Episode Transcript
[00:00:00] Speaker A: Welcome to Financial cures. Hi, I'm Dr. Wendy Labotte and today we begin with mindset Transformation. Wayne Dyer says, when you change the way you look at things, the things you look at change.
You're watching now Media Television.
Welcome to financial cures. I'm Dr. Wendy LaBotte and on this show we look at money challenges as systems that can be diagnosed, treated and healed. Today we're focusing on business owners who work hard, serve customers and generate income but still feel unsecure or unsure, I should say, about where their money went, what they owe and what to do next. My guest today is Mr. Joseph Reyes, a seasoned certified public accountant, business strategist, trusted advisor and founder of JL accounting and tax CPAs.
Joseph helps entrepreneurs and business owners optimize their finances, reduce tax liabilities and create long term wealth through proactive tax planning and financial strategy.
Joseph, welcome to the show.
[00:01:17] Speaker B: Hello. Thank you for having me. Good to be here.
[00:01:20] Speaker A: Well, you are the main one. I love talking to tax people because, you know, so many people get caught up with income taxes, they wait till the last minute to throw their stuff at their CPA to get the taxes done.
But you know, what are some of the symptoms that you look for when you see someone's information to prepare their tax return? Why do they feel overwhelmed by taxes, bookkeeping, cash flow? So what do you find that is the most prevalent situation?
[00:01:54] Speaker B: Yeah, so, you know, I always like to think about when you get home from work or the office and you get to your mailbox, you see all your mail and there's a letter from the irs. I can't begin to tell you how many people just freak out. And one out of two things usually happens. They don't open it out of fear. And, and I have people like that, clients like that. And the other one is that it's the first thing that they open. Right. Because that money situation, and if it's the irs, chances are they're asking for money, not sending you money, and it causes a huge amount of stress. Money problems are a major cause of marriage friction, if you will.
So just the whole topic of taxes by itself causes stress and it's an early warning sign if you know, you, if you're always that you're not sure what's going on with the business and where we headed. And you know, the year is ending and we don't have a handle on it, it's the case of death for a lot of people. So what I would say, knowing what your net profit is on a monthly basis versus what's in the bank. The two don't necessarily match each other, right? So you could have a lot of money in the bank, but guess what? That money is spoken for already. And you know, by the time you spend that money, you don't, you know, you don't have anything left to put in your pocket to bring home, you know, to feed the family, if you will. So an early warning sign is that the is earning the money versus knowing what it is and how it's accounted for. If that's happening, that's problem, right? The other one, like I said, is if you have a bank account full of money and you don't know if that money is already spoken for, if you don't know, that's a problem that that causes, that causes stress. You know, you can have payroll coming up, so you may have 50 grand in the bank, but your payroll next week could be 60 grand, right? Or taxes. You know, you're making a profit. How much of that it goes to Taxes. A big one is sales taxes. A lot of people, you know, they, they're selling, they're selling and they're collecting sales taxes. It's in the bank. But they don't realize sometimes, or they lose sight of the fact that, hey, you got a sales tax return coming
[00:04:22] Speaker A: up
[00:04:24] Speaker B: to be quarterly, and that money's not yours, you know, legally speaking, it belongs to the state. So a full bank account can really mask. If you don't have your bookkeeping done, it can mask an unhealthy situation. Whereas a lean bank account, you can have a little bit of money in the bank, but it's all accounted for properly, and that money is yours to spend as you will. You know, if you want to take a draw, a distribution or you want to invest in some other endeavor or whatever.
And another major root cause is the bookkeeping and the reporting gap doesn't really tie out to the revenue gap. So if they're not in sync, what you can wind up having is, yeah, the money's there, but you're not sure what to do with it, what's going on with it. And it's a. I, I've dealt with a lot of business owners. It's a major source of grief and aggravation and stress. The best run companies, close their books every single month.
[00:05:25] Speaker A: I agree. You know, when I started my business over four decades ago, and I said, I can't believe I'm saying four decade decades, you know, I was a rookie entrepreneur and I didn't understand those principles, you know, I, you know, had Overhead crate like crazy, but I had a lot of sales on the books, but that money wasn't in the bank.
