QuickBooks Mastery for Small Business Success

Erica Northrup & Lee Davis
  • 4.6 (9)
  • Entrepreneurship

Running a business is hard. QuickBooks shouldn’t make it harder. Welcome to QuickBooks Mastery for Small Business Success—the podcast for growth-minded small business owners who are ready to stop drowning in financial confusion and start making confident, data-driven decisions. Hosted by Lee Davis & Erica Northrup, the father-daughter duo behind Lee Davis & Company, each episode delivers practical advice, proven systems, and real-world strategies to help you clean up your QuickBooks, simplify your bookkeeping, and grow your business with clarity. Whether you’re stuck in a bookkeeping mess, unsure how to read your reports, or ready to finally outsource your financial chaos, this show gives you the tools and insight to move from overwhelm to control—one episode at a time. Because your time should be spent on your craft and building your business—not buried in spreadsheets and reconciliations. ⸻ Perfect for: • Service-based small businesses • Business owners making $750K–$2.5M annually • Entrepreneurs tired of trying to “figure out” QuickBooks on their own • Leaders who want to spend less time managing their books and more time growing Subscribe today and take the guesswork out of your numbers.

  1. 1d ago

    Episode 47: How Much Can You Pay Yourself? What Your Business Can Actually Afford

    Episode 47: How Much Can You Pay Yourself? What Your Business Can Actually AffordYour business is making money. Your bank account looks healthy. But how much of that money can you actually afford to pay yourself? In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis tackle one of the most personal financial decisions small business owners face: how to pay yourself consistently without putting your business in a difficult position. Building on Episodes 45 and 46, we connect the dots between profit, cash flow, and owner compensation. Lee explains why money in the bank may already be committed to payroll, taxes, vendor bills, and other obligations—and why one strong month shouldn’t automatically mean a bigger owner payment. We also work through a practical example: a business with $40,000 in the bank that has only $5,000 remaining to consider for owner pay after accounting for upcoming obligations and a cash reserve. Even then, that money isn’t automatically safe to withdraw. Along the way, we discuss seasonal income, the importance of protecting and rebuilding reserves, and why deciding what you can afford is different from deciding how to record the payment in QuickBooks. In This Episode, You’ll LearnWhy profit, bank balance, and available owner pay are different numbers.What to account for before paying yourself, including payroll, taxes, vendor bills, and loan payments.How a simple cash forecast helps you look ahead instead of reacting to today’s bank balance.Why seasonal businesses need reserves and a more consistent approach to owner compensation.How owner’s draws, payroll, and distributions differ depending on business structure and tax treatment.How to build a repeatable owner-pay process and review it regularly. Episode Chapters00:00 – How Much Can You Actually Pay Yourself? 04:18 – Why Profit Doesn’t Mean Available Cash 09:09 – What to Consider Before Paying Yourself 13:27 – The $40,000 Bank Balance Example 18:20 – Cash Reserves and Seasonal Income 25:38 – Owner’s Draws, LLCs, and Corporations 31:21 – Building a Sustainable Owner-Pay Process 35:45 – Why Business Owners Deserve to Get Paid 36:49 – Your Action Step and Free Owner Pay Worksheet Free Download: Owner Pay Planning WorksheetTake what you’ve learned and apply it to your own business with our free Owner Pay Planning Worksheet. Work through your available cash, upcoming expenses, tax obligations, and the reserves your business needs to maintain. Use the worksheet to start a more deliberate conversation about what you can realistically afford to pay yourself. Download the Free Owner Pay Planning Worksheet Your Action Step This WeekBefore your next owner payment, sit down with your numbers. Look at what’s in the bank, what you reasonably expect to collect, what payments are coming up, and what your business needs to keep in reserve. Then ask yourself: Is my current owner-pay process actually working—for both me and my business? The goal isn’t to take whatever happens to be left over or withdraw money whenever the balance looks healthy. It’s to establish a sustainable process that helps your business meet its obligations while supporting you, too. Continue the ConversationThis episode brings together the lessons from our previous two conversations: Episode 45: Why profit and cash aren’t the same thing. Episode 46: How to understand what your Profit & Loss statement is telling you. Episode 47: How to use that information to make a deliberate owner-pay decision. More Free QuickBooks ResourcesTake the Free QuickBooks Clarity Scorecard Identify areas of your QuickBooks setup that may need attention. Visit Lee Davis & Company Explore more QuickBooks resources and practical guidance for small business owners. Have a QuickBooks Question?Email support@leedavisandcompany.com with your questions or suggestions for future episodes. Follow QuickBooks Mastery for Small Business Success and share this episode with another business owner who’s wondering how much they can afford to pay themselves. You deserve to get paid. Give your business a process that helps make that pay sustainable. This episode provides general educational information. Business-structure examples focus on U.S. tax treatment. Consult your accountant or tax adviser about compensation, payroll, and recording owner payments for your specific business.

  2. 6d ago

    Episode 46: Are You Actually Making Money? What Your P&L Should Be Telling You.

