In this episode of the Small Business Matters podcast, we dive into setting up effective accounting systems for new entrepreneurs. Cassie Saquing, a money mindset and business management coach with a successful background in launching a seven-figure daycare business, shares her wisdom on financial strategies to enhance business growth. The episode provides a comprehensive look into practical accounting methods, the importance of maintaining separate personal and business finances, the utilization of accounting software, and the significance of cash reserves, among other topics.
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Highlights:
- 00:55 Cash vs. Accrual Accounting Methods
- 03:19 Maintaining Separate Bank Accounts
- 04:30 Tracking Expenses with Credit Cards
- 06:05 Benefits of Separating Personal and Business Banking
- 09:00 Choosing the Right Accounting Software
- 10:24 Financial Reports and Bookkeeping
- 13:10 Setting Up Cash Reserves
- 15:19 Key Lessons Learned During Pandemic
- 17:36 Taking Care of Your Team
- 18:25 Tax Preparation and Reports
- 20:55 Supporting Hands-On Business Owners
- 22:52 Final Advice
- 24:17 Closing Thank You and Contact Information
Key Takeaways:
Choosing the Right Accounting Method: It is crucial to understand the difference between cash-based and accrual-based accounting. Cash-based accounting is simpler and suitable for service-based small businesses, while accrual-based accounting is recommended for product-based businesses with significant upfront expenses.
Maintaining Separate Bank Accounts: Separating personal and business finances is essential for clear financial tracking and protecting personal assets against legal actions. This separation facilitates easier tax preparation and enhances financial management.
Utilizing Accounting Software: QuickBooks is recommended for its intuitiveness and wide acceptance among accountants. Using software from the start of your business can save time and avoid complications when tracking financial transactions.
Weekly Bookkeeping Practices: Keeping a weekly update on financial transactions and regularly reviewing profit and loss statements can provide insights into the business’s financial health, allowing for timely adjustments in business operations.
Importance of Cash Reserves: Setting aside a percentage of every dollar earned into cash reserves can provide a safety net during financial downturns, as seen during the pandemic. Proactive saving is a behavior that ensures business continuity in challenging times.
This episode emphasizes the importance of sound financial management and accounting practices for small business owners. It particularly highlights the need for proper bookkeeping, the use of appropriate accounting software, and the benefits of maintaining cash reserves. Cassie’s approachable advice encourages entrepreneurs to tackle their financial management with confidence and strategic planning.
The following interview transcript was edited for clarity using AI.
Gary Stockton: Cassie Saquing is a money mindset and business management coach. She helps business owners kill the hustle and make a profit. As a soul-centered financial and money mindset coach, she’s also a dedicated wife and mother to four children. In her early days, she applied her skills and education by launching a successful seven-figure daycare business. Now, she teaches other women to scale their mindset and their income. Cassie, welcome to the Small Business Matters podcast.
Gary Stockton: Millions of new businesses are launching around the country. Many of these businesses are being run by new entrepreneurs, people who might need to become more familiar with the accounting side of a business. So we thought it would be a great opportunity to talk with Cassie Saquing about setting your accounting systems up for success.
Cassie Saquing: Hi Gary. So nice to be here. Thank you for having me.
Gary Stockton: Let’s talk a little bit about the foundation side of setting up a business. There are a number of steps to doing that, but a foundational step in any business is figuring out how to track revenue. Can you talk for a little bit about the difference between cash-based and accrual-based accounting methods and why it’s important to pick the right one? Perhaps include a few examples of businesses that use each method.
Cassie Saquing: Sure. Absolutely. And to put a little disclaimer in here, I am not an accountant, but I can explain the basics. And I think that should give us all hope, especially if you’re starting a new small business; you don’t have to have certain degrees. You just have to have the right kind of knowledge. And I love that we’re talking about that today to better support you in starting or growing your business.
So, cash-basis accounting is really the most straightforward way. You only record something like income when it’s actually received into your bank account. We use this in small businesses. A lot of times, service-based businesses do very well with cash-basis accounting. In accrual accounting, money is accounted for before it’s received.