And that's when I learned about cash flow. You know, I didn't know that you had to. I mean, I knew you need to collect your money, but I didn't realize how all that works. But I learned. And a lot of the things that you're saying are so important because, you know, I have clients that come to me, oh, I got a million dollar company. But you know, what are your expenses? And a lot of times their expenses are a million plus one, you know, so it's like, so what, you got a million dollar company. I didn't mean anything. But like I said, what is your. Not gross profit but your net profit? You know, are you making money? And a lot of people don't understand that. So when someone comes to you, say a startup, what would you recommend or how would you advise them when it comes to, you know, record keeping and bookkeeping and, you know, understanding the principles of business?
[00:06:39] Speaker B: Unfortunately, yeah, unfortunately, a lot of people go into business that they never taken a business course, you know, and nowadays it's so easy to get up to speed with the basics of running a business and knowing the financials especially, you know, AI, it can teach you a bunch of stuff. But what I would say that a business owner should do, especially a startup, you need to be tracking your books every single month, you know, and not wait for a surprise to come your way. Because startups are, you know, the statistics are what every, you know, within five
[00:07:14] Speaker A: years, they close fast.
[00:07:16] Speaker B: Yeah, so. So cash flow is always a problem for small businesses if they're not well funded to start out with. So my recommendation is, you know, just have your books done every single month. Don't look at bookkeeping and accounting like it's an unnecessary administrative expense that, oh, I'll get to it, I'll get to it. That's the case of death. Because once the books are done, it can be done weeks, months, sometimes years after the year ends or after, you know, a major event happens or the business is in operation, the next, you know, once you do the books, it may start telling a whole different story than what's in your head. And if you're a business owner running a small business and you're starting up and you're growing or whatever is going on, you're wearing 10 hats, I mean, you've got a lot of things going on in your head. Things are going to fall through the cracks. And we see that all the Time.
So what I would say is spend the money, get the books done every single month, and know what your cash flow is and create that discipline. And then if something's going south, you'll know it sooner rather than later, and that could save the business.
[00:08:27] Speaker A: Now, you talked about cash flow, and I think that's something that a lot of business owners, I don't know if they just misinterpret what that means, but cash flow, what is your definition of cash flow?
How would you advise a business owner to look at cash flow?
[00:08:46] Speaker B: Yeah, so one analogy is that cash flow is the lifeblood of the business.
So inside your body, the blood is going into the heart, and then it's pumping out of the heart. And it's the same thing with business. Money coming in, money going out.
And so if you're not understanding the flow and the rhythm of the money going out, money coming in, then you're not getting a sense of what the cash flow is. And once you get that, once you get that, that sense, you can start planning for maybe, maybe we need a line of credit in place to get us through payroll because our clients typically are paying in X number of days that may not line up with the expenses of the business.
You know, so the. It's just that word flow is, is the perfect word for it. Money coming in, money going out, and what does it look like, what does it feel like? And, and then plan for it. Because imagine not planning for it. Imagine having more outflow than inflow, and your employees are expecting to get paid and you can't make payroll.
What is that going to do to the business? Right. So having a. Having the P L profit and loss statement, knowing what that's looking like every single month, and then knowing what the, what the flow of the cash is. And that flow is accounts receivable and accounts payables. You know, accounts receivable, I sold the product or service, people owe me money. When is that money coming in? And accounts payable, payroll, you know, accounting fees, rent, utilities, whatever. And when does that do, and do they line up? And if they do not line up your cash, you have a cash flow problem. And then you got to find a solution to that problem through either loans or line of credit, which is loan. Or maybe taking money out of your personal bank account and putting it into the business to smooth it out and then take it back out when you're in good shape.
So that's my.
[00:10:48] Speaker A: Do you find?
Yeah, that's important. Like I said, as a lesson I learned the hard way now, do you find that people understand the cost of goods sold? You know, I talked to some clients and they sell a product, a physical product, and they say the product widget cost $10. And they're looking at their cost of goods sold is $10. But like I explained to them, it costs more than $10 for you to sell and deliver that product. And they don't consider all those other costs in there. How do you talk to your clients about that?
[00:11:27] Speaker B: Yeah, that's a great question.
You know, in accounting school, I mean, there are classes that focus on just that, right? So, yeah, cost of goods sold is basically what does it cost for me to just create the widget? You know, just the basic direct, the word direct expense of creating that, of manufacturing that widget. But that's only the start of the, of the story, right? So what you sell it for is obviously your sales price.