    Episode 46: Are You Actually Making Money? What Your P&L Should Be Telling YouYour QuickBooks Profit and Loss statement says your business is making money. But are you actually as profitable as you think? Increasing revenue doesn’t always mean increasing profitability. In fact, your business could be bringing in more customers, generating more sales, and working harder than ever—while your profit margins quietly shrink. In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis walk through how to read a Profit and Loss statement (P&L) in QuickBooks Online and understand what your financial numbers are really telling you. Using real-world business situations and practical examples, Lee explains how to evaluate revenue, direct costs, gross profit margins, overhead expenses, and net profit so you can make smarter decisions about your business. Free Download: Profit & Loss Review WorksheetReady to put what you’ve learned into practice? We’ve created a free, four-page Profit & Loss Review Worksheet to help you analyse your own business numbers, compare reporting periods, calculate gross profit margins, review expenses, and identify opportunities to improve profitability. Download Your Free Profit & Loss Review Worksheet In This Episode, You’ll LearnWhat your Profit and Loss statement actually measuresWhy higher revenue doesn’t always mean higher profitsHow to calculate and understand gross profit marginWhich expenses could be quietly reducing your profitabilityWhy owner compensation matters when evaluating your bottom lineHow to compare financial reports across different periodsWhere to find your P&L in QuickBooks OnlineWhat to do when you don’t trust the numbers in your financial reports Chapters00:00 — Welcome to QuickBooks Mastery 00:56 — Are You Actually Making Money? 03:10 — Understanding Your Profit and Loss Statement 03:49 — Why You Should Review Your P&L Monthly 05:33 — Revenue Growth vs. Profitability 06:37 — Labour, Materials, and Rising Direct Costs 09:55 — Understanding Gross Profit and Gross Profit Margin 12:10 — The $500,000 Business Example 13:27 — When Sales Grow but Margins Shrink 15:41 — Evaluating Overhead and Operating Expenses 17:43 — Subscription Costs and Cost Creep 20:08 — Insurance and Unnecessary Expenses 21:25 — Understanding Your Bottom-Line Profit 24:53 — Owner Compensation and the Next Episode 25:22 — What Your P&L Doesn’t Tell You About Cash and Debt 26:51 — Running Your P&L in QuickBooks Online 28:19 — What to Do When Your Financial Reports Seem Inaccurate 29:33 — Using Your P&L to Make Better Decisions 30:17 — Your Practical Challenge for This Week 32:01 — Coming Next: How Much Should You Pay Yourself? Your Action Step This WeekOpen QuickBooks Online and run your Profit and Loss statement. Compare this year’s numbers with last year’s. Review your revenue, gross profit, major expenses, and net profit. Then ask yourself one question: What is one thing in my financial reports that deserves more attention? You don’t need to solve everything today. Start by identifying one meaningful opportunity to improve your business. Use the free Profit & Loss Review Worksheet to guide you through the process. Resources & LinksFree Episode 46 Profit & Loss Review Worksheet: Dowload Here Listen to QuickBooks Mastery: https://quickbooks-mastery.captivate.fm/listen Take the Free QuickBooks Clarity Scorecard: https://lee-davis-and-company.aweb.page/unlock-clarity-free-scorecard Episode 45 Companion Worksheet — Profit vs. Cash Flow: Download Here Lee Davis & Company: Lee Davis and Company Website Have a QuickBooks question? Email support@leedavisandcompany.com. Coming NextHow much should you actually be paying yourself as a business owner? Next week, Erica and Lee discuss owner compensation, business profit, and how to think about paying yourself without putting your company’s finances at risk. Subscribe to QuickBooks Mastery for Small Business Success so you don’t miss it.

