Bountiful Baby Financial Reports
Publicly traded companies must have public financial reporting. As mentioned in a prior post, we will be moving closer to that reporting model, and are going to be more transparent in this area. Perhaps someday we can actually become a publicly traded company, where you can buy shares of our stock on the OTC stock market.
Publicly traded companies must have audited financial reports. Private companies do not have that requirement. We are a private (family owned) company, so we aren’t required to have audited financial reports, but I have never-the-less recently engaged a third party CPA accounting firm to create audited financial reports of our company. I look forward to what they produce.
We use Windows-based Quickbooks Enterprise for our accounting software. We switched to Enterprise mid-year 2019, just before the 2019 Rose show. Prior to that we used Mac Desktop Quickbooks. Quickbooks has a number of reports built in. This morning I ran (for the 2019 year-to-date) both an Income Report, as well as an Expense Report, and I am sharing the results here:
Here is our Income Report, as generated by Quickbooks:
It is never a good idea to keep very much cash on hand— you should instead invest the cash for a higher return. And that is what we have done. A little less than 10% of our 2019 income-to-date is investment income. About 90% of the income is from website sales, and 0.18% is rental income. The rental income is from my sons, who are renting a portion of the east side of our building for their company, Handgun Haven. I found long ago that boys aren’t necessarily going to be enamored by dolls, and so they needed their own “man-cave”, so to speak. And so I helped create one for them.
All website income automatically flows to our business checking account. We use Shopify for our website platform, and Shopify payments requires a bank account to move the money to. So does PayPal. All income and all expenses always flow through that checking account, and Quickbooks is the tool we use to reconcile that account.
Here is our Expense Report, as generated by Quickbooks:
Our COGS (Cost of Goods Sold) is the bare vendor cost to acquire product for resale. Some companies include freight and a few other expenses in their COGS calculation. We do not. We keep it all separate.
Professional Fees are mainly legal fees, accounting fees, and the fees we pay the Korean Martial Arts instructors.
“Guaranteed Payments to Partners” is money that Denise and I pay ourselves. It is our monthly wages.
The “Other” category was automatically generated by Quickbooks. It is all of the other incidental expenses, each of which were judged (by Quickbooks) as too small to individually report. It includes things such as Utilities, Advertising and Promotion, Property Tax, Bank Charges, Insurance, Gas & Oil, Employee Meals, Permits & Licenses, Travel Expense, etc…
No money can leave the company without it being booked somewhere. With double-entry accounting, the Quickbooks accounting software won’t even allow it otherwise, and the above chart shows where those bookings have occurred for all money that has left the company year-to-date for 2019.
From this it should be apparent that we sink everything we can back into the company. It mainly gets poured back into COGS, as we expand our product line. Our Kinby line is a prime example of that. Aside from COGS, the USPS Postage to ship out orders is our single largest expense. We are one of USPS’s largest customers in the Salt Lake area. Payroll is our third largest expense. Those three alone (COGS, Postage, and Payroll) take up more than 77% of the revenue, with everything else together taking up the remainder. And click here for a post showing how we do payroll.
As mentioned above, I look forward to getting our audited reports for not only the 2019 tax year, but prior years as well. All of the prior years will show the same pattern as above. As much money as we can gets pumped back into the business, for growth.