How much was the direct cost of creating that widget?
That is, you know, that's a direct cost of goods sold. The difference between those two is called the gross margin.
But that gross margin, before you get
[00:12:09] Speaker A: into that detail, you know, we, I want to, let's do that on the other side because this is going to be one that I want people to take a note on because it's so important.
But, you know, as we go to break, financial healing begins with an honest diagnosis. When owners understand what the numbers are revealing that they can stop guessing and begin making stronger decisions. After the break, we're going to talk about that cost of good soul factor which is so important to businesses. So come back and see us and get that answer. We'll see you in a minute. We'll be right back with more financial cures to help you heal your financial ills.
Become financially free. So stay tuned.
And we're back. I'm Dr. Wendy Labotte, the financial healer, and this is the financial cures on NOW Media Television. Let's continue your financial healing experience.
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So before the break, Joe and I were talking about the cost of goods sold. This is such a crucial element in businesses because a lot of business owners don't Factor that in when they're looking at their numbers. So let's go ahead and continue our conversation about the breakdown. Your example about the cost of goods sold, how to actually calculate that?
[00:14:20] Speaker B: Yeah, so it's a critical decision making tool, knowing what your true cost is of making a product.
Because if you're, if your other expenses like salaries, you know, all kinds of other general and administrative expenses, those have to be paid for by the difference, by the difference between the sales price of the widget minus the part, the manufacturing price of the widget. So if you're not pricing your products properly, then once you make a sale, you already pay for the widget. If the difference between the two, which is called the gross margin, if it's not high enough, it's not going to be, there's not going to be enough money to pay for these other expenses. So the product cost is a critical component of the decision making process. Once you have that, then you're going to price it at a reasonable price in the market for selling it. And then the difference between the two is going to supply money to pay for all your other expenses. And then of course your profit has to be built into that so that, that's the way that process works.
[00:15:29] Speaker A: So that's good, good information. And remember that because so many people just look at the cost like the price that they pay, not the, all the other factors in there. But now let's switch over to the tax side of things. Now what's the difference between tax preparation and proactive tax planning? Because so many people just, you know, say, okay, it's tax time, I'm gonna throw my stuff over here and whatever comes out, that's what it is. But let's, let's talk about strategic and proactive tax planning versus just tax preparation.
[00:16:01] Speaker B: Yeah, I live, this is the world I live in every day.
Tax preparation is just history. It's like, okay, what are the numbers looking like? How did we do last year? And let's prepare the tax return, calculate the tax and pay it. That's a historical view, which is fine. It's got to be done. It's compliance and it's the minimum that the government requires of you and investors require you of whatever. But tax, proactive tax planning is not looking backwards, is looking forward. You're in the middle of 2026, for instance.
What can we do now if we're projecting, let's say a million dollar net profit? Well, if you're a C corporation and you're looking at, you know, 200,000, maybe or $210,000 in taxes. The question then becomes, do we really want to pay those taxes? Because paying taxes is money out the door and it's gone forever. Right? So proactive tax planning is just looking at where are we now, what are, what are the, what are we projecting for net profits and is there anything we can do to not pay that tax?
And morally, and as an example, maybe you could buy a machine now that you may need instead of waiting to January, buy the machine now, buy the machine in November or December, and then you can take, you know, a massive amount of depreciation on that, which will tamp down your tax bill. So one's historical, once prophetical, so to speak.
[00:17:26] Speaker A: Well, that's good. And like I said, so many people just, I, you know, I have a tax business and so many people come and they just don't listen to what you tell them, for one. But they, they don't understand the benefits of being proactive, having a strategy, you know, if you pay a lot this year, you know, have a strategy to reduce that tax burden next year. So that's good, good information.
Why do you think people do that? Do you think it's just they don't want to face up to the fact that we had to deal with the IRS or what?
[00:17:58] Speaker B: Oh yeah. I mean, taxes are stressful. But you know what I think I, in my experience, I've seen that a lot of people don't realize that there are things you can do, there are strategies that you can put into place that would tamp down the tax.