  3. Oct 15

    Episode 45- Where Did the Money Go? Why Profit and Cash Aren’t the Same Thing

    Episode 45: Where Did the Money Go? Why Profit and Cash Aren't the Same ThingYour QuickBooks Profit & Loss report says your business made money. So why doesn't your bank account agree? It's one of the most frustrating questions small business owners face. Your business looks profitable on paper, but you're still worrying about payroll, upcoming bills, or whether there's enough money to cover next month's expenses. The problem may not be your profitability. It may be your cash flow. In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis explain the difference between profit and cash flow, where your money actually goes, and which QuickBooks reports can help you find the answers. Plus, we're sharing a free Profit vs. Cash Flow Worksheet to help you follow the money in your own business. Download the Free Profit vs. Cash Flow Worksheet Why Profit and Cash Flow Aren't the Same ThingA profitable business can still experience a serious cash shortage. That's because your Profit & Loss statement measures income and expenses over a period of time, while your bank balance shows the cash available at a particular moment. Lee explains how several common business activities create differences between these numbers: Customers who have been invoiced but haven't paidEquipment purchases recorded as business assetsLoan principal repaymentsOwner draws and distributionsInventory purchases that tie up working capitalNoncash expenses such as depreciation You'll also learn how cash-basis and accrual-basis accounting affect your QuickBooks reports—and why switching your Profit & Loss report to cash basis doesn't necessarily explain every dollar moving through your bank account. A Practical Example: $20,000 Profit, but Only $5,000 in the BankErica and Lee walk through a fictional business, The New Tech Company, to demonstrate exactly how this happens. The business begins the month with $25,000 in cash and earns $100,000 in revenue. After recording $80,000 in expenses, it reports a $20,000 profit. But here's what actually happens to the cash: Cash ActivityAmount Beginning cash balance $25,000 Customer payments received +$85,000 Cash operating expenses paid -$78,000 Equipment purchased -$10,000 Loan principal repaid -$5,000 Owner equity draw -$12,000 Ending cash balance $5,000 The business also has $15,000 in unpaid customer invoices, and its reported expenses include $2,000 in noncash depreciation. The takeaway: The $20,000 profit isn't necessarily wrong, and neither is the $5,000 bank balance. They're measuring different things. Understanding the difference is how you move from wondering where the money went to making informed financial decisions. Want to see how these numbers work in your own business? Download the Episode 45 Profit vs. Cash Flow Worksheet Our free Excel workbook includes a cash reconciliation calculator, a four-week cash forecast, Lee's example, and a practical 15-minute financial review. What You'll Learn in This EpisodeProfit vs. cash flow: Why profitable businesses sometimes struggle to pay their bills.Cash vs. accrual accounting: How your QuickBooks reporting method affects the numbers you see.Accounts receivable: How slow invoicing and overdue customer payments create cash shortages.Inventory and business growth: Why getting busier can actually increase your need for cash.Accounts payable: How to anticipate upcoming bills and avoid unexpected cash shortfalls.Equipment, debt, and owner draws: Why significant cash payments don't always appear as expenses on your Profit & Loss.QuickBooks financial reports: How to use your Profit & Loss, comparative Balance Sheet, Statement of Cash Flows, and aging reports together.Weekly cash forecasting: How to anticipate cash shortages before they happen. Episode Chapters & Timestamps00:00 – Welcome to QuickBooks Mastery for Small Business Success 00:54 – Why Doesn't My QuickBooks Profit Match My Bank Balance? 01:43 – What's the Difference Between Profit, Cash, and Cash Flow? 03:55 – Cash vs. Accrual Accounting: Understanding Your Reports 06:33 – The $20,000 Profit Example: Following the Money 09:14 – Where Did the Cash Go? Common Reasons for the Difference 10:48 – Accounts Receivable: Getting Invoices Paid Faster 12:41 – Can Business Growth Actually Create Cash Flow Problems? 13:56 – Accounts Payable: Planning for Bills Before They're Due 15:25 – Equipment, Loan Payments, and Owner Draws Explained 18:41 – Which QuickBooks Reports Help Explain Your Cash Flow? 21:54 – How to Build a Simple Weekly Cash Flow Forecast 24:36 – Your 15-Minute QuickBooks Cash Flow Check 27:31 – Key Takeaways, Free Resources, and What's Coming Next 29:58 – Closing and Additional Resources Your Action Step: The 15-Minute Cash Flow CheckYou don't need to spend an entire day analyzing your finances to start understanding where your money went. Set aside 15 minutes this week and complete these five steps: Check your Profit & Loss. Select your last completed month, confirm the reporting dates and accounting basis, and write down your net profit or loss.Compare your cash balances. Look at the total cash across the business accounts you're reviewing at the beginning and end of that same month.Review your Statement of Cash Flows. Identify major cash movements that help explain the difference.Investigate one important item. Look at overdue invoices, inventory, equipment purchases, loan repayments, or owner withdrawals.Look ahead. Identify your next payroll, major bills, and expected customer payments. If you still can't explain the difference, ask your bookkeeper or accountant: "Can you walk me from the profit we reported to the change in our cash and show me the transactions that explain it?" That one question can lead to a much clearer understanding of your business finances. Free Resources & Helpful LinksEpisode 45: Profit vs. Cash Flow WorksheetPut Lee's advice into practice with our free Excel workbook. The worksheet includes: A worked example showing how $20,000 in profit can leave only $5,000 in the bankA cash reconciliation calculatorA four-week cash flow forecasting templateA 15-minute financial review checklist Download Your Free Profit vs. Cash Flow Worksheet Free QuickBooks Clarity ScorecardNot sure whether your QuickBooks numbers are accurate enough to make business decisions? Start with our free QuickBooks Clarity Scorecard to identify areas that may need attention. Visit: https://leedavisandcompany.com Episode 44: Building a Business Budget You'll Actually UseLearn how to create a practical business budget and compare your financial performance against your goals. Download the Episode 44 Business Budget Planning Worksheet Episode 41: Your Monthly QuickBooks Health CheckRevisit the monthly financial review process discussed in this episode to help identify bookkeeping problems before they become bigger issues. QuickBooks Mastery Program WaitlistWant to become more confident using QuickBooks to understand and manage your business? Join the waitlist for our upcoming QuickBooks Mastery training program and be among the first to know when enrollment opens. Visit: https://leedavisandcompany.com Coming Next: Episode 46Are You Actually Making Money? What Your Profit & Loss Should Be Telling You Now that you understand why profit and cash aren't the same thing, we'll take a closer look at profitability itself. What is your Profit & Loss statement really telling you about your business? How can you use it to identify what's working, what's costing too much, and where you should focus next? About Lee Davis & CompanyAt Lee Davis & Company, we help small business owners simplify QuickBooks, understand their financial reports, and make more confident business decisions. Through practical training, helpful resources, and the QuickBooks Mastery for Small...

  4. Oct 7

    Episode 44: Stop Guessing: How to Build a Business Budget in QuickBooks You’ll Actually Use

