Stat of the Month:
Having just sent my daughter to college, this quote from Jim Rohn resonated: "Formal education will make you a living; self-education will make you a fortune." One of our core values at Red Bike Advisors is “Learning, Growth, and Progress” -- and in the AI era it couldn’t be more appropriate.
Payroll on Autopilot
As a Gusto Silver Partner, we recommend Gusto Payroll over QuickBooks and ADP. Why? Gusto streamlines payroll, benefits, and automated tax filings like no other platform. Gusto surveyed customers that switched from ADP and they saved an average of 100 hours per year on tax and compliance work.
What’s your time and peace of mind worth? Now through Sept. 30, if you switch from ADP to Gusto, you’ll get 50% off of Gusto Payroll for 6 months. Contact our accounting team at accounting@redbikeadvisors.com to learn more.
Closing or Selling Your Business? Here’s What You Need to Know About Taxes
Closing a business is never easy—whether it’s the result of retirement, a sale, or simply the next step in your journey. But once the decision is made, there are critical steps to take to close things out the right way, especially when it comes to taxes.
First Things First: Let Us Know ASAP
Not only may we be able to advise on tax-advantageous structures if you’re selling or closing your business, but it’s critical to timely file an extension for the final income tax return, since it usually takes time to get everything else in order.
Read more
Your Breakaway Growth Navigator: Financial Reports
Continuing our series on the key elements of building a strong business financial foundation—this month, we’re moving to the next core concept: Know Your Numbers – How to Navigate the Trifecta of Financial Reports Without Feeling Stupid.
Want to know what almost every business owner’s dirty little secret is?
They don’t know how to read financial reports.
In fact, the #1 question we get from clients is, “How come there’s no cash in the bank when the P&L says I made money this year?”
The #2 question is probably “How am I doing?” followed closely by “How do I log into Quickbooks?” (Doh)
Why master your books: You don’t have to do the bookkeeping (we actually recommend that you don’t— your time is way too valuable), but you should be able to read and understand your reports.
You should know seasonal trends, profitability by product or service, whether or not your balance sheet is healthy, and who owes you what.
We’re breaking down the three essential financial reports every business owner should know:
- Profit & Loss (P&L) – Your business’s performance monitor
- Balance Sheet – A snapshot of financial fitness
- Cash Flow Statement – Your oxygen tank (profit ≠ cash!)
We’ll also touch on two bonus reports (A/R Aging and Budget vs. Actuals) that give you even deeper insights.
Let's start with the Profit & Loss report (P&L):
- Top line = revenue
- Middle = cost of goods sold & operating expenses
- Bottom line = net income (profit or loss)
Look for:
- Trends in revenue: Are sales growing or shrinking?
- High expense categories: Any surprises or overspending? Miscategorizations?
- Net profit margin: Are you keeping enough of what you earn?
Next up, the Balance Sheet:
Think of this like your business’s scorecard.
Look for:
- Cash position: Is it growing or shrinking month to month?
- Debt levels: Are liabilities increasing faster than assets?
- Owner equity: Is your business building value over time?
Completing the trifecta of financial reports is the Cash Flow Statement:
Profit ≠ Cash. You can show a healthy profit but still run out of money.
Look for:
- Operating cash flow: Are your core operations generating cash?
- Investing activities: Are you buying assets or equipment?
- Financing activities: Are you taking out loans or making owner distributions?
Two Other Mission-Critical Reports
Accounts Receivable Aging Report
Who owes you what and how overdue is it?
Use this report to:
- Track unpaid invoices by customer and aging category
- Identify clients who consistently pay late
- Project short-term cash inflows more accurately
- Prompt timely follow-up and collections
Budget Report
“A budget is telling your money where to go and instead of wondering where it went.”
–John C. Maxwell
How are you performing against your budgeted revenue and expenses?
Use this report to:
- Compare revenue and expense targets to actual spending
- Catch overspending early and reallocate funds
- Adjust forecasts based on actual trends
- Stay accountable to financial goals throughout the year
Red Flags to Watch For
🚩 You’re showing profit, but your bank balance is low (remember, profit and cash are not the same thing!)
🚩 Your accounts receivable is growing too fast (got to get that cash in the bank; you can't spend money owed to you)
🚩 You’re consistently dipping into credit lines to fund operations (a credit line should be for emergencies and investments, not for funding daily operations)
🚩 You have no clear system for reviewing reports (like driving without a GPS…wherever you go, there you’ll end up)
🚩 You only look at numbers at tax time (Knowing Your Numbers is the key to sustainable, profitable growth)
🚩Your balance sheet shows negative owner’s equity (this means you owe more than you own, like an upside-down mortgage)
The 4 Levels of Financial Awareness
Aim to move from Review → Compare → Leverage → Predict level over time.
Next month: We’ll dig into the metrics that matter most—and how to benchmark your business against your industry for smart, sustainable growth.
Unlock More Profit and Growth with Two New Services
We’re excited to introduce two powerful, value-added services designed to help you take your business to the next level:
- Breakaway Growth Accelerator – A proven framework to help you scale faster, streamline operations, and free up your time to focus on what truly matters.
- Tax Savings Blueprint – A tailored strategy that uncovers hidden opportunities to legally minimize taxes, keeping more profit in your pocket.
Both programs are designed to work hand-in-hand, giving you clarity, confidence, and control over your business growth.
Book your free strategy session today and start gaining more profit and more freedom.
Who do you know that needs our services?
We're accepting new clients for...
1. Proactive accounting, tax & advisory
2. Tax resolution
3. Forensic accounting and fraud investigations
Who do you know that needs our services? Let us know--we're happy to help!
A Question for You
Is your financial focus simply compliance, or to grow a profitable, sustainable business?
Until next month,
Your Red Bike Advisors Team
About Red Bike Advisors
We're on a mission to equip small business owners with finance and tax insights that create exponential value for their companies, customers, employees, and families. From compliance to advisory, we take the confusion and scramble out of business finance and tax strategy and bring in clarity, growth, and peace of mind.
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