And a lot of people think that there's nothing you can do about it. So they don't give it a second thought. They just like make money, be lean on your expenses, make a profit, and then, oh, well, we have to pay taxes and let's make sure we save for that. The fact of the matter is that the tax code is massive and there are a lot of golden nuggets in there for people who understand the code, who understand how to implement strategies, who look forward and who can work into the planning phase. And that will create a huge surprise in a good way for somebody who says, you mean to say, I can, I'll only pay $100,000 in taxes instead of 200,000, sign me up. But a lot of people don't, a lot of business owners don't realize that that's the case and, and then they pay for it.
[00:18:58] Speaker A: So what should business owners understand about the relationship between taxes, cash flow, entity structured, long term wealth? Because a lot of Them look at those as separate entities. But it's sort of a big picture that has all those elements that you really have to consider.
[00:19:17] Speaker B: Yeah. So taxes are known to be one of the number one, the top killers of wealth in the United States.
So every dollar you go that you pay in taxes, it's a dollar you don't have to invest.
And let's say AI stocks. Right. But they're on fire.
[00:19:35] Speaker A: Right.
[00:19:35] Speaker B: So what we would say is tax planning. The tax bill has to be taken into consideration along with how's the business doing? Because hopefully if you're in business, unless you're a non profit, you're in business to make a profit so that you can do whatever you want to do with that money for your family, your lifestyle, whatever. So the bottom line becomes taxes have a very direct impact on, on your wealth plan and on your future retirement, whatever it is. So what we would just say is it's all interrelated. So do the tax prep. Yes. Do the tax planning, which is a proactive tax advisor, and tamp down that tax bill so it's more money in your pocket than you invest in retirement funding for yourself, your family. You know, maybe you buy a piece of real estate or you know, maybe grow the business, reinvest it into the business, you know, which is my best advice because the business is a great shelter and it's a great wealth, you know, development strategy.
[00:20:36] Speaker A: Now I want to ask, this is kind of off the, you know, the business side, but what about folks that come into big money, like winning the lottery or something? How do you advise them as far as taxes are concerned? Do you recommend that they, you know, take the cash option or just let it ride or should they set it up in a, you know, a trust? You know, which is the best tax situation for someone that comes into that kind of money?
[00:21:08] Speaker B: Yeah. Well, the first thing I would tell them is don't sign the ticket.
Lock it up someplace securely and go find the financial advisor, financial planner and find an attorney and have this all settled before you sign that ticket and then cash it in.
That's number one. Because these financial professionals, they have all the tools that they need to run scenarios for how your wealth plays out over a period of time.
If it were me though, I would recommend take all the money now and then invest it instead of letting the government invest that money.
And they'll invest it more conservatively than you will probably. And so for the future of yourself, your family, you'll probably make more money in the long run on a 5 or 6% return on investment than maybe the government getting a 2% return on investment. I'm not a fan of letting the government hold on to the cash. Take the money now and invest it wisely. Don't spend it though. Invest it.
[00:22:08] Speaker A: Yeah, that's right. That's good. And now as a what about for non profit entities? I do have some nonprofit entities that come to me and you know, they want to know they, they think they should make a profit. And I'm saying you're not in that world, you're not really making a profit, but you do have to have, you know, revenue to sustain the organization. So what is your strategy with a nonprofit organization when it comes to taxes and cash flow and profitability and that kind of thing?
[00:22:44] Speaker B: Yeah, taxes for nonprofits, it's really a non issue unless you have products that you're selling to make a profit off of. And that, that would be an unrelated business income tax situation. But generally speaking, you know, non profits don't sell stuff. So don't worry about tax. However, I would say have a very good fundraising strategy in place and be aggressive with it and then watch the money. Just like any other business, you have to plan for it. You just cannot spend, you know, blindly and then, you know, get surprises at the end of the year, monthly bookkeeping just like any other business.
Control your costs and just because you're not paying taxes doesn't mean you have to be that you should be irresponsible with the funds, you know. So that's my, that's my take on the non profit world.
[00:23:37] Speaker A: Well, that sounds good to me because you know, I had one client came to me and she said we got a non profit and it wasn't technically a non profit. It was, wasn't a 501C3, anything like that. And I said non profit. Do you have, you know, all your information? She said, well, we're not making any money. That's making a non profit.
Good thought. That's not.
That was so cute.
[00:24:03] Speaker B: Nice try.