Maybe there’s a 30-day deadline to pay it. It’s an aging kind of receipt. But in accrual accounting, you process it as though it’s already received. You may not have it in hand yet. So, the same thing applies to expenses for accrual: You record them before they’re actually paid out. And the reason is that. You may have. I recommend this for product-based businesses that have to purchase a lot of things ahead of time. In terms of inventory tracking, the accrual method is really great for that because you have all these upfront expenses, but then it might show over a long-term revenue projection.
So, I know if you’re also going to get ready to sell your business, accrual is a great way to show a potential interested buyer that there’s a long-term strategy for future income coming in. They can show it right away so that it’s not just so up and down. Cash accounting tends to be a bit of a pendulum because you’re waiting for that money to come in. So, it becomes very important to have your revenue on point and follow up methods to get all the revenue you can before the month’s end.
Gary Stockton: At Experian, we emphasize the importance of maintaining separate bank accounts for business and personal use. The commingling of funds can spell trouble.
Why is it such a taboo for a business to do it? And why is a dedicated bank account so important?
Cassie Saquing: That’s such a good question because I think a lot of it is we have these feelings around the taboo, right? Oh, this is not a good thing. But why do we think it is not a good thing? Is it just because, on the most basic of levels, it’s just hard to track and sort through at tax time? That’s definitely a big piece of it. But, You know, you want to keep your funds inside your LLC or business. Maybe it’s an S Corp. It really protects your assets like your personal assets in case of any legal actions against your company.
So, really, it’s the idea that if you’re having a hard time, like separating, it’s not a big deal. I’ll just sort through it later. I just want to encourage you to make sure that you want to protect your own personal assets that way. That’s really the biggest reason that might motivate any business owner to keep their personal funds separate from their business funds as well.
Gary Stockton: Yeah, and that includes tracking all of your receipts and filing them in the right place. That’s actually an easy area where you can slip up, right? Would you recommend separate credit cards to go with the banks?
Cassie Saquing: Absolutely. I’m probably a little bit too account-happy when it comes to my business accounts. I have different accounts for a lot of different reasons. I use them like buckets, and it’s just because, by human nature, I’d rather just see what I actually have for these particular purposes. But I do recommend having a credit card because obviously there’s an easier way to protect yourself in case there’s fraud. It’s not just taking it out of your bank account; it’s your actual cash flow. I practice having a no-debt business. So I pay off the credit cards every week. So it’s flexible. And obviously, when you’re tracking those, you track them according to QuickBooks standards and account for everything properly.
Ultimately, it doesn’t matter what bank account you use. That’s more just for cash flow purposes. But you just want to make it easy on yourself, right? How can I make it easier for myself as a business owner? I even do so that I don’t mix them up in my wallet. I write, take my credit card and write like business across with a, Sharpie because we’re distracted. I like to pull it out. I’m like, Oh, that’s not my business card. Okay. Sometimes, we must do these silly things to help ourselves stay in line for tax time.
Gary Stockton: From a business credit standpoint, the advantages are pretty obvious, but they may not be so apparent to the new entrepreneur. If you can start showing a history of paying the credit card bill, paying that business credit card under the name of the business, this triggers to the bureau that there’s history going on and there’s a business. That’s functioning there. It does take a little while for that personal credit transition to happen, where you can rely solely on the business’s credit. But in the early days, if you can at least establish that separation, it’s a good idea. Now, let’s talk a little bit about tracking and systems, right? So there are a lot of accounting programs out there. What should a business owner or entrepreneur know about choosing the right accounting package? Does the business owner need to know all about accounting software to pick the right one? How do you make the right choice?
Cassie Saquing: Yes, that’s so important. Like I said, you want to make it easy on yourself and find intuitive software that you can follow along with. I recommend QuickBooks.
They do have a very low entry level. Let’s say your sole proprietor is starting. They have a very low threshold, like a monthly fee for that. But it’s super helpful because most of you. Accountants will use that as the gold standard. They’ll use QuickBooks, and you can easily share it with them. They have access to update it without you having to print out massive files or tons of statements. Luckily, everything is so electronic now that you can just upload all the information, the bank statements, to them as needed.
