Juliebeth Malone
Remove the Unknown by Going from Cash to Accrual
Businesses are upgrading their accounting methods, switching from cash to accrual accounting. This change can be challenging, but there are several reasons to make the switch. Growth Amplifiers spoke with Julie Beth Malone of JB Advisory Group, LLC to discover how to remove the unknown by going from cash to accrual accounting.
JB Advisory Group, LLC has helped business owners for over a decade with Malone at the helm. As a QuickBooks Pro Advisor Elite, she leads a team of eight accounting professionals assisting businesses to launch QuickBooks for accurate financials to run their businesses. With the team’s help, they can generate wealth for themselves and their business and attain peace of mind and balance. They have a client-first approach, seeking to implement innovative growth strategies for clients and helping them achieve work-life balance.
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Interview Summary
Remove the Unknown by Going from Cash to Accrual
Businesses are upgrading their accounting methods, switching from cash to accrual accounting. This change can be challenging, but there are several reasons to make the switch. Growth Amplifiers spoke with Julie Beth Malone of JB Advisory Group, LLC to discover how to remove the unknown by going from cash to accrual accounting.
JB Advisory Group, LLC has helped business owners for over a decade with Malone at the helm. As a QuickBooks Pro Advisor Elite, she leads a team of eight accounting professionals assisting businesses to launch QuickBooks for accurate financials to run their businesses. With the team’s help, they can generate wealth for themselves and their business and attain peace of mind and balance. They have a client-first approach, seeking to implement innovative growth strategies for clients and helping them achieve work-life balance.
The Difference Between Cash and Accrual Accounting
In cash-based accounting, businesses record revenue and expenses when cash is exchanged. It can be easier to learn and use for small businesses. It also shows the money you have on hand at the moment.
But it also has disadvantages; most importantly, it doesn’t offer a clear, up-to-the-minute financial picture. It doesn’t account for liabilities, so you may not know what is available to spend. It doesn’t show future debts your customers may have, leading you to forget to collect them.
In accrual accounting, revenue and expenses are recorded when incurred, no matter when cash changes hands. With accrual accounting, you can better analyze your business and plan for the future. But some business owners shy away from accrual accounting as it does have a higher learning curve.
That’s where professionals like the team at JB Advisory Group, LLC come in. They can take away the mystery and help you successfully apply accrual accounting to your business.
The Challenges
Malone sees some of the same challenges across industries and businesses. In the professional services industry, their cash businesses create swings when income hits their books and expense have been budgeted over a few months. Then suddenly, clients pay a hefty invoice, and that work isn’t done immediately.
So, income swells for a month, and the following months show huge losses. When this happens, you can’t tell what’s happening in the business. You cannot predict what is coming or make intelligent decisions because you don’t have accurate data.
This is when you know it’s time to switch to accrual accounting, where revenue is recognized when earned throughout contracts. Then business owners get an accurate picture of what’s happening in their business year to year, helping them plan cash flow, budget for staffing, and make crucial decisions.
Real-World Example
JB Advisory Group, LLC began working with a client who hadn’t kept up with their books. They also subscribed to cash-based accounting. Income was unpredictable as they would get cash upfront. So, Malone’s team created a shared spreadsheet and spread client contract terms to manage the income over time better.
They could then make just one journal entry in the books and see their revenue. The clients were taught to do deferred revenue and expenses correctly. They were eventually able to open new businesses offshore after they were able to predict their income and earning potential.
The Benefits of Switching to Accrual Accounting
With accrual accounting, you have a better understanding of your numbers from one month to the next. This is the best method for businesses with significant expenses or revenues over time.
Get in Touch with JB Advisory Group, LLC
For a better understanding of your finances and to get a clearer picture of your numbers, the accrual accounting method is for you. You will report income and expenses as earned, with both lining up in the same period.
To make the switch, contact JB Advisory Group, LLC today! The team works to provide complete, accurate, and well-documented financial reports. They also specialize in QuickBooks setups for new companies and training them to maximize the program.
Their clients include professional services like realtors, photographers, lawyers, and e-commerce businesses. Now that QuickBooks Desktop is leaving the market, they are also helping companies transition to the online version. They are the pros to call on, from bookkeeping to payroll and custom growth strategies.
JB Advisory Group offers small business accounting and bookkeeping services, payroll solutions, CFO services, financing assistance, business advisory services, financial planning services, and internal control systems reviews. Get started with your complimentary consultation with an advisor today, or give them a call at 720-798-4441! They have the solution to help you spend more time serving your clients and less time stressing over the financial aspects of your business. In one call, you can discover how to lower stress, save time and money, and get a solid financial team on your side.
For more helpful information and to connect with other professionals to help you grow your business, don’t miss the growthamplifiers.com podcast. You’ll hear from top B2B advisors with their insights and tips for business growth.