[00:24:05] Speaker A: Yeah. She said it's non profit. Like no, that doesn't make it a nonprofit. Just because you're not making money doesn't make it a nonprofit.
But now is there anything that you would like to add? We've got like a minute left and that, that you want to just talk about briefly before we go into break and we can talk about more on the other side.
[00:24:26] Speaker B: I, I can't stress enough that the, the, the, the recommendation to do some tax planning. If your tax preparer is not into the planning Side, which is fine because a lot of tax preparers, they just want to do the tax return, do the books, give it to you and be done with it. But if you're making money, I am begging you, talk to a tax planning professional to see if there's anything you can do to tamp down that tax. Because that tax, as we all know, if you watch the news nowadays, that tax money is going to the government coffers that gets spent in ways that it shouldn't be spent more very often versus going, you know, that money going, this tax savings going into bank pay for private school education, a new house, you know, a better retirement, a boat, whatever it is. So I can't tell you how many times I see people just acquiescing to the IRS and giving them a ton of money that could have been stayed in their bank account.
So I just beg people do the planning.
[00:25:26] Speaker A: Okay, well, tax strategy is not only about reducing taxes, it's about creating healthier decisions throughout the year. So when we come back, we're going to talk a little bit more about the systems behind the numbers, bookkeeping, accounting technology, and the financial routines that support lasting control. We'll be right back with more financial cures to help you heal your financial ills, become financially free. So stay tuned.
And we're back. I'm Dr. Wendy Labotte, the financial healer, and this is the Financial Cures on NOW Media Television. Let's continue your financial healing experience.
Welcome back to financial cures. I'm Dr. Wendy Labad and I'm here with Joe Reyes. And we have been discussing the financial diagnosis and proactive tax planning.
Now we're looking at the systems that either support financial health or keep business owners trapped in confusion. We're looking at bookkeeping, accounting, income and expense analysis reporting, and ongoing advisory support.
So we talked about being important to have your books in order.
So why do messy books or weak reporting create more than an accounting problem for a business owner?
[00:26:54] Speaker B: Yeah, it's so common in the business world that people see the accounting and bookkeeping people as an afterthought, as an expense that has to be done in order to meet compliance requirements. What people are not, oftentimes not seeing is that your books are, are your, are history of your business. It's like looking in the mirror. It's your business looking in the mirror, you know, and how do you look at your business if you don't have books? How do you, how do you really know what's happening? There's so many details and so many inputs and Outputs that go into preparing a set of books and getting the accounting done. And there are accounting rules in place, you know, for compliance reasons. And then there's, you know, just the flow of the business, just, you know, common sense flow of the business. How are we doing? Well, how do you know how you're doing if you don't have a set of books, you know. So my take on that is look at the accounting and bookkeeping systems.
The people you use, don't look at them as afterthoughts, as a necessary evil and administrative or clerical expense that we have to take part in and that we have to incur. My recommendation is look at it as a necessary data point.
Good bookkeeping. Good accounting is data and with that data you can make good decisions.
Without good books, you don't know if you're making the right decision or the wrong decision. And I might add, many a public company, major corporation has gone out of business because they went bankrupt.
Something went wrong, the, you know, numbers were wrong, whatever.
Things weren't priced right. So if it happens to major corporations, imagine what happens to a small business owner who is not watching the books and looking in the mirror, so to speak, and understanding what's going on with the business.
It's a huge issue. And I think that that has to be better appreciated than a lot of people would give it credit for.
[00:29:00] Speaker A: Now, what indicators trigger that there's a problem or potential problem when it comes to the finances of the company?
[00:29:14] Speaker B: Well, if you, if you wake up every day and look at your bank account, that's usually a good idea of we got what's going on here, you know, and then if your books are not done and if you're not tracking, you don't have the systems in place, you don't have an answer. Yeah, the money's running low, but maybe you're spending too much or maybe a major, you know, client is going to be paying their bill tomorrow.
How do you know? Right? You got to have accounts receivable tracking. Maybe you have not enough money in the bank and you have a bill that's outstanding, that's due tomorrow to a major vendor.
You have to have the systems in place so that you understand how the, how what the flow is of the business and make sure that you're not going off your gut, your gut is important if you're a business owner, of course, you know, but you need data and that data absolutely has to come from the, the book even accounting system and it has to be reviewed regularly.
