ChApter 6 | YOUR PROFIT AND LOSS FORECAST | 115
to hire a part-time bookkeeper to do
day to day upkeep. If you are starting
small, your initial cost should be under
$500 and your monthly cost under $20 0
to keep the records up to date and to
prepare routine employee withholding
tax returns, statements, etc., assuming
you close the register each day. Once a
year you will pay the CPA another few
hundred dollars to review this work and
help you prepare your yearly returns. If
your business is going to be fairly good-
sized from the start, your figures will be
larger.
If you’re interested in keeping your
own books, you’ll probably want to look
into reliable accounting software such
as Intuit’s QuickBooks (www.intuit.com),
or M.Y.O.B. Plus (www.myob.com). The
program you need depends on how big
your business might grow to be, what
extra features like statements or payroll
you want the computer to provide, and
so forth. You can research the different
programs yourself, but remember to
keep in mind the features you may need
later on after your business has grown.
Or you can look into an outside service,
which may recommend a program to fit
your business and computer, set up the
books, and run parallel for a month or
two to make sure that you don’t lose any
data. The systems can be very handy
and timesaving if you have no strong
attachment to a paper record, or are
willing to print out the documents you
may want.When designing a bookkeeping system
for your business, remember that it
costs a lot of time and money to change
it—make sure it really fits you and your
business. (See Chapter 12 for a further
discussion of computers in business.)
Make as good an estimate as you can
and enter this figure on your Profit and
Loss Forecast. You can take the year
total and divide it by 12, or you can
enter the amounts when you think they
will be paid.
4g. interest. This line of your Profit and
Loss Forecast concerns the interest
portion of the payments you make on
any money you borrow. Unless you have
an interest-only loan with a balloon
payment at the end, your interest
payment will vary from month to month
even though you pay the same monthly
amount.exAmple:
Joanie Ricardo borrows $50,000 from
the bank to open a Gelato’s Ice Cream
store in Providence, Rhode Island. She
agrees to repay it in 36 equal monthly
installments of $1,660.80, including 12%
interest on the unpaid balance. While
Joanie’s monthly payments remain
equal, the portion of the payment
that is credited to principal increases
every month, while the portion of
her payment going toward interest
decreases.