But I do recommend QuickBooks. There are also other softwares out there that may be free, but the whole point of them is to track what you’re doing and the activity of the business so that you’re always on top of what’s happening in your business and not waiting until months end to go back and check.
The best way is to get the right software. We all need software for our businesses, even for simple things like emails, QuickBooks, or any other type of tracking software for your business finances. It’s just highly recommended from the get-go.
Just start. I’ve gone into other people’s businesses, and we’ve tried to go back in time and update everything. It just takes a lot more time and sorting, and it’s not likely you’ll remember what happened in the business a whole year ago or two or three, so just start right away. Even if it’s super simple and you need to get help with that, it’s just really important to do
Gary Stockton: I’m sure they must offer training on that. I am not sure. I’m a marketing guy, right? So, I’m unsure I would know exactly how to set up a QuickBooks file for my business. Is it complicated?
Cassie Saquing: It isn’t. I’ve used QuickBooks for almost 20 years now. Way back in the old days, when it was just on the desktop, it was like, I’m dating myself here. But now everything is fine. I recommend the online version. And they have, in the past couple of years, actually really improved the software and its usability.
So they’ll even preset these generalized ones for you. It’s, you know, types of accounts and classifications that you can choose from. And as I said, I recommend using an accountant who could help support you. And depending on the complication or how complex your business might be. Depending on whether it’s cash or accrual, these things do take some time. There are so many support YouTube videos that I wouldn’t even recommend which one. You can go online and just watch the basics. It takes time initially, but like anything, it’s worth it because you save yourself so much hassle at tax time and know your business profitability is so important.
Gary Stockton: How can business owners keep a good pulse on their business’s health? How can good bookkeeping aid them? Are there core reports the owner should be familiar with? Can you explain the essential reports?
Cassie Saquing: Yeah. So I think the main thing that people need to remember is to stay on top of tracking and keeping up with their bookkeeping, whether that’s paying someone to do it or not.
There are a lot of people who do it remotely now, which is great. Or, you can do it yourself. I would recommend doing it weekly at the longest. I tend to do it probably every few days to update the books and make sure that there’s no fraud going on or money that I’m surprised about or anything like that.
But basically, tracking every dollar every week will help. Just don’t wait till the end of the month when it’s a history report and you’re looking back like, Oh no, what happened three weeks ago? Because what will happen is that as you’re tracking live, you’ll be able to change the behavior in your business, right?
You’ll make slightly different decisions. Part of the tracking process that I recommend is running a P&L, which is a profit and loss statement. It’s all the revenue that comes in based on category. Then, all the expenses that go out are based on category. So, as you’re tracking, you’ll see what’s coming in and out, and you’ll be able to ensure that those things are correct. Do you want to spend that money based on the revenue of that week? Some people are a little bit low-margin type of businesses, and that’s fine, but you have to make sure that you’re really on top of that. Then, make those business behavior changes based on your projection for the following week or the next four weeks.
And, many times, we think we’re just, we have to go with the wind and whatever is happening to us. And we’re a little bit like, ah, I don’t know how to make more revenue, but really we have so much more control than we realize. And part of that is this process of doing the weekly PNL and then, of course, monthly, and then just making sure that you look at your balance sheet, making sure that your debts, all these things are adding up and making sense to you.
Based on what you know is happening in your business. And that’s the way to keep a good pulse on it. The numbers don’t lie. And business owners who are really good at not just making a profit or making more revenue. And we always think that we will make more money, But, on the other end, how are you tracking those expenses? It is a great way to catch the money without going out the back door. I always say you can make a million dollars, but if you spend a million and one, it’s not a good business. It’s not working for you. So I think that’s really a great way to catch the money without going out the back door. You can make a million dollars, but if you spend a million and one, it’s not a good business. It’s not working for you. So I think that’s really a great way to keep on top of it weekly and know what’s going on in your business.
Gary Stockton: When the pandemic hit before any relief was announced, many small businesses had to stay afloat by dipping into reserves. Can you talk about what? Cash reserves are how they are set up in the accounting system and why they’re so important.