That's just good advice that I've worked in small businesses and I've worked in major corporations. And the best run companies, they know what's going on with their money every single day.
[00:30:31] Speaker A: I know that's right. Okay. How has JL Reyes accounting and tax CPAs evolved from the traditional tax preparation firm into a broader advisory practice?
[00:30:45] Speaker B: Well, I started this business over 15 years ago. I've been a CPA for decades now, but I was in corporate America for a long portion of my time. And so I started as a tax prep business and I started advertising. I started doing, you know, bootstrapping the business and started doing tax returns. And then, you know, year one I got a few clients. The next year I got a bunch more. I started doing advertising and marketing. And the business owners were saying, hey, can you do my books also? So we're like, yeah, of course, let's do your books. And so we went from doing just tax prep to start doing bookkeeping and tax prep. And then over, over the years we were like, you know, we were looking at what's going on with, you know, taxes and, you know, looking at the vast amounts of money that sometimes people pay. And we started looking into, is there something we could do about that? So we started really looking into tax planning opportunities. And over the years, we've been chasing tax planning strategies and opportunities for many, many years now, looking for ways that we can save our clients money. And then the word gets out, you know, and then, you know, you save somebody hundreds of thousand dollars in taxes, they're going to tell somebody, you know, that, you know, might benefit from that. So yeah, so that, so that's what happened. And next, you know, we're doing all kinds of planning and advisory work. And it's very rewarding for the client. It's good for us because there's always new business coming in for referrals.
[00:32:14] Speaker A: That's great. That's an awesome story.
And it shows that you have experience at every level and that's so important. It's not that you just talking the talk, you have walked the walk so you know firsthand, you know how to do things, what needs to be done. And that's so important, especially when you're talking about folks money. So I agree. And I'm so had happy to hear that you guys have, you know, gone through that journey and you are where you are today. Now, what role does technology play in helping owners understand the business better and make their decisions? They say it's faster but more accurate decisions or more correct decisions. I don't know what Word I'm trying to think of, but just make decisions, inform decisions. I want to.
Yeah.
[00:33:02] Speaker B: Real time. Yeah. I mean I, first of all, I love technology. I wish I was in 68 years old. I wish I was 40 years old because I would be really going all in on AI and all the latest technologies that are out there. But, but nonetheless, I'm a 68 year old techie kind of guy. I love technology. And one thing I would say is, you know, look at QuickBooks Online.
It's based off the Internet, which has been around for decades now.
QuickBooks Online allows a business owner to log in and quickly look at the books. So if the business owner is providing the accounting firm or accounting team or bookkeeping team what it needs to get the job done every single month. And a lot of the data that goes into a bookkeeping system gets downloaded directly from a bank account. So much stuff is being automated and AI today is automating to nth degree a lot of the bookkeeping process.
So a business owner can get with an accounting firm and make sure that the books are closed. And then every day look at the books.
How do things look at least at the first and the second of the new month. How did last month look? And it's real time once the books are done. It's not like we have to get on a train or bus or drive to a client's office with paper and say, here's your report. I mean, it's all online dashboards, quick reviews and move on. And so it's, there's no really, no really good excuse for not being on top of the books every month. Technology has made it so that it's fast and it can be created and you have graphs, you can have data points that make it easier on the eyes to understand what's going on with the business.
It's an exciting time to be a business owner.
[00:34:48] Speaker A: That sounds good. You know, even for us folks old school that aren't as tech savvy as you, it does help and it does make life a lot simpler. So, you know, I feel you on that.
Now, do you have a specific based on your practice, do you have specific software that you recommend that people use? Or do you just take what they have and factor, you know, integrate it into what you have in your systems?
[00:35:21] Speaker B: Yeah, we're trying to get everybody out of the like. QuickBooks is a very popular bookkeeping product, you know, so a lot of people still use QuickBooks Desktop.
So we're trying to get people to move over to the QuickBooks online products. But even if you have desktop, there are ways that you can allow your accounting team to get to it through the Internet, right? So, so I would just say, you know, don't spend top dollar on an accounting software, bookkeeping software. You got, you know, many different smaller startup type bookkeeping companies, bookkeeping software companies that are out there. QuickBooks is one, you know, zero FreshBooks if you're a higher level Netsuite is a high level tax bookkeeping accounting program. And the bigger you get, of course, the more expensive it's going to become. But just a simple Internet search, you can find very inexpensive softwares that do the job, you know, and then as you grow and become more complex, then you want to move into a higher level product.