    Episode 44: Stop Guessing: How to Build a Business Budget in QuickBooks You’ll Actually Use Can your business afford to hire, buy equipment or expand next year? A useful budget helps you answer those questions with a plan you can actually use. In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis explain how to build a realistic business budget in QuickBooks—and how to use it throughout the year. Drawing on a real client budgeting project, they discuss where to begin, how to use historical Profit & Loss information, why seasonal businesses should not automatically divide annual numbers by twelve, and how your Chart of Accounts affects the usefulness of your budget. They also explore Budget vs. Actual: how to understand the story behind a variance, decide which differences need attention, and use your numbers to guide business decisions. Planning for 2027? Download the free 2027 Business Budget Planning Worksheet in the Resources section to document your assumptions, draft your monthly budget and review your results. Key TakeawaysA business budget is a financial plan for what the business wants to accomplish.Begin with historical Profit & Loss information, but do not automatically turn last year’s actual numbers into next year’s budget.A useful budget reflects reasonable assumptions about revenue, pricing, costs, staffing, contracts, capacity and business changes.Ask: What has to happen operationally for this number to be true?Revenue and expenses should be placed in the months when they are actually expected to occur.Do not automatically divide every annual budget number by twelve, especially in a seasonal business.Your Chart of Accounts should support the information you actually need from the budget and Profit & Loss.Budget vs. Actual turns the budgeting process into an ongoing management tool.Being over budget is not automatically bad, and being under budget is not automatically good. The important question is why.Investigate meaningful variances rather than simply labelling them as over or under budget.Make Budget vs. Actual part of your monthly reporting process, with more frequent tracking when your business needs it.Keep the original budget intact so you can see how reality differed from what you originally expected.Budgeting becomes more useful each year as your assumptions, systems and review process improve. Questions to Reflect OnWhat do you realistically expect revenue to be next year?What has to happen operationally for that revenue number to become reality?What costs will be required to generate that revenue?Which expenses are recurring monthly, quarterly, annually or seasonally?Are material costs, fuel, wages, rent, insurance or subscriptions changing?Are you planning new hires, equipment purchases, expansion or new services?Which months are naturally stronger or slower for your business?Does your Chart of Accounts give you the information you actually need?Which expenses have changed significantly during the past year?If revenue increases, does your business have the capacity to deliver the additional work?Which Budget-vs.-Actual differences are meaningful enough to require action?Does your current performance support the hires, purchases and goals you are considering? Chapters00:00 QuickBooks Mastery Podcast Introduction 00:55 Episode 44: Stop Guessing — Build a Business Budget You’ll Actually Use 02:31 Does a Small Business Really Need a Formal Budget? 03:57 A Budget Is More Than a Spending Limit 05:22 Where to Start Building a Budget in QuickBooks 06:45 Why Last Year’s Numbers Are Only a Starting Point 09:07 Why You Shouldn’t Divide Your Annual Budget by 12 10:23 When Your Budget and Chart of Accounts Don’t Match 12:39 Building a Realistic Budget Instead of a Wish List 14:33 What Has to Happen for This Number to Be True? 15:06 The Real Value: QuickBooks Budget vs. Actual 16:46 Understanding the Story Behind a Budget Variance 17:44 Why Being Over Budget Isn’t Always Bad 18:28 How Often Should You Review Budget vs. Actual? 19:53 Should You Change the Budget Midyear? 21:09 The Questions to Ask During Every Budget Review 22:59 Turning QuickBooks Into a Decision-Making Tool 23:42 Your Practical First Step: Build the Budget 24:41 Focus on the Expenses That Actually Matter 25:21 Your Budgeting Homework for This Week 26:19 QuickBooks Clarity Scorecard 26:34 QuickBooks Mastery Program and Waitlist 26:56 Lee’s Final Advice on Budgeting 27:29 Episode Wrap-Up 27:45 Podcast Outro Mentioned in This EpisodeQuickBooks budgeting tools and Profit & Loss reportsCalendar-year versus fiscal-year budgetingHistorical financial information and zero-based budgetingRevenue assumptions, pricing and capacityCost of goods sold, payroll and staffingMaterial, fuel, wage, rent and insurance increasesSubscription and contract renewalsSeasonal revenue and expensesChart of Accounts structure, budget categories and subaccountsBudget vs. Actual reports, dollar variances and percentage variancesMonthly, quarterly and more frequent budget reviewsKeeping the original budget intactUsing Excel as a first-draft budgeting toolThe free QuickBooks Clarity ScorecardThe upcoming QuickBooks Mastery program ResourcesFree 2027 Business Budget Planning Worksheet Work through the planning questions from this episode, document your assumptions, build a twelve-month business budget and review your Budget vs. Actual results. The editable Excel workbook includes annual calculations, a monthly Revenue and Net Profit chart, and space to explain meaningful variances and decide what action is needed. Download the free 2027 Business Budget Planning Worksheet (Excel) Episode 6: How to Create a Budget in QuickBooks Revisit our original budgeting episode for the foundations of creating and using a budget inside QuickBooks. Then use Episode 44 to go deeper into assumptions, seasonality and managing against the plan. Listen to Episode 6 Free QuickBooks Clarity Scorecard If you are not confident that the numbers already sitting in QuickBooks are accurate enough to build a budget from, begin with the free QuickBooks Clarity Scorecard. Get the free QuickBooks Clarity Scorecard QuickBooks Mastery Program Waitlist Join the waitlist for our complete QuickBooks Mastery program and be the first to know when enrolment opens. Join the QuickBooks Mastery waitlist More Episodes and Support Listen to QuickBooks Mastery for Small Business Success Visit Lee Davis & Company Questions or support: support@leedavisandcompany.com Your Practical Next StepRun your current year-to-date Profit & Loss and compare it with the same period from last year. Go back another year if it would help reveal longer-term trends. Look specifically at revenue, cost of goods sold, gross profit, net profit, payroll and your largest operating expenses. Then ask what you reasonably expect to change next year. Use the 2027 Business Budget Planning Worksheet to document your assumptions and build the first draft of your budget. Spread the numbers across the months when you realistically expect them to occur, then enter the plan into QuickBooks. Make Budget vs. Actual part of your regular reporting process. When the results differ from the plan, ask why—and use the answer to decide what needs to happen next. Subscribe to QuickBooks Mastery for Small Business Success, share this episode with another business owner planning for next year, and send your questions to support@leedavisandcompany.com.

