What are the best accounting systems for small businesses?

As a business owner, do you know what you need to have in place for your finances to work as a smooth operating machine in the new year?

As we head into 2025, every business owner needs a simple, strategic financial plan. If you’re ready to stay profitable, organized, and ahead of the game, now is the time to set up a reliable financial system.

In this post, I’m walking you through three essential financial systems—complete with downloadable templates—that you can implement today!

Why Financial Systems Matter for Small Businesses [It’s more than choosing the best accounting software)

Financial systems aren’t just about keeping the lights on; they’re about growth, consistency, and peace of mind.

The right system ensures you’re prepared for taxes, understand where every dollar is going, and know exactly how much you can reinvest back into your business.

Here’s a look at the top financial systems every small business needs to thrive in 2025.

1. Profit & Loss Tracking: The Foundation of Your Business

A profit and loss statement (P&L) is one of the most vital tools in your financial toolkit.

Many business owners only focus on their P&L statements during tax season, but reviewing your P&L every month ensures that you always know where your money is going.

A Profit and Loss System Will Help You Track Your Business’s Financial Health

A monthly P&L statement gives you a precise view of your revenue, expenses, and net profit, enabling you to:

• Identify trends in your expenses and income.
• Make informed decisions about hiring, expanding, or adjusting budgets.
• Prepare for tax season with up-to-date financial information.

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Download: For an easy start, grab the Profit and Loss Template, which helps you review your finances monthly and stay on top of critical financial decisions.

What to Track on Your P&L

Your P&L statement doesn’t need to be complicated. Key elements include:

• Income: Sales, services, or any revenue-generating activities.
• Cost of Goods Sold (COGS): Costs directly tied to your product or service, like materials or manufacturing.
• Operating Expenses: General business expenses such as rent, utilities, salaries, and marketing.
• Net Profit: Revenue after all expenses have been subtracted.

2. Cash Flow Forecasting: Stay Ahead of Your Cash Needs

Cash flow is your business’s lifeline.

You might be profitable on paper, but if cash isn’t flowing in when it’s supposed to, you’ll struggle to cover payroll, bills, and other crucial expenses.

A cash flow forecast helps you track when cash will hit your account—and when it’ll go out—so you can avoid cash shortages.

Why Cash Flow Matters

Cash flow forecasting gives you a roadmap of your cash situation over time.

It’s especially important if you deal with seasonal revenue or delayed payments from clients. By forecasting your cash flow, you can:

• Anticipate potential shortfalls and adjust spending or savings accordingly.
• Make smarter decisions about timing big expenses, like inventory or new hires.
• Stay ready for payroll and taxes without scrambling for funds.

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Download: Grab the Deluxe Cash Flow Forecast Template to set up a clear cash flow roadmap that’ll give you peace of mind and confidence for 2025.

Setting Up a Cash Flow Statement

Your cash flow forecast should be realistic and based on actual data. Include:

• Cash Inflows: Estimate incoming cash from sales, services, or client payments.
• Cash Outflows: Expected payments for expenses, payroll, and taxes.
• Monthly Summary: A month-by-month breakdown of cash in vs. cash out, with an ending balance for each month.

3. Profit Planning: Allocate Earnings for Growth and Stability

Profit planning takes your revenue and allocates it into specific “buckets” so every dollar has a purpose.

It’s not about budgeting to restrict yourself; instead, it’s about setting aside funds for growth, reinvestment, savings, and other priorities.

Think of it as your financial roadmap for sustainable growth.

How Profit Planning Works

Profit planning simplifies big decisions about your finances. Here’s how each bucket works:

1. Pay Yourself: Don’t forget to reward your hard work! This amount should cover your personal needs.
2. Emergency Savings: Allocate funds for unforeseen business expenses.
3. Opportunity Fund: Save for growth investments, like hiring, equipment, or marketing.
4. Tax Savings: Dedicate a percentage for tax payments to avoid year-end stress.

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Download: Get started with our PROFFIT Plan™ Worksheet, a step-by-step tool for managing your profits in a way that fuels growth and reduces risk.

Essential Financial Templates for Small Business Owners vs. Online Accounting Software

To make financial systems easy and actionable, I’ve created several templates specifically for small businesses.

Each one is designed to help you set up clear, customized, and manageable financial systems. Check out the resources below to get started:

📋 Annual Planning Guide

• Profit & Loss Template: Track your monthly revenue, expenses, and profit to make informed decisions about your business.
• Deluxe Cash Flow Forecast Template: Stay ahead of potential cash shortfalls with this customizable template.
• PROFFIT Plan™ Worksheet: Divide your earnings into specific goals like savings, taxes, and growth so every dollar serves your future.

Common Questions about Small Business Financial Systems

Q: Can I manage my finances without expensive software?
Absolutely! Many small businesses thrive using spreadsheets and simple templates like the ones linked above. While software has advantages, particularly double entry accounting software, starting with these templates keeps costs down.