So be cost effective, be smart and go on the advice of your accountant. You know, we can guide you along the way.
[00:36:31] Speaker A: So we are seeing that a healthy financial system gives business owners visibility, rhythm and confidence.
It helps them see what is working and what's not working and what needs to be changed. After the break, we'll focus on long term financial wellness and the next step toward lasting control.
We'll see you on the other side. We'll be right back with more financial cures to help you heal your financial ills.
Become financially free. So stay tuned.
And we're back. I'm Dr. Wendy LaBotte, the financial healer and this is the Financial Cures on NOW Media Television. Let's continue your financial healing experience.
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So welcome back to the Financial Cures. Today Joe Reyes and I have been talking about some good stuff and how business owners can diagnose financial stress, plan proactively and build stronger systems. In this final segment we are connecting to those ideas to long term wealth, healthier decision making and financial free freedom.
So how should business owners think about building wealth through the business instead of only working harder inside the business?
[00:38:36] Speaker B: Yeah. So if you're a business owner, congratulations. You've taken on the most difficult job you're probably ever going to take on.
The the only thing is is that hopefully you don't want it to just be a job you Want your business to be what it is, what it really is, you may not realize it, it's a built, it's a wealth building tool.
So start a business, work hard in it, build it. But keep in mind that that business one day is going to be a very valuable asset for yourself. And if you think about it that way, you're always thinking five, 10 years into the future, maybe 20, at some point, you're going to want to sell it.
So build the business, build the wealth through the business. It's an asset, just like a house is an asset. It appreciates in value hopefully every year and treat it like what it is, a wealth building tool, not just an income producing tool. And there's a difference, right? Income is just what you need to get through the year, pay your bills. But Walter is, you know what, it's what's going to create a long term lifestyle for you, maybe in retirement, which is what a lot of business owners do.
A lot of people get into business that they want to build in and exit in five years and build something solid, build another thing and sell it. So it's a wealth building too and treated accordingly is my opinion. It's my recommendation.
[00:40:01] Speaker A: So what mindset shifts will help entrepreneurs not only start treating accounting as a burden, but start looking at it as a leadership tool and one that will help them, you know, create this wealth.
[00:40:18] Speaker B: Yeah, the accounting is absolutely critical. You look at any well run organization, they are properly funding their accounting teams. The chief financial officer of the corporation is a major player in almost every well run organization.
[00:40:35] Speaker A: So.
[00:40:35] Speaker B: And who supports the chief financial officer? Well, it's the accounting team for the most part. And so treat the accounting process with the respect and the seriousness that it deserves. Because that accounting for the business, it's not an after the fact thing, it's a steering wheel that should guide every decision that you're making.
So if you're doing it properly, you're doing every month. If the business is doing something wrong in January and you have the numbers in February, you can stop February for being a disaster.
So every strategic decision requires financials that make sense. And you're not basing your decisions on a gut feel because that gut feel you may be forgetting something, maybe you had an argument with your significant other and you're trying to make a decision and that's eating up with your thought process where whereas the books are telling you there's a flashing signal that's saying there's a problem here, we need to fix this. And the sooner you fix the problem of course, the more profitable your company will be.
[00:41:42] Speaker A: The one thing I find in.
When you're talking about money, whether it's your personal money, your business money, what would you say to a business owner who feels behind or embarrassed or unsure about what to say? How to begin. Because a lot of people, they don't want to be transparent, caring about their finances. So what do you tell your clients when they come to you to kind of make them feel more comfortable about?
Because they can say what they want to say, but the books are going to tell the real story.
So what do you say?
[00:42:18] Speaker B: Well, if, if you are. If as a business owner, if you are working with an accountant or some. A financial professional, that makes you feel uncomfortable with the, with truth and the reality of the situation, you might want to rethink the person you're dealing with.
You want to work with somebody that you're comfortable with, number one. Number two is welcome to the club. You know, you're in the majority. You're like everybody else. You know, you may be struggling and, you know, you talk to your accountant like you would talk to, you know, if your Catholic, a priest in the confessional, if you will lay out everything as it is and, and come to terms with the reality of the situation.