  5. Sep 23

    Episode 43: Can You Actually Write That Off? Practical Tax Planning in QuickBooks

    Episode 43: Can You Actually Write That Off? Practical Tax Planning in QuickBooks“Can I write this off?” may be one of the most common questions business owners ask—but the answer does not begin with the card used to make the purchase or the account selected in QuickBooks. In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis explain how to think more clearly about business expenses before tax season. QuickBooks can organize the financial story, but it cannot turn a personal purchase into a legitimate business expense. The transaction still needs a real business purpose, appropriate tax treatment, and records that support both the amount and the reason for the purchase. You will learn the four questions to ask before treating a purchase as a possible deduction, how the Chart of Accounts supports tax planning, and why some categories deserve extra attention. Erica and Lee walk through meals and entertainment, vehicles and mileage, equipment and fixed assets, and the split between loan principal and interest. They also clear up several common myths: a write-off does not make a purchase free, a bank statement does not necessarily prove business purpose, and buying equipment before year-end does not automatically guarantee a full current-year deduction. Finally, Erica gives you an eight-step, 15-minute expense review you can complete in QuickBooks now—while there is still time to gather records, identify questions, and speak with your bookkeeper or qualified tax professional before year-end. Key TakeawaysA business expense generally needs to be ordinary and necessary for the business, with a genuine business purpose.Paying with a business account or categorizing a transaction as an expense does not determine whether it is deductible.A deduction generally reduces taxable income. It does not make the purchase free or create an automatic dollar-for-dollar refund.Before claiming an expense, ask: What did we buy? Why did the business need it? Was any part personal? What document proves the amount and business purpose?Separate business and personal activity so personal purchases do not accidentally land on the Profit & Loss.A clean Chart of Accounts gives the owner, bookkeeper, and tax professional a useful financial filing system.An LLC's federal tax filing depends on ownership, activity, and tax elections. The letters “LLC” do not automatically determine the return.Direct job costs may belong in cost of goods sold, while general overhead usually belongs in operating expenses.Qualifying business meals, including travel meals, are generally subject to a 50% limitation unless a specific exception applies. Entertainment is generally nondeductible.Mixed-use vehicles require documentation and an allocation between business and personal use. A logo on the vehicle does not replace a mileage or use record.Equipment expected to provide value beyond the current year may need to be treated as a fixed asset. The $2,500 de minimis safe harbor is conditional—not a universal automatic-expense threshold.Loan principal reduces a liability on the balance sheet; qualifying interest may be an expense. One payment can affect both the balance sheet and Profit & Loss.A bank or credit-card statement may prove payment, but it may not prove what was purchased or why it served the business.Attach receipts and record the business purpose while the transaction is fresh. Questions to Reflect OnWhat did the business buy, and why did it need it?Was any part of the purchase personal?Do you have a receipt or invoice that shows what was purchased—not merely proof that money left the account?Does your Chart of Accounts reflect how your business actually operates?Are direct costs separated from general operating expenses where appropriate?Do meal records identify who attended and the business purpose?Do you have a reliable mileage or vehicle-use record?Are large equipment purchases supported by invoices, purchase dates, financing details, and placed-in-service information?Are loan payments separated between principal and interest?Are unusual or unclear purchases sitting in Uncategorized Expense, Ask My Accountant, or Miscellaneous Expense?What questions should you bring to your bookkeeper or tax professional before year-end? Mentioned in This EpisodeOrdinary and necessary business expenses.The four-question deduction test.Owner draws and personal purchases.The Chart of Accounts as a financial file cabinet.Schedule C and differing federal tax treatment for LLCs, partnerships, S corporations, and C corporations.Cost of goods sold versus operating expenses.Advertising, fees, subscriptions, insurance, professional fees, repairs, supplies, rent, utilities, travel, meals, automobile costs, interest, and depreciation.The general 50% limitation for qualifying business meals.Nondeductible entertainment and separately stated meals.Standard mileage versus actual vehicle expenses.Fixed assets, depreciation, Section 179, bonus depreciation, and the de minimis safe harbor.Loan principal versus interest.Receipts, invoices, business-purpose memos, and supporting records.The 15-Minute QuickBooks Expense Review.The free QuickBooks Clarity Scorecard.The upcoming QuickBooks course. Recommended ResourcesDownload the 15-Minute QuickBooks Expense ReviewFree QuickBooks Clarity ScorecardListen to QuickBooks Mastery for Small Business SuccessLee Davis & CompanyQuickBooks training and course informationQuestions or support: support@leedavisandcompany.comIRS Publication 583: Starting a Business and Keeping RecordsIRS Publication 463: Travel, Gift, and Car ExpensesIRS guidance on tangible-property regulationsIRS guidance on records to keep Timestamps00:00 - QuickBooks Mastery Podcast Intro 00:56 - Episode 43: Can You Actually Write That Off? 02:46 - Important U.S. Tax Disclaimer 03:24 - What Makes a Write-Off Legitimate? 08:25 - What Makes a Business Expense Deductible? 09:57 - How the Chart of Accounts Supports Tax Planning 16:05 - Meals, Travel, and Entertainment 19:39 - Vehicles and Mileage 22:57 - Equipment and Fixed Assets 26:50 - Loan Principal Versus Interest 29:26 - Six Common Deduction Myths 31:28 - Records That Support a Deduction 33:11 - The Practical Habit to Begin This Week 33:56 - The 15-Minute QuickBooks Expense Review 37:06 - Why Deductions Begin Before Tax Time 37:39 - Clarity Scorecard, Course Waitlist, and Questions 38:45 - Final Sign-Off 38:55 - Podcast Outro Call to ActionOpen QuickBooks, set a timer for 15 minutes, and complete the expense review from this episode. You are not trying to prepare your tax return or reclassify every questionable transaction. You are identifying the places where the records, categories, or business purpose need more attention. [Download the 15-Minute QuickBooks Expense Review](ADD PDF DOWNLOAD URL AFTER UPLOAD), then take your question list to your bookkeeper or qualified tax professional before year-end. If you are unsure whether your QuickBooks can give you the information you need, begin with the free QuickBooks Clarity Scorecard. Email support@leedavisandcompany.com with your QuickBooks questions, subscribe to QuickBooks Mastery for Small Business Success, and share this episode with another business owner who has ever wondered, “Can I write this off?” This episode provides general educational information for United States small-business owners. Tax rules depend on the facts, entity, activity, elections, and tax year involved. Consult your own qualified tax professional before making tax decisions.