Q: How often should I review my P&L and cash flow forecast?
Monthly reviews are ideal. A monthly check-in helps you adjust quickly to changes in revenue or expenses and keeps you prepared for larger financial obligations.

Q: What’s the difference between cash flow and profit?
Profit is what’s left after expenses are subtracted from revenue, while cash flow focuses on the actual timing of money coming in and going out of your bank account. Both are important but serve different purposes.

Q: How do I prepare for taxes with these systems?
Regularly saving a portion of your profit for taxes, ideally in a dedicated tax savings account, can make tax season stress-free.

Start the New Year with Financial Confidence

By implementing these three essential financial systems, you’re not just setting up your business for success in 2025—you’re creating a solid foundation for growth, stability, and freedom.

Imagine stepping into the new year with clear profit goals, a reliable cash flow system, and confidence in your finances.

Ready to take action? Download your templates in the Annual Planning Guide and let’s make 2025 your best year yet!

Conclusion

Whether you’re setting up your first financial system or revamping an old one, these three core tools will make a difference.

Financial clarity is the key to growth, and now, with just a few clicks, you can create a system that keeps your business thriving in 2025. Let’s start the new year on the right financial foot—together!

This transcript is a direct copy from the video and has been formatted for readability. None of the original words have been altered.

When I feel overwhelmed in my business, it often means I need better systems in place. That’s why today, I want to share three simple financial systems that you can implement right now to take control of your business finances in the new year. No expensive software or overly detailed budgets—just straightforward strategies to keep you informed, organized, and profitable.

1. Track Your Profitability

Why Profitability Tracking Matters

Tracking your profitability isn’t just about taxes; it’s about staying on top of your numbers year-round. When you consistently monitor your profit and loss (P&L) statement, you can make mid-year adjustments, like raising prices or cutting unnecessary expenses, to increase profitability. Waiting until tax season could mean missing critical opportunities to improve your business.

How to Track Profitability

For simple business models, you can use a spreadsheet to track your P&L. For more advanced needs, tools like QuickBooks or Xero can automate and simplify the process.

Pro Tip: If you’re not sure where to start, use my Profit and Loss Template at jamietrull.com/profitandloss. It’s beginner-friendly and perfect for creating monthly P&L statements.

2. Forecast Your Cash Flow

Why Cash Flow Forecasting Is Critical

Profitability tells you how your business is performing on paper, but cash flow is what keeps your business running day-to-day. Cash flow forecasting helps you anticipate periods of shortfall or surplus so you can plan ahead and avoid relying on debt or credit cards to make ends meet.

How to Forecast Cash Flow

Create a projection of your expected cash inflows and outflows over the next few months. This allows you to see how timing impacts your cash balance and prepares you for potential challenges.

Pro Tip: Grab my Cash Flow Forecast Template at jamietrull.com/cashflow for an easy-to-use tool that simplifies cash flow management.

3. Create a Profit Plan

What Is a Profit Plan?

A profit plan ensures that the money your business earns is allocated toward what matters most, like paying yourself, saving for taxes, reinvesting in your business, or preparing for emergencies.

The PROFFIT Framework

Each letter in PROFFIT stands for a specific purpose:

• P: Pay yourself
• R: Rainy day fund (emergency savings)
• O: Opportunity (reinvestment in the business)
• F: Future (debt repayment or retirement savings)
• F: Fun (reward yourself!)
• I: Impact (charitable giving)
• T: Taxes

Tools to Help You Plan

Using a system like Relay Business Banking makes it easy to set up separate accounts for each category. Relay allows you to create up to 20 checking accounts and two savings accounts, making it seamless to allocate funds automatically.

Alternatively, you can use a spreadsheet to track your profit plan if you’re happy with your current bank.

Pro Tip: Download my Proffit Plan Template at jamietrull.com/profitplan. It’s free and comes with a step-by-step tutorial to help you personalize the plan to fit your unique goals.

Why You Don’t Need a Detailed Budget

By implementing these three systems—tracking profitability, forecasting cash flow, and creating a profit plan—you’ll eliminate the need for a restrictive budget. These systems provide the flexibility to invest in your business when opportunities arise, all while keeping your finances under control.

Start the New Year Right

Take control of your business finances with these three simple systems:

1. Track your profitability with a P&L statement.
2. Forecast your cash flow to avoid shortfalls.
3. Create a profit plan to allocate funds toward your goals.

Get Started Now:

• Profit and Loss Template: jamietrull.com/profitandloss
• Cash Flow Forecast Template: jamietrull.com/cashflow
• Proffit Plan Template: jamietrull.com/proffitplan

And don’t forget to check out Relay Business Banking at jamietrull.com/relay. You’ll get $50 when you sign up through my link, and oh, by the way—it’s free!

Drop your questions below or join me for my next Power Numbers Live Show to learn more. Here’s to a profitable and organized year ahead!