and B2C business owners say the majority of their referrals come from social media (29%) and email (23%).

Have you checked your Yelp reviews lately? Be sure to include a link to Yelp on all your correspondence to encourage reviews. Online reviews can serve as powerful marketing tools that will help you grow your business. Follow up on all negative reviews immediately by reaching out to the unsatisfied customer and trying to make it right. Set up a referral rewards program. For every referral that turns into a client, send the referring client a gift card to a nice restaurant or store in your area (according to the referral survey, gift cards are the most popular referral incentive). Most satisfied clients are happy to refer their friends, family and business associates—all you have to do is ask.

‘Tis Always the Season to Think of Marketing Ideas That Will Help Your Business Grow

By taking these steps you’ll be on your way toward boosting your business. Stay positive, get creative, and turn that seasonal slump into a time of success.

Read more

Profitability and cash flow trends for tradies

Emma Crawford-Falekaono, CRO at Tradify, sees cash flow issues reflected in customer data on the number of jobs completed and invoices marked as paid. She explains, “For small business cash flow is really important as often there is a minimal amount of capital available to the business to fall back on when times get tough. Cash flow issues can lead to the inability to pay staff, provide services, order materials, commit to work, invest in R&D etc. Positive cash flow isn’t a goal for everyone though. Startups in growth mode deliberately run at a loss. These types of businesses recycle all revenue back into the business to fuel growth and fund the shortfall with external capital.”

Xero Small Business Insights have analysed data from tens of thousands of small businesses, and have noted interesting trends both in the trade and construction industry, and in the wide small business sector.  Throughout the year, cash flow and profitability fluctuate seasonally. In the construction industry in particular, there are some interesting trends, including a large dip in cash flow during Jan, which takes until March to recover.

This January dip is interesting, because it coincides with a significant spike in December – consistently the best month of the year for construction companies getting paid. Why are tradies getting paid so much in December, but struggling during January?

On the surface, this probably relates to the Christmas/New Year shutdown and summer holidays. In a labour-led industry, if you’re not working, you’re not being paid, and because many tradies take their own holidays in December/January, and all their clients are also on holiday, the work dries up post Christmas. The December glut can be accounted for by clients who want their work done before the Christmas holiday, and they’re willing to pay for the privilege, especially as the boom in the industry stretches resources.

Clients in the construction sector are slow-paying at the best of times, when compared with the New Zealand average. However, since Xero started analysing data, they’ve been consistently lower than professional services and agriculture. This is a positive trend and, as Xero have noted, may reflect the adoption of technology and cloud-based accounting, where it’s easy to see what has/hasn’t been paid and send reminders. (Overdue invoices with a reminder are paid on average four days sooner than those without).

Getting paid on time is a huge hurdle across all small businesses, who exert only limited control over timely payments. More tradies are utilising features within their technology suites – such as reminders and accepting deposits up front – to help mitigate the damage late payments cause to cash flow. Some tradies are also integrating Stripe and Paypal payments into invoices, which Xero points out invoices paid via Stripe or Paypal (in conjunction with the Xero platform) are paid 10 days faster than other invoices.

As small businesses make up 97% of all businesses in New Zealand, Government are also making an effort to help manage cash flow. The new Accounting Income Method (AIM) introduced in April enables businesses to pay provisional tax in line with their monthly income. It’s too early to assess results, but it’s hoped it will help manage cash flow across the year.

“We’re excited about what AIM will mean for our tradie clients,” says Dan Henderson, Managing Director of enablebusiness, an accounting firm operating across New Zealand specialising in business development & coaching. “Being able to pay provisional tax based on what you actually earn that month makes a huge difference in businesses like the trades where income is uneven across the year. enablebusiness work with their clients to achieve Financial, Mind & Time Freedom. By focusing on Financial Freedom and through coaching, enablebusiness clients can gain control of their cashflow, ease the day to day financial pressures and improve the stability of their business.

“If you’re managing your work and finances in the cloud, you can use reports to understand the fluctuations in your business,” explains Crawford-Falekaono. “You can identify the months when work has historically been slow, and try to book ad hoc jobs in advance to smooth out your workload. You can also see the types of jobs that bring in the most profit for the least amount of work, and focus on acquiring more of that work.”

Things are looking up for tradies worried about cash flow, but the key to managing your profitability is the ability to measure it. Small businesses like tradies are always susceptible to market changes and seasonal shifts, which can wreak havoc on cash flow if you’re not prepared. Cloud-based software like Xero and Tradify enable you to gain visibility over your cash flow so you can effectively manage your business.

