Timely Financials-1

Welcome to


The Learning Center

One of our core values is empowerment through education - it means a lot to us.

The Learning Center was made as a resource for business owners and inquisitive individuals who want to learn more about the current world of taxes and accounting.  If that sounds like you, you're in the right place.

Reach out if you have any questions.  Thanks!

Sheila Malavet

Sheila Malavet

Sheila loves to empower our clients and team members by building our infrastructure and mentoring new team members on the importance of our core values. When not having fun at The Heroes Group she is spending time with her adorable daughter, Aleigh’ana.

Recent posts by Sheila Malavet

2 min read

Keeping your tax and expenses in check when you are self-employed

By Sheila Malavet on May 05, 2020

Contracting or freelancing requires you to wear a lot of hats. Relationship-building, keeping track of your time, marketing your skills and actually doing the work. But one of your priorities should also be establishing how you handle your money and setting the groundwork for good habits.

Topics: Accounting Cash Flow Running Your Business
1 min read

The value of real-time management reporting

By Sheila Malavet on Apr 28, 2020

Improving your financial efficiency requires a clear overview of your key numbers, so you can track your performance and drive improvements.

Topics: Accounting Cash Flow Running Your Business
2 min read

Keeping debt low through proactive credit control

By Sheila Malavet on Apr 07, 2020

Having a large amount of debt in your business is bad for cashflow, weakens your overall financial health and brings down your credit score as a business.

Topics: Accounting Cash Flow Running Your Business
2 min read

Taking the pain out of pricing - how much should you charge?

By Sheila Malavet on Mar 31, 2020

Figuring out how much to charge is a big learning curve for any business owner. The answer to how to approach it will fluctuate as circumstances and markets change. It is important to revisit the question throughout the lifecycle of your business.

There is no magic formula

All businesses are unique, with an individual offering of products and services. Before you set your pricing, It’s important to look at the whole picture. This will help to ensure you are being strategic and not just following trends.

Gather the data

To get started, you need to gather as much information as possible. Block out some time to sit down with your business data and strategies. Pricing is essentially figuring out where your products and services are positioned in the market. So keep your business strategies top of mind. It doesn’t have to be a confusing exercise. Just grab a coffee get started.

Here are the first steps to consider:

  1. Record all the costs involved in production. Make sure you include indirect costs, such as assets, insurances, licenses and legal costs.
  2. Now that you have your outlay, consider your current profit margin or what margin you require. Remember there is a difference between net and gross profit margins. Net margins take all operating costs into account.
  3. Do your competitor research. Be thorough in understanding the market and what others are charging for the same service or product or variations of this. What unique selling points (USPs) does your business have that allow you to vary your prices?
  4. Think about your offerings. What extra benefits or offerings do you have that can affect your pricing? Think about cheap and no-frills on one end of the spectrum, versus high-end premium products. Can you create different products at different prices to cater to different segments of the market?

Don’t forget to check in on your pricing regularly to make sure you’re keeping up with your customers and staying ahead of the game.

Have a question?

We'd love to hear from you!  Feel free to contact us or reach out to your THG team member today!

Topics: Running Your Business
2 min read

Price Elasticity of Demand

By Sheila Malavet on Feb 25, 2020

Price elasticity is an economic concept that you should get to know. It is instrumental in understanding demand for your product and the price you can set for it.

Topics: Running Your Business
2 min read

Keeping on top of overdue accounts

By Sheila Malavet on Feb 04, 2020

How long do your customers take to pay you?

A Xero Small Business Insights report showed that late payments to small businesses are improving. But overall, payments often still arrive after due date.

Topics: Accounting Running Your Business
2 min read

Funding your business – equity or debt?

By Sheila Malavet on Jan 28, 2020

When you're looking to expand and grow your business, you'll almost certainly need extra finance to achieve this. But what’s the best funding route for your company?

Topics: Accounting Running Your Business
2 min read

Choosing a new business bank account?

By Sheila Malavet on Jan 23, 2020

A business bank account is an essential requirement for any business. But with so many banking providers out there, how do you know which business account to choose?

Topics: Accounting Cash Flow Running Your Business
2 min read

Understanding Your Profit and Loss Statement

By Sheila Malavet on Jan 21, 2020

Your profit and loss statement (P&L) helps you understand your business performance and profitability over time. It’s sometimes called an Income statement and its main purpose is to list income and expenditure.

Whereas a balance sheet is a snapshot in time, the P&L shows transactions over a specific period of time. This can be a month, quarter, financial year or any other period, and it can be a stand-alone report or a comparative period report.

Together with the balance sheet, these two reports provide a comprehensive understanding of the financial position and performance of a business.

The profit and loss statement has two main sections: income and expenses.

These may be further subdivided depending on the complexity of the business and reporting requirements.

Income or Revenue

Income primarily includes main business activities such as sale of goods or services. Other income such as interest received, capital gains or income from secondary business activities is also reported.


Expenses

Expenses are usually divided into two sections: direct costs, or cost of goods sold, and expenses. Cost of goods are those that are directly linked to the provision of services or sale of goods. For example, if you buy widgets from a wholesaler and sell them at a marked-up value, the cost of the widgets is a direct cost, not an overhead expense.

Other types of direct costs might be importing and freight costs, contractor costs or certain equipment. Some direct costs are fixed, that is, they are the same from month to month, or they could be a fixed percentage of sales; others vary in value but are still related to the income producing activities.

Overhead expenses are all the other expenses required to run the business, regardless of the level of income: for example, rent, utilities, bank fees, bookkeeping fees, professional development costs, vehicle costs and staff costs. Many of these costs form the basis of working out your break-even point, or how much it costs just to open the doors for business.

There are some expenses which may be reported as a direct cost in one business but an indirect cost in another type of business, for example, merchant fees or contractor costs.


The Bottom Line

Total income minus total expenses results in the net profit (or loss), is often called ‘the bottom line’. Often business owners are just interested in looking at the bottom line, but a true financial picture requires an understanding of several reports and an ability to see the big picture that the reports are illustrating.

The P&L is a vital tool to analyze for trends over time.

  • What does your P&L tell you about relationships and ratios between sales and expenses, seasonal changes and annual trends?
  • Have all your direct costs been allocated correctly?
  • Have you recouped all billable expenses from customers?
 
Financial statements help you understand the big picture for your business. With deeper understanding of your business operations and performance you can make informed decisions about your business finances.
 

Have a question?

We'd love to hear from you!  Feel free to contact us or reach out to your THG team member today!

Topics: Accounting Running Your Business