  6. Sep 17

    Episode 42: Is Your QuickBooks Ready for Tax Season? Start Now, Not in January

    Episode 42: Is Your QuickBooks Ready for Tax Season? Start Now, Not in JanuaryTax season may feel months away, but waiting until January to examine your QuickBooks can leave you trying to untangle an entire year under deadline pressure. In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis explain why tax readiness is a year-round process—and why September and October are valuable checkpoints for small-business owners. There is still time to correct bookkeeping problems, gather missing information, speak with your tax professional, and make informed year-end decisions before December 31. You will learn what “tax-ready QuickBooks” actually means, why a correct bank balance does not guarantee accurate books, which red flags deserve investigation, and what your CPA expects you to provide. Erica and Lee also walk through a practical 15-minute review you can use to identify questions without making rushed changes to transactions you do not understand. Key Takeaways● Tax readiness happens throughout the year. Consistent monthly bookkeeping makes year-end dramatically easier. ● September and October give you time to correct problems and pursue meaningful tax planning before the year closes. ● The business owner is ultimately responsible for understanding the financial picture, even when a bookkeeper manages QuickBooks and a CPA prepares the tax return. ● A matching bank balance does not prove that QuickBooks is correct. Duplicate transactions, personal purchases, uncategorized items, and incorrectly recorded assets or loans can still distort the reports. ● Review reconciliations, bank feeds, the Profit & Loss, the balance sheet, accounts receivable, accounts payable, payroll liabilities, loans, undeposited funds, and contractor records. ● Loan payments must be separated between principal and interest. Large equipment and vehicle purchases may belong on the balance sheet rather than the Profit & Loss. ● Old bank-feed items, negative balances, unexplained accounts, and receivables you do not expect to collect are questions worth investigating. ● Gather W-4s for employees, W-9s for contractors, receipts, bills, and supporting documents before deadlines to create unnecessary stress. ● Your CPA’s job is tax preparation and tax planning—not becoming your forensic bookkeeper during the busiest part of the year. ● If your 15-minute review reveals problems, make a list and investigate. Do not start deleting or changing transactions you do not understand. Questions to Reflect On ● Are all bank and credit-card accounts reconciled through the most recent statement? ● Are old or unexplained transactions still sitting in the bank feed? ● Does accounts receivable represent money customers actually owe—and that you reasonably expect to collect? ● Have all outstanding bills been entered into accounts payable? ● Do payroll-liability and loan balances agree with the underlying records? ● Were equipment and vehicle purchases recorded appropriately? ● Are there negative, uncategorized, or unexplained balances on the balance sheet? ● Do you have current W-9s for your independent contractors and complete employee information for year-end payroll forms? ● Can you explain the major changes on this year’s Profit & Loss compared with last year? ● Do you trust the numbers enough to have a productive tax-planning conversation? Mentioned in This Episode ● Profit & Loss and comparative Profit & Loss reports. ● Balance sheet review. ● Bank and credit-card reconciliations. ● Bank-feed matching and duplicate transactions. ● Accounts receivable, accounts payable, and undeposited funds. ● Payroll liabilities, W-2s, W-4s, 1099s, and W-9s. ● Loan reconciliation and principal-versus-interest allocation. ● Fixed assets, equipment, and vehicles. ● Receipts, bills, and transaction documentation. ● The free QuickBooks Clarity Scorecard. ● The upcoming QuickBooks course and Episode 43 on practical tax planning. Recommended Resources● Free QuickBooks Clarity Scorecard ● Lee Davis & Company ● Questions or support: support@leedavisandcompany.com ● QuickBooks course waitlist Timestamps00:00 - QuickBooks Mastery Podcast Intro 00:45 - Episode 42: Is Your QuickBooks Ready for Tax Season? 01:40 - When Tax-Season Preparation Should Begin 02:59 - Why the Business Owner Is Still Responsible 05:05 - What Tax-Ready QuickBooks Actually Means 07:00 - When the Bank Balance Is Right but QuickBooks Is Wrong 08:48 - The Biggest QuickBooks Red Flags Before Year-End 10:32 - Uncategorized Transactions and Old Bank-Feed Items 11:31 - Payroll Liabilities, Receivables, and Loan Balances 14:49 - Why Finding Problems Before January Matters 16:33 - Memory, Receipts, and Documenting Large Transactions 19:04 - Bookkeeping Cleanup Versus Tax Planning 20:13 - What Your CPA Expects at Tax Time 23:04 - A Practical 15-Minute QuickBooks Review 24:43 - Investigate Before You Change Transactions 26:47 - You Have Time: Start With the Clarity Scorecard 28:16 - Episode 43 and the QuickBooks Course Waitlist 30:54 - Final Reminder and Podcast Outro Call to ActionSet aside 15 minutes and open your QuickBooks. Review the bank feed, balance sheet, Profit & Loss, reconciliations, accounts receivable, accounts payable, loans, payroll liabilities, and uncategorized transactions. Write down anything that does not make sense. Begin with questions and investigation rather than rushed changes. If you are unsure whether your QuickBooks is ready for tax season, start with the free QuickBooks Clarity Scorecard. It will help you identify where you have clarity and where your books may need attention. Email support@leedavisandcompany.com with your QuickBooks questions, subscribe to QuickBooks Mastery for Small Business Success, and share this episode with another business owner who would rather prepare now than panic in January. This episode provides general educational information. Consult your own qualified tax professional about tax planning, deadlines, deductions, retirement contributions, and decisions specific to your business.