Read more

5 Key moves to help you become gainfully self-employed

I had been working in corporate finance for five years, and as you can imagine, I was bored out of my mind.

Fast forward to December 2018, and I am officially (and gainfully) self-employed. I don’t have a side gig to help pay my bills. I’m not constantly searching online job ads. And I feel comfortable enough with my finances that I can finally breathe.

I’m the happiest, most productive, and most fulfilled I have ever been in my life.

But getting from point A (the soul-sucking corporate gig) to point B (working for my mentors with the flexibility and freedom of a freelancer) was no easy task.

And today I’m going to shed some light on how I got to where I am now.

Self-awareness is a superpower

“Each person has a greater potential for success in specific areas, and the key to human development is building on who you already are.” – Don Clifton

Developing self-awareness sits at the top of everything I have been able to accomplish over the last few years.

It’s helped me conquer procrastination, perfectionism, and plenty of other obstacles that I had previously allowed to stand in my way.

Simple self- discovery gives you the confidence to step outside your comfort zone and take on challenges you may have previously dismissed as “too hard.”

So, before we dive into the more business-related strategies I’m going to share with you, here are several of my favorite ways to learn more about yourself.

  • Kathy Kolbe’s A Index: An assessment that measures your conative strengths, which is the why behind what you do.
  • Gretchen Rubin’s Four Tendencies Quiz: See how you meet inner and outer expectations in your life. It’s incredibly helpful for habit development.
  • Sally Hogshead’s Fascination Advantage: A personality test that measures how others perceive you at your best and how you can use your most powerful traits to make a better first impression.
  • Perry Marshall’s Marketing DNA Test: This tool is used to assess your natural persuasion and communication style. (You can grab it for free if you get his 80/20 Sales & Marketing book).

Moving past the profound power of self-awareness and the catalyzing effects of curiosity, there are more specific actions I took to leave the corporate conveyor belt and enter the world of freelancing.

I made plenty of mistakes and wrong turns before I found (and actually implemented) these strategies and systems, but in the hope that I can reduce the time it takes for you to find your own “freelancing groove,” here are five key moves.

Key Move #1: Self-directed learning

How to strengthen your skill set, stack your talents, and focus your learning

I spent plenty of time learning new things when I first discovered online business.

The problem was, I wasn’t implementing the impactful stuff. I was always falling for “shiny-object syndrome” or procrastinating on the hard stuff. Sure, the courses I bought were great, but I was just consuming constantly, and never creating.

That is, until I adopted the concept of “just in time” learning.

“Just in time” learning is about focus. When you focus your studying and can implement as you go, you can turn what you learn into a sellable skill and use it directly in your business or next career move.

I learned “how to learn” a little too late for my liking (and managed to rack up some significant debt from being so unfocused). But once I figured out how to weave what I learned into my projects to achieve my goals — my results started to change.

If you’re like me and love to learn — but get stuck on actually implementing the lessons — I suggest shifting into “just in time” mode.

Focus on one thing you want to improve, understand how it will directly affect and improve a current project you have, and use it to achieve the results you want.

It pays to invest in the right education. But it’s a waste of time and money if you don’t take the action necessary to use what you learn.

Key Move #2: Relationship building

How to build valuable and genuine relationships with your mentors (and turn them into paying clients)

The word “networking” has always produced icky feelings for me. And because of my distaste for it, I’ve never set foot at any networking event.

I do all my connecting and communicating online. And for the most part, I focus on connecting with the people I love to learn from. 

Up until very recently, I had never met any of my online mentors. But I now work with two of them!

Brian Clark and Sonia Simone have taught me so much over the last few years. And just by being present, genuinely curious, and eager to add value, I was able to build those relationships into opportunities that changed my life.

Bear in mind that both these relationships started out completely one-sided, but as I began to develop my connections, possibilities started to present themselves.

If you’re wondering how to open these kinds of doors for yourself — here are a few things I did:

  • I signed up for my mentors’ email lists and read their blogs.
  • I used Twitter to stay on their radars (a less crowded place for networking than Facebook or Instagram).
  • I bought their courses and eagerly learned from them. (They do what I wanted to do, so it made sense).
  • I developed my skills enough so that I could offer value to them in the future.

These are simple steps — but they take time. And while most of us look for quick fixes and shortcuts, playing the long game has always produced better results for me.