Cassie Saquing: You know what? I always emphasize, and obviously, it’s going to show up in your accounting system because you’re tracking all your revenue. How I do it is because I focus a lot on cash flow, and cash flow is the lifeblood of any business, right? It’s very important to know that you have enough money to make it to the next level, whether through payday or revenue or deposits. So I do, really. Obviously, everything will be tracked through your QuickBooks and your accounting system, but I always recommend putting aside a top-line percentage from the top-line revenue. For every dollar that comes into your business, set aside three to five percent. Even if you feel like you can’t do that yet, start with 1 percent and then try to build it up from there because it’s a behavior switch. So start by putting away money. And I know prior to the pandemic, we all thought, eh, we’ll put some away.
It was a little bit more here and there if there were windfalls. But now, I know my business partner and I are very purposeful in how much we put away simply because we did have to use a lot of our reserve money. And it did help us. I know a lot of businesses in our area shut down and didn’t reopen. And I’m grateful for that, honestly. But I am being proactive and not just waiting until what’s my profit margin, what’s my, what’s leftover? That’s, you’ll never save that way. And I think that’s. It is so important to start from the top and set it aside. And that’s where I get a little crazy with all my accounts, moving money constantly.
I do that on a weekly basis so that we make sure that every dollar is split up into different ways proactively. So I’m definitely into habits and behaviors and making things easy. And then, of course, it’s all tracked in QuickBooks so that you can see on your balance sheet how much you have saved aside.
Gary Stockton: It’s interesting. It’s How that has changed how you look, and your particular industry category, daycare centers they closed, and it was really hard on that particular industry. Are there any other learnings from that you took that you’re applying in your business today?
Cassie Saquing: The biggest learning is my personal growth and humility level, right? I was like, Oh, I got this, and I know how to run a business, and we’re coming up on our 20th year in 2025. So it’s exciting, right? That’s a long-term business. I’m really proud of that, but how I show up and treat other people, how I manage the team, I’m much more appreciative, and what that shows, it comes out in how we give bonuses to our team members, and that’s part of how we manage the profits as well. We share it and look at our team, not that we didn’t before, but I feel so much more like my heart has changed in a lot of good ways that I just see them as wow, if we didn’t have these people, we just wouldn’t have a business.
And we just, I don’t know, we love our team so much, and I’m so grateful. And I can’t show enough. Gratitude to them. I actively look for ways to show that and can do that because of this practice of weekly updating, weekly transferring of funds, and automating some of those behaviors so that I don’t have to be worried about cash flow all the time. I don’t have to be scrambling, for, oh my gosh, how are we going to make it? It’s just like money. It’s on our minds, but it’s not. Because of behavior changes, we can focus on the team better and grow it, investing in the team and getting them the right training and the resources they need. So I know that’s not exactly about money, but it is because money, where we put our money, shows where our hearts are. And I think it’s important to invest in the team as well,
Gary Stockton: Right. And I think you’re investing in the longevity of your business at the end of the day because if you have a happy team. I heard Richard Branson say something very profound once when he said, “if you take care of your team, your team will take care of your customers, and that will take care of everything else.” You will have a successful business if you get that with your team. And you say that your anniversary is the 20th anniversary next year? You’re doing something right there. A lot of businesses don’t make it beyond two years, Congratulations!
Cassie Saquing: it. Thank you. I can’t believe it’s going to be 20 years.I’m still in shock, but I’m just really grateful.
Gary Stockton: as we record this interview, it’s tax time in the US. What are the reports they will make for a stress-free tax filing for a business owner?
Cassie Saquing: I think a lot of it has to do with not just reports. Like we talked about the P&L. That’s super important. I do recommend at tax time to run an annual P&L looking back over 2023 or whatever year this is that you’re looking back from the prior year and doing a month-over-month report so that you’re looking at each month in a column and then doing the full annual report. Upload the summary for your accountant and give them access to your books.