  7. Sep 9

    Episode 41: Can You Trust Your QuickBooks? The Monthly Health Check Every Business Owner Should Do

    Episode 41: Can You Trust Your QuickBooks? The Monthly Health Check Every Business Owner Should DoBefore you hire an employee, buy equipment, or decide how much you can pay yourself, can you trust the numbers behind that decision? In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis walk through a practical monthly QuickBooks health check for small business owners. The goal is not perfect bookkeeping. It is understanding whether your financial reports reflect what is actually happening in your business—and knowing which questions to ask when something does not make sense. From bank reconciliations and old bank feed transactions to accounts receivable, accounts payable, payroll liabilities, and your Profit & Loss, this conversation gives you a repeatable way to review your books. You will also learn why unexplained balance sheet balances and rising expenses deserve attention before you use your reports to make a business decision. Key TakeawaysReconcile every bank and credit card account. A connected bank feed is not the same as a completed reconciliation.Investigate old or unexplained bank feed items rather than assuming the books are current.Review accounts receivable for money you realistically expect to collect and accounts payable for bills you actually owe.Understand payroll liabilities. A balance is not automatically wrong, but its timing and amount should be explainable.Look at the balance sheet as well as the Profit & Loss. Negative balances, old balances, and unfamiliar accounts can signal questions worth asking.Compare your Profit & Loss with what happened in the business. Look for missing costs, unexpected changes, and expenses that have crept up.Treat “I don’t know” as a useful starting point. Write down the question and work through it with your bookkeeper or accountant.Finish with the question that matters most: do you trust these numbers enough to make a business decision? Questions to Reflect OnWhich report or balance do you currently find hardest to explain?Does your receivables total represent cash you expect to collect—or invoices that need attention?What costs have increased without you noticing?What decision are you postponing because you are unsure about your numbers?Who will help you investigate the first “No” or “I don’t know” on your monthly check? Mentioned in This EpisodeThe 10-question Monthly QuickBooks Health Check.Bank and credit card reconciliations and bank feed review.Accounts receivable and accounts payable reports.Payroll liabilities, balance sheet warning signs, and Profit & Loss comparisons.Mystery balances, uncategorized transactions, and Ask My Accountant accounts.The free QuickBooks Clarity Scorecard. Recommended ResourcesMonthly QuickBooks Health Check PDFFree QuickBooks Clarity ScorecardLee Davis and CompanyQuestions or support: support@leedavisandcompany.com Timestamps00:00 - QuickBooks Mastery Podcast Intro 00:56 - Episode 41: Can You Trust Your QuickBooks? 03:20 - Trustworthy QuickBooks Does Not Mean Perfect QuickBooks 07:27 - Start the Monthly QuickBooks Health Check 09:29 - Bank Feed Warning Signs and Unexplained Transactions 11:29 - Accounts Receivable: What Will You Actually Collect? 13:58 - Accounts Payable and Cash Planning 15:40 - Payroll Liabilities and Balance Sheet Red Flags 19:33 - Does Your Profit & Loss Pass the Common-Sense Test? 22:15 - Cost Creep: What Has Changed? 23:44 - Mystery Balances and Uncategorized Transactions 25:23 - Can You Make a Business Decision From These Numbers? 26:59 - The 10-Question Monthly QuickBooks Checklist 32:05 - Your 30-Minute Challenge and the Free Clarity Scorecard 36:09 - Closing and Podcast Outro Call to ActionSet aside 30 minutes this month and answer the health-check questions with Yes, No, or I don’t know. Choose one item to investigate, identify who can help, and set a follow-up date. Start with the free QuickBooks Clarity Scorecard, and email support@leedavisandcompany.com with the question you would like us to cover next. Follow QuickBooks Mastery for Small Business Success in your podcast app and share this episode with a business owner who wants more confidence in their numbers. If you leave a review, a few words about what helped—or what could be clearer—give us useful feedback for future episodes.