The digital world makes it very easy to connect with people you don’t know (but want to). And as long as you’re consistent, genuine, and aren’t looking for them to give you anything in return, the opportunities are endless.

Key Move #3: Guest blogging

How to ease your marketing fears by using a strategy that makes sense for you

Marketing was the most difficult concept for me to grasp when I first started out online. In fact, a lack of marketing is why my first business venture failed so epically.

I am not a natural salesperson. I hate rejection and don’t enjoy that side of business at all.

But I learned from my mentors that there are better ways to sell than the “in your face, pick me, pick me” style that I was aware of.

As an introvert who prefers written communication, discovering content marketing was a huge “aha” moment for me. And learning this alternative way to sell and market myself is what led me to where I am now.

Guest blogging is my favorite marketing and traffic strategy to use. And coupled with smart email marketing, it’s a killer combination for any solo business operator.

But most importantly, it was the marketing strategy that worked for me. Mainly because writing was something I really wanted to do, and that desire meant I was willing to invest time, energy, and resources to develop the skill.

And of course, my career benefitted from my writing too. After all, it was the strategy I used to start writing for Brian on Further, which led to working with him on Unemployable.

Using a marketing strategy that fulfills you creatively and exercises your strengths is going to produce better results than one you force yourself to do because you “should” do it.

It also makes it easier to push past the fear and procrastination, and actually achieve the results you want.

Key Move #4: Personal Kanban

How to skyrocket your productivity with a self-management system that sticks

Self-management is a struggle for almost every freelancer I’ve met.

But luckily, it’s a skill you can develop. And when you find a system that sticks, it can transform the way you work.

In my search for productivity superpowers, I found that I needed my most important tasks out in front of me, screaming at me to get done. And this is where Personal Kanban shone through. It’s visual, tactile, and completely in your face. Plus, you get to play with Post-its.

Personal Kanban is how I manage myself and my projects. It allows me to focus on the work — not the organization of the work — making progress and getting results significantly easier.

If you struggle with getting things done and want to feel more on top of your work, you might like to try it too. I’ve written about how Personal Kanban works and my experience with it here. 

As a freelancer (or really anyone who has side-projects or a busy schedule), your self-management strategy is at the core of how much (or how little) you can accomplish. So invest time into creating a system that works for you. 

Key Move #5: Develop a support system

How to run a sustainable business positioned for growth

On any challenging journey, we’re confronted with obstacles that we don’t yet know how to overcome. And as you work your way through the solution, there are times when it feels like you will never find it.

This is where a fully-rounded support network becomes critical. Because stacking your support system is what’s going to get you through the tough times.

Connect with your mentors, look into getting a coach, seek out a community that can help you problem-solve, and find yourself a “business buddy” to brainstorm with.

Surround yourself with action-takers. The more you see others around you actually doing things, the more you’ll want to do things too.

Bonus: Commit to course correction

Before I started freelancing, I had two failed businesses under my belt.

The first was just a terrible idea and product, and the second I never managed to monetize because I let procrastination and a fear of selling get in my way.

But both of those failures (and the lessons I learned from them) lead to working for Brian at Unemployable, and now, working with Copyblogger as part of their editorial team.

“Having a growth mindset won’t make you successful, but not having one will prevent you from trying in the first place.” – James Clear

Embracing a growth mindset reminds us that mistakes and missteps are a part of the learning process. And committing to course correction is how you can move forward again, perhaps with a different approach, a new strategy, or a deeper understanding of what went wrong and why.

The road is long — don’t rush the journey

It took me two years from when I quit my job to finally get to do something that I love, that challenges me and that can actually pay my bills. And I had spent another two years prior to that learning everything I could to try to change my circumstances.

It feels like a long time, but in the grand scheme of things, four years is nothing.

I’d rather struggle on the road to heightened self-awareness and working toward goals that mean something to me than stay stuck and miserable in a career where fulfillment, joy, and most importantly, growth weren’t on the menu.

If you are struggling with your next move, worrying about your future, or feeling stuck in your current situation, consider getting to know yourself a bit better.

Self-awareness is an incredibly easy first step. And once you develop that keener sense of who you are, how you like to work, and what you’re really great at — the next steps become easier to take.

Read more

Construction accounting basics

Why is construction accounting different?

If you work in the construction industry, you’ll know there’s rarely a fixed business structure. The site manager probably doesn’t employ the other people working on a project. They are likely to be a contractor – and so is everyone else.

