If you don't have a high interest savings account earning more than 1%, then you should open an account at Synchrony, Capital One 360 or another recommended by NerdWallet.
You can connect your bank and create an automatic schedule for recurring transfers. I love that the Capital One 360 has their savings goals setup: www.capitalone.com/bank/360savings-guide
They make it easy, because you get to set the amount of how much you want to save by what date for what purpose, and then it calculates how much you have to transfer to the savings account based on how often you want the transfers to occur. This makes it easy and fun to save.
Let your money work for you! Automation immediately changes your mentality with saving. If you don’t have the money, you won’t spend it.
Most high interest online-only savings accounts, take a couple days to get the cash unless you get a Debit card, so it makes using it more thoughtful.
Do you really want to take out $60 for that sweater, instead of be $60 further towards the down payment on your house, your dream trip for the year, or that tool you’ve been eyeing?
The dollars make the tens and the tens make the twenties.
The twenties make the hundreds and the hundreds make the thousands.
Stash it away!
Q. Do I have to offer the 2/10 Net 30 discount? Is it expected? And should I include penalties if paid after 30 days? I'd like to be paid a deposit with the balance paid within 30 days of product receipt.
A. No! You can do whatever you want! Most people do not expect a discount, while some (like Uncommon Goods) enforce it.
- For first orders, I recommend 50% deposit to place the order, and balance paid UPON SHIPPING. Meaning, you either retain their credit card info (this can be stored under the Customer info in STRIPE), or you call them and process payment over the phone the day you ship. You aren't a bank; you're a small business. When you are delivering the goods, you should get paid. This can vary with turnaround times, so you may be able and willing to be more flexible.
- However, if you take an order, buy the materials, make the goods and your turnaround is 4-6 weeks, then waiting another 30 days after that can be too much on your cash flow.
- Studies have shown that most people will wait until the due date on the invoice to remit payment, so keep that in mind. For Retail Sales Invoice, it should be DUE UPON RECEIPT, and at most put 7 or 14 days, then they will most likely pay as soon as they receive the invoice. The more flexibility, the more used. I always think of Sebastian from The Little Mermaid: "give 'em an inch and they'll swim all over it!"
- For wholesale stores who are placing reorders, then their terms can change to NET 30, and again, depending on your turnaround time, this is usually after Shipping, but may be after the Order is placed.
- For penalties, such as charging interest on late payments, yes, you should charge at minimum 10% interest for each 30 day period past due. This one is hard to enforce – I find that I don’t have the backbone to do this even to my own clients, but it does make sense to do so. You’ve already spent the money to provide the service or product, and just like a credit card collects interest, you should too. Everyone has a reason for not paying, just as the squeaky wheel gets the grease, so you have to decide if you’re ok with not getting paid (right away), or if by requiring interest on overdue payments you will get paid faster.
Do what feels right to you. You set the terms, and usually (I have seen a few stores require meeting their own terms, but that's unusual) if it's typed and presented, then that is what is followed.
Use this document to customize your own Returns, Exchanges and Repairs Policy copy.
You probably already know that if you are self-employed, then you are to pay self employment estimated taxes to the IRS each quarter, right?
But you may think you have to mail in the remittance slip that came with your filed return for the prior year, and you can, but that's not the easiest and safest way.
You may also think you need to spend hours, which intimidates like days, to calculate what you owe. This is just not true. It's not that complicated and it's an ESTIMATE for goodness sake.
You should refer to your prior year return for the minimum estimated payment based on what was owed last year. If you owed tax last year, you will have payment remittance slips with the estimated amounts typed on there for you!
See below for the link and instructions for the easiest way to pay Self Employment Estimated Taxes online at IRS.gov
Robin from Flourish and Thrive Academy asked us:
Q: What Reports should be run each month?
A: There are 3 main reports you should review each month. We call these your key Management Reports.
Q: I've seen a lot of people getting hacked on FB and I'm scared it's going to release my credit card info. I tried to cancel payment and I'm not sure how to disconnect my credit card from these socials? Any idea?
A: If you have a Facebook Ads account, you won't be able to remove your primary credit card.
- Use or create an email address specifically for social media, mailing lists, unimportant subscriptions, etc.
- Never use an email account for social media that also receives sensitive information.
- All someone needs is the last 4 of your social, your full name and your birthday to steal your identity. So, if you have things like this stored in your email, make sure it's not available on Facebook or other social media accounts and make sure that this email address is not associated with your social media. I've heard that if they can hack your Facebook, they can hack the associated email.
Q: I am in the process of setting up our Shopify POS. I've had two sales on it. Is there anything I need to do to document these sales or are they all going to be registered on Shopify? Can I run reports for retail/shop sales in Xero or do I need to do that in Shopify?
A: Shopify and Xero work seamlessly together! Here are the details and step by step instructions for the integration.
Shopify is my favorite e-commerce integration.
Ever filled out a tax form and wondered what the heck an NAICS (North American Industry Classification System) code was? Here are instructions on how to select the right NAICS code as a jeweler that manufactures a finished product and sells both wholesale and retail.
You can use the search feature at www.census.gov/naics. In the "2017 NAICSSearch" box on the left side of that page, enter a keyword that describes your kind of business. A list of primary business activities containing that keyword and the corresponding NAICS codes will appear.
Q: So the owner’s draw doesn’t have any tax consequences like a salary would, correct?
A: Correct - the owner's draw account does not have any tax consequences like a salary. As a Sole Proprietorship or single member LLC (seen as the same as a Sole proprietor to the IRS), the Net Income (the total at the bottom of the Income Statement) is your taxable income that flows through the Schedule C and to you personally on your income tax return. The IRS considers the Net Income your Compensation. However, there are some things to consider.
Q: Before realizing I should have been putting everything to owner's investment, I repaid our joint account for approximately $2500 last year. I wouldn't have if I had used my personal account, but this wasn't all my money! Can I just do an owner's draw? Or would I have to set up and pre-date a loan and subtract each transaction from it? [read more]
Q: So um... what's the deal with sales tax? When my customer buys something from my SquareSpace website, are they paying taxes? What about wholesale orders?
If I am creating invoices to stores who are buying wholesale from me within the same state as me (California), should I be charging them sales tax?
Where do taxes come into play with pricing formulas?