My Writing > Practice with your own money

23 Oct 2005

Practice with Your own Money…

Eileen Reppenhagen, QuickBooks ProAdvisor

People who write books about planning tell us that if you plan, it will happen. I plan so it happens. Every few months I sit down with year-to-date financial reports and plan for the next few months. To give me that extra bit of motivation I look at my sales year-to-date by customer compared to last year for the same time or even compared to the entire year. I monitor my progress so that I know how my plan is working and if I have to tweak it as I go I’m able to do so.

Money management is about what comes in and what goes out and exactly how and when that happens. There are three critical items any business needs to know when it comes to money management:

  • Expected inflows;
  • Required outflows and their timing; and most importantly,
  • Bank balance or position. What is your balance today?

If you do not track those three key indicators on a regular basis, I think you might be doomed. A large percentage of small businesses start up and then fail to thrive and I really believe it’s because they do not take a pulse often enough.


In any business, you have to invoice to bring money in. In order to invoice, an accounting business must keep track of time spent, and place a value on that time. Every day I summarize my time and input the data into a time sheet in my accounting software. At what I call appropriate billing moments (the times I accomplish something of note), I generate an invoice and email it to the client. If I am working on a large project, these moments could be weekly.

Then I wait for the money. I might have a retainer on account, but usually not. If I have to ask for retainers, I probably don’t know the client well enough and I have to ask myself why I took them on as a client in the first place. In any case, if the money does not arrive, I stop the work. I’ve let the client know up front that this is what they can expect. If the delay is too long, I simply hand them back their paperwork and ask them to find someone else. I will not warehouse incomplete work.

I use the invoice as a communication tool. I document what work has been accomplished to date and then I make a note of what is yet to be done, what is expected before I can proceed, and any other communication that I deem necessary to catch the attention of my busy clients. Trust me, clients read their invoices.

I keep their invoices in a file marked C&B (Correspondence and Billing), right behind the permanent file with their contract. C&B is also a permanent file. This process provides me with a documentation trail of how the file is progressing. It tells a pretty good story about what I was thinking at the time I sat down to invoice the client, and sometimes I review this file before I agree to take them on again next year.

As for collections, I expect to be paid immediately upon receipt of the invoice. I remember someone saying that invoicing should be proud and prompt. If you delay invoicing even a few days, it says to the client that you didn’t need the money that badly and that you can wait a bit longer to get paid if you couldn’t be bothered to get out the invoice.


With so many supplies and services now online, my practice expenses are usually paid using my personal credit card. A few like my liability insurance are still paid by cheque from my business chequing account. I keep a separate chequing account for the business and deposit all of my sales monies to that account.

After paying the expenses necessary and setting aside an amount for GST, PST, Payroll, Payroll Liabilities, WCB and Income Taxes, I pay the net remainder to my personal account by bank transfer. Why would I leave money sitting idle in an account when it does not have to be paid out for at least a few months? I calculate a rough estimate of my taxes every month and submit it to my instalment account throughout the year. That way I will never be penalized for instalment interest and out of sight removes it from temptation.


We all find our own comfort zone about how we handle our money. Practicing with management of your own money will give you insight into what your clients must deal with when they manage their own money.

I encourage you to initiate conversations with your clients about how they handle their money. In my experience, I have found it to be very enlightening. Most have some sort of a system of allocation of funds. Some go to great lengths to allocate out funds in to envelopes or jars for groceries, gas, spending money; some are totally kamikaze, but somehow manage to make ends meet.






Eileen Reppenhagen is the originator and contributing author of Section 800 of the CGA Canada Public Practice Manual "Future Oriented Financial Information"  and a participant in CGA Canada's Video: Taking Care of Business  Email:

Eileen Reppenhagen




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