Contractors make up the bulk of the construction workforce. They may be working on several projects at the same time, spending a few hours or days on each. They might also employ their own subcontractors to help out.

Temporary workers will come and go as required. And if you do have a formal payroll, it may change on a weekly basis. So compared with a conventional business, this is much more fluid and changeable.

In this guide we’ll look at what you need to know about construction accounting. This will help you keep your business in the black and out of trouble.

Start at the beginning

Like any other entrepreneur, if you’re starting a construction business it pays to do it properly – right from the start. That means getting your business and your accounts in order before you take on any work:

  • Incorporate your business
    Incorporating as a small business gives you legal protection. This does depends on the type of company you set up, for example it could be set up as a limited liability company, partnership or sole trader.
  • Buy insurance
    Construction can be dangerous, from both a physical and a legal perspective. Get specialist insurance to cover you in case things go wrong.
  • Hire an accountant or a bookkeeper – or both
    Bookkeepers will help you manage your day-to-day accounts, processing expenses, bills and invoices. Accountants will help you with your business structure and advise on ways you can save tax. It makes sense to hire both. They will probably save you more than they cost.
  • Keep your skills up to date
    Laws change, especially safety laws. Keep your certification up to date by going on training courses. This is important whether you’re a builder, electrician, plumber, carpenter or other worker. Your insurance may also depend on up-to-date certification – and you’ll probably get more work too.

Get the details right

Construction accounting regulations vary around the world. You may have choices about how you manage your accounts. The following examples apply to the US, but other countries have similar arrangements:

  • Cash accounting
    This usually applies to smaller construction projects. Income and expenses are accounted for when money changes hands. Income is taxed after expenses are deducted.
  • Accrual accounting
    This is used on larger projects. Income and expenses are accounted for when they are incurred, not when they are actually paid. Accounts may be based on the proportion of the contract that’s been completed. That’s especially true for projects that span more than one tax year.

Your country may have specific laws that apply. In the UK, for example, there’s the Construction Industry Scheme (CIS). This requires contractors to collect taxes from their subcontractors on behalf of the government.

As you see, this can be a complex topic. Talk to your accountant or bookkeeper, and also get to know the people at your local tax office. They will help you avoid expensive mistakes.

Market yourself

As a contractor or sole trader, you will be dependent on word-of-mouth marketing for much of your work. So take the time to build up a network of trusted contractors or subcontractors. For example, if you’re an electrician, get to know a reliable plumber. If you’re a builder, get to know a good carpenter.

A real-world social network will help you take on larger jobs, and you’ll be able to share work and refer each other to customers.

When you’re pitching for new business, make a good impression. Your estimates and quotations should look professional and be calculated properly. Good accounting software can help. It makes it easy to create documents, with comprehensive templates to impress your clients.

Make accounting part of your workflow

One of the most important things to know about construction accounting is that you have to do it regularly. That means you need to update your accounting software with expense reviews, your cashflow, updated employee information and generated invoices at least once a week. If you fall behind in your accounts, things can quickly get out of hand. It’s a fast-moving industry.

So it’s vital to build accounting into your workflow. Sign up to some good accounting software – and then make sure you use it.

This doesn’t have to be difficult. Modern accounting tools are cloud-based. This means that they are online, so you can access them from a smartphone or tablet even when you’re working on site.

Invoices can be sent, bills of material recorded, expenses tracked – all from your mobile device. Wherever you are, whatever the time of day or night, you always have the most recent view of your accounts.

By doing this, you’ll avoid undercharging due to missed expenses. You’ll also make the most of your business tax allowances. And you’ll reduce the risk of nasty surprises that could crop up if you were audited.

Beware of the cashflow trap

Construction accounting requires caution at times. Let’s say a client wants you to build a new warehouse. You pay for the necessary materials upfront, out of your own business capital.

Then, halfway through the project, the client goes bankrupt. You’re unlikely to receive more than a small percentage of what you’ve paid out for materials. Unless you have enough capital to ride out the storm, you’ll probably go bankrupt too.

This is why it’s important to keep your cashflow balanced. Big expenses should always be matched by big revenues. Invoice your client on a regular basis – and get payment upfront for major materials or labour expenses. If a client’s payments stop for any reason, so should your work.

Many small construction firms fail because of bad debts. If you manage your cashflow carefully, you won’t be one of them.

Build for the future

Strong foundations are vital to the stability of any building. They’re vital to the stability of your business too. So take the time to get your construction accounting organised – and keep them that way. It will save you a lot of trouble in the long run.

Read more