And so those are the basic, foundational. You’re definitely running a P&L and then sending them the balance sheet also from the prior year. But beyond that, organizing yourself and your receipts—I know Gary, you mentioned the receipts before and scanning them all in, organizing them by month. I know it seems like a hassle, but I promise you if you ever get audited, it’ll just be like, Oh, here, click on this Google folder. It’s from this year, these years, organize yourself, do a whole year, and then do subfolders by month. That’s what we do. And making sure that those don’t get lost because floods can happen, your paperwork can go missing, making sure to make everything into a digital version of that so that it’s Super easy to find and pull up, especially, and then we, share those and upload those to, our accountant as well as needed.
So I think you should make sure you’re on the right court reports, but then also track and scan all your receipts, just making things easy. For your accountant to be able to sort through those things will help in looking for as many tax deductions as you can within legal limits; of course, in those boundaries, you want to stay in integrity, making sure that you’re taking advantage of those. Do you know anything like 401k or anything else you can do To support your team or yourself as a business owner? It’s just super important to get as many tax deductions as possible, too
Gary Stockton: Yeah, have a good office scanner. Have one that’s easy to use; you just drop it in and have it appear in a folder so you can catalog it.
Cassie Saquing: You could also get a free app —I think it’s a Cam Scanner—that you can use with your phone.
Gary Stockton: My dad always told me, Son, always play to your strengths. Have you met business owners who are hands-on in running their business but not interested in the accounting side? And how do you work with these kinds of entrepreneurs?
Cassie Saquing: You know what? I feel that way because many business owners are doing their passion right there. They’re expressing their creativity through their business. Maybe they’re creating a service package, or maybe your coach or you have a product-based business you’ve always dreamed of. And it just gets very overwhelming very quickly. I do recommend that if you’re not able to take the time or have the desire at all, I do recommend hiring a bookkeeper, someone who can keep track of your books, making sure that you’re doing it properly so you don’t have to go back over the years and redo everythin
And then hire an accountant, of course, but I think many people get stuck. Gary with cash flow because you can do everything right with your accounting. You can ensure that all the percentages add up to a hundred percent, but how do you pay for things at the right time?
How do you have enough for payroll to pay your employees, either payroll or contractors in your business? I think a lot of times, cash flow is really the sticking point for most business owners. That’s what I love to do: help people get more cash flow in their businesses and find money in their businesses.
If you’ve been operating for more than a year, you probably think it’s time to do a cleanup, find more money, and make some decisions for yourself. I recommend doing that every quarter. But that’s what I love to help with. I know how to do bookkeeping, but I also want to know how to change our behavior around keeping more cash flow in our business. It’s just super important.
Gary Stockton: It’s all about cash flow. Do you have any final advice for business owners who might feel a little overwhelmed or unprepared for entrepreneurship?
Cassie Saquing: This is more of an inspirational moment for me because I do not have an MBA. I am a mom of four. I have my education degree. I am not an accountant, but I love what I do, and I found ways to do it. Although it probably took me longer in some cases, I probably should have reached out for help sooner. But I learned, grew, and changed my mindset. If I can do it, I feel like anyone can do it. Don’t get discouraged.
There’s so much help out there, and there are a lot of resources for people. And just realized that if you have that passion to start your business, if you’re really focused on it and you’re excited about it, you can always find a way to make it work. You can always find that way. If you get overwhelmed, take a break, take a breath, restart tomorrow, and give yourself grace, but keep going forward. And that’s true. I’m not the smartest person in the room, but I’m just the person who just refuses to give up. I’m like, okay, start over. Like, the more resiliency you can build, the longer you’ll stay in business for sure.
Gary Stockton: Cassie, this has been super helpful. Where can our listeners find out more about you?
Cassie Saquing: I always tell everyone to find me on Instagram. I’m actually at ProfitPassionAcademy on Instagram, and all my information is there. There are links there, and you can find a little bit more about me and how to make more money in your business. I have a lot of free offers in there for people. So I would love to help you do that to stay afloat and keep your business going. It’s my passion to help people in business.
Gary Stockton: It’s been a pleasure speaking with you. Thank you for coming to Small Business Matters.