  8. Sep 4

    Episode 40: Where Is Your Profit Going? How to Use QuickBooks to Find Cost Creep

    Episode 40: Where Is Your Profit Going? How to Use QuickBooks to Find Cost CreepYour business can be growing while your profit is quietly getting smaller. A vendor raises a price. A discount expires. A software subscription renews at a higher rate. Material costs increase. Payroll or overtime creeps up. None of those changes may seem significant on their own — but together, they can slowly eat away at the profit you worked hard to create. In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis talk about cost creep and how small business owners can use QuickBooks to identify rising expenses before they become a much bigger profitability problem. Lee shares a real client story about noticing that a negotiated payroll discount had changed. The client wasn't notified that the amount they were paying had increased. Lee caught it because he was reviewing the numbers, questioned what had happened, contacted the payroll provider, pushed to have the correct pricing restored, and pursued the missed discount retroactively. But this episode goes far beyond payroll. We talk about how to use your QuickBooks Profit & Loss report, vendor history, purchase orders, Products & Services, cost of goods sold, payroll reports and expense trends to understand what your business is actually paying — and whether those costs are changing faster than your sales. Because increasing revenue doesn't automatically mean increasing profit. If your sales grow 5%, but your cost of goods sold grows 10% or 15%, something deserves a closer look. The goal isn't to cut every expense or always choose the cheapest vendor. The goal is to know what you're spending, understand why you're spending it, and make those decisions intentionally. QuickBooks is most valuable when it does more than record transactions. It should help you answer questions like: Where is my money going? Why did my profit change? What is getting more expensive? Are my margins shrinking? Where do I need to ask better questions? Key TakeawaysSmall increases add up. A $50 or $100 recurring increase may not seem significant until it happens every week or every month.Revenue can hide a cost problem. Growing sales don't necessarily mean growing profit if expenses are increasing even faster.Use your Profit & Loss report to compare periods. Look at changes in both dollars and percentages and start with the expenses that increased the most.Review vendor history. QuickBooks can show you what you paid a vendor previously so you don't have to rely on memory.Purchase orders can protect negotiated pricing. Compare the vendor's bill with what you originally agreed to pay.Know what your products and materials actually cost. If your cost rises while your selling price stays the same, your profit margin shrinks even if your revenue looks unchanged.Watch cost of goods sold. If COGS is increasing significantly faster than sales, that can be an important warning sign.Pay attention to payroll and overtime. Ask whether increasing payroll costs are producing a corresponding increase in sales, productivity or output.Use your numbers when negotiating. There's a big difference between saying, “This seems expensive” and being able to show a vendor exactly how your pricing has changed over time.The cheapest expense isn't always the best expense. Reliable vendors, quality products, good insurance and valuable employee benefits may absolutely be worth paying more for. The goal is not simply to spend less. The goal is to spend intentionally. Questions to Reflect OnWhat are the five vendors, products or expense categories that have the greatest impact on your business's profitability?What were you paying for those expenses six or twelve months ago compared with what you're paying today?If your costs increased, did your pricing, sales or business model change enough to absorb that increase? Mentioned in This EpisodeProfit & Loss ComparisonsUse your QuickBooks Profit & Loss report to compare one period with another and look for expenses that have increased substantially in either dollars or percentage. Vendor HistoryReview what you've historically paid recurring vendors and question unexpected changes rather than automatically assuming the current charge is correct. Purchase OrdersFor businesses purchasing inventory, materials or equipment, purchase orders can create a record of negotiated quantities and pricing that can later be compared with the vendor bill. Products & ServicesQuickBooks Products & Services can help you track what you're selling and, when set up properly, what those products or materials cost your business. Cost of Goods SoldWatching COGS alongside revenue can help identify margin compression that might otherwise be hidden by growing sales. Payroll and OvertimePayroll is one of the largest expenses for many businesses. Increasing overtime should be reviewed alongside the additional revenue or productivity it is generating. Duplicate BillsLee also shares a recent example of a client's health insurance bill being entered twice. Reviewing the vendor history helped identify the duplicate before the second payment went out. Recommended ResourcesFree QuickBooks Clarity ScorecardNot sure whether your QuickBooks is giving you reliable enough information to make these kinds of business decisions? Our free QuickBooks Clarity Scorecard can help you identify where your QuickBooks is working, where there may be gaps, and whether you're getting the financial clarity you need to confidently run your business. Get your free QuickBooks Clarity Scorecard here: https://lee-davis-and-company.aweb.page/unlock-clarity-free-scorecard Timestamps00:00 - QuickBooks Mastery Podcast Intro 01:14 - Where Is Your Profit Going? Understanding Cost Creep 03:11 - The Payroll Discount Story: Catching a Hidden Cost Increase 08:28 - What Cost Creep Is and Why Small Increases Matter 14:42 - Using QuickBooks Profit & Loss Reports to Find Rising Expenses 20:23 - Products, Services, Cost of Goods Sold and Shrinking Margins 24:09 - Negotiating With Vendors Using Your QuickBooks Data 38:56 - Key Takeaways: Protecting Your Profit From Cost Creep Call to ActionYour QuickBooks should do more than tell you what already happened. It should help you understand where your money is going, what is changing, and what decisions you need to make next. If you're not sure whether your QuickBooks file is giving you information you can actually trust, start with our free QuickBooks Clarity Scorecard: https://lee-davis-and-company.aweb.page/unlock-clarity-free-scorecard And if you have a QuickBooks question, something in your books that doesn't make sense, or a topic you'd like Erica and Lee to cover in a future episode, we'd love to hear from you. Email us at: support@leedavisandcompany.com We read and respond to every email. And don't forget to subscribe to QuickBooks Mastery for Small Business Success so you don't miss the next episode.

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Running a business is hard. QuickBooks shouldn’t make it harder. Welcome to QuickBooks Mastery for Small Business Success—the podcast for growth-minded small business owners who are ready to stop drowning in financial confusion and start making confident, data-driven decisions. Hosted by Lee Davis & Erica Northrup, the father-daughter duo behind Lee Davis & Company, each episode delivers practical advice, proven systems, and real-world strategies to help you clean up your QuickBooks, simplify your bookkeeping, and grow your business with clarity. Whether you’re stuck in a bookkeeping mess, unsure how to read your reports, or ready to finally outsource your financial chaos, this show gives you the tools and insight to move from overwhelm to control—one episode at a time. Because your time should be spent on your craft and building your business—not buried in spreadsheets and reconciliations. ⸻ Perfect for: • Service-based small businesses • Business owners making $750K–$2.5M annually • Entrepreneurs tired of trying to “figure out” QuickBooks on their own • Leaders who want to spend less time managing their books and more time growing Subscribe today and take the guesswork out of your numbers.

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