You want an accountant or a financial profession that's good with people, you know, so this way you feel comfortable talking to them about things that you're not going to share with anybody ever, and then get to it, you know, but if you, if you don't get to it, you know, you, you're driving into a ditch and there's nothing you can do about it because you're not seeing the ditch. So don't be embarrassed. Everybody goes into this stuff. I deal with this stuff all the time. You'd be surprised at how much I deal with. And I have a degree in theology, so I am very familiar with people's serious issues. And sometimes things are not as bad as you may think it is. And, but talk to us and get it out there and take action.
[00:43:40] Speaker A: That's for sure. And you have a degree in theology. No wonder you're so easy to talk to.
[00:43:45] Speaker B: Thank you.
[00:43:46] Speaker A: That's great.
Let the audience know how they can get in touch with you. They need your services. How can they reach out to.
To you and your firm?
[00:43:57] Speaker B: Oh, yeah. Raceaccounting.com it's got everything that you can use to get to us. Go on the Internet. Raiseaccounting.com R E Y E S accounting.com it's got all my contact information in there and tips and newsletters and information, all kinds of goodies in there.
Thank you.
[00:44:17] Speaker A: Sounds good. I mean, sounds like you demand, that's for sure. You know what you're talking about.
Now, how can business owners balance growth, tax strategy and personal financial wellness without losing sight of quality of life? So many people get caught up in the day to day operations of their business or the stress of whatever is going on in the business that they forget to, you know, fill their own cup and become, you know, just take a minute to regroup. So what do you, you know, how do you advise those folks or how can they, you know, fill up their own cup and, you know, take a break?
[00:44:56] Speaker B: Yeah. Well, what I was, I would say if you go into business, never haven't been in business, just be ready. It's gonna, it's gonna suck up a lot of your life. That's just the bottom line. It's almost like a baby, right? So it's just gonna, you have to pay attention to day. But you want to grow the business for a reason. You don't want to grow the business so you could be busier. You want to grow the business so you can become profitable and develop a lifestyle that the business is going to support.
There's a reason why you run into business. You know, sometimes it's, you know, you don't want somebody telling you what to do all the time. But good luck with that because in the business, your clients, your customers are telling you what to do. So but you, you want to, you want to develop the business to be part of a long term strategy to build wealth, financial security and, and just, you know, have an exit plan for the future. So it's, it's growth strategy, financial planning all put together. It's one big conversation, not separate little conversations because they all come together eventually and you got to be proactive about it. You got to be intentional and you can't be reactive. Because you're reactive, then your business is going to struggle, I promise you that.
[00:46:13] Speaker A: And you're going to struggle and stress for sure.
Now what one or two actions do you advise viewers to take this week to move toward greater clarity, control and financial freedom.
[00:46:30] Speaker B: If you haven't done it yet, look at your books. Every month, spend 30 minutes to look at your books for the last month and if possible, the last three months and look at the, what's trending in the books, profit and loss statement, which is an income statement, your balance sheet, your cash flow statement, and ask yourself, is there really profit in here.
If there's, if there is profit, how much am I going to pay in taxes and do. Am I saving enough to handle that? You don't want to wait till November, December to start looking at this stuff. So every minute, every month, 30 minutes, you know, and get with an accountant or your bookkeeper or whoever it is that's taking care of your books to talk about how it's looking. Just do it. It doesn't have to be a big drawn out, you know, hours, long meeting. It can be done in a matter of 15 to 30 minutes a month just to see where we stand. Then things will start. That's. If you develop that habit. It'll pay dividends. That's the one thing I would recommend.
[00:47:28] Speaker A: Okay, that sounds like great advice.
So, Joseph, thank you for joining us on the Financial Cures and helping us simplify the complex tax and financial concepts into practical steps business owners can use to strengthen their financial lives. To everyone, watching financial challenges do not have to define your future. When you diagnose the real issue, you can build systems that can help make those decisions easier.
And you can move from stress into strategy, from confusion to control.
I'm Dr. Wendy Labotte, the financial healer, and thank you for watching the Financial Cures on NOW Media tv.
Remember, when you think right, speak right, and do right, things will flow right to optimize your financial health. We'll see you next time.
