Lis Lee Accounting LLC


You may be surprised to hear this, but I never thought I’d be self-employed.  I actually specifically said at a young age that I would NEVER own my own business.  We all know what happens when we say never, right?  

Here’s the backstory – for as long as I can remember, my dad worked in the family business which my grandfather started.  He worked so hard to help his father grow the business, putting in those long days and weekends to build something for his family.  Once my grandfather passed away, my dad became responsible for the business and kept putting in those long hours and there was definitely more STRESS.  That’s what I remember – all I saw was how much HARD WORK it was to own and run a business.  

My siblings and I were lucky enough to work at the business every time we were on school break.  As we watched our dad, we saw first hand what life looked like at work and at home for a small business owner.  Looking back, I’m so grateful for that experience and all it taught me, but I still thought it would be better to go to work for someone and not shoulder the responsibility that comes with owning a business.  

So at first I did just that – I ended up going to school and majoring in business accounting and then going to work for an accounting firm.  Talk about LONG hours and STRESS haha – there was a ton of that, but I also learned SO much and got to meet so many amazing people and see the backend operations of a lot of amazing businesses.  After working in public accounting, I moved into working with nonprofits and government for a while, but I kept thinking about working with small businesses and finding a way to do that in a sustainable way (get to see my family sometimes and not burnout).  How could I use my experience and knowledge to help small business owners while also still being able to build a life I loved (+family – burnout)?  That’s when I decided to start Lis Lee Accounting.  

Some days I still cannot believe I get to do this.  Yes, owning your own business is certainly hard at times.  Yes, there are days when you wish you could punch a clock for someone else and call it a day.  But there are so many rewarding moments like the absolute joy of helping business owners achieve their goals, or when I am able to be flexible in my personal life in a way I never could have imagined when I worked for someone else.  The satisfaction that comes from knowing you are using your skills and gifts in a way that is aligned with your values is unmatched.  

Thank you for taking the time to read my business story in brief.  I would love to hear more about you and your business.  If we haven’t already, let’s connect and get to know each other.   

First priority is to get all of your Form W-9s in hand ASAP! You need a Form W-9 from your vendors to confirm their information and to determine whether or not you must file a Form 1099 for payments made to them. Request a Form 1099 from your landlord, attorney, and any vendor who is not your employee who performed services for your company. It is best practice to require this documentation before making payment to these vendors, but if you don’t have a Form W-9 on file yet for them, send your requests on out now so you have plenty of time to get those Form 1099s prepped before the January 31 due date! Read on for more info on Form 1099 filing in 2020…

Previously, Form 1099-MISC was filed for each non-employee (independent contractor) to whom you have paid at least $600 (cash or check/ACH) for services performed for your business. This year, those payments will be reported on the new Form 1099-NEC. When reporting non-employee compensation, the filing deadline is January 31. These payments are now reported in Box 1 of Form 1099-NEC. If you are filing less than 250 forms, you can file on paper. If you file 250 or more returns, you must file electronically. If you are early to the game, you can order your forms online. Paper forms can be found at most office supply stores (Staples, Office Depot, etc.). You may also choose to e-file. Many accounting softwares and/or payroll softwares offer an e-file option within the platform. Check with your software provider to see if this is available to you and make sure you file by their required date. Besides non-employee compensation, be sure to analyze these two additional common categories for reporting:

  • Business Rent Payments should still be reported in box 1 of Form 1099-MISC. For business rent payments, you do not have to report these payments on Form 1099-MISC if you paid them to a real estate agent or property manager.
  • Attorney Fees paid should now be reported in box 1 of Form 1099-NEC. NOTE/ Attorney fees DO still need to be reported even if they are a corporation.

If you paid the vendor by credit card or a third- party network (like PayPal for business), those payments do not need to be reported as the credit card company or third party are required to report them. A few other common exceptions that typically do NOT need to be reported are as follows:

  • Payments to a corporation (including an LLC treated as a C or S corporation). NOTE/ Attorney fees DO still need to be reported even if they are a corporation.
  • Payments for merchandise, telephone, freight, and storage.

If filed on paper, Form 1099 filings should be filed with one Form 1096 (as a sort of summary coversheet). For the full list of instructions, see the IRS Instructions for Form 1099-MISC and Form 1099-NEC

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Overall my thoughts about this book are that it’s a tool that may work really well for certain business owners and I think that you can find some real help in here.  If you’re familiar with and like the cash envelope system for budgeting, you might really like this approach.  It’s essentially a budgeting and cash flow management system.

The author writes from a place of understanding how business owners often naturally behave and then works to create a system that flows with that instead of fighting against the natural inclination.  The premise is that business owners often look at their bank account balance regularly and view that as an indicator of how they’re doing in their business and how they should make decisions.

We can definitely agree on one point that the author makes early on in the book and that is that there is only one way to fix your financials and that is by facing your financials and I wholeheartedly agree with that. I think one of the biggest hurdles that business owners face in figuring out their business money is taking that step of facing the reality of the numbers and I’ve shared that in my posts recently so go ahead and check those out.  So starting from that place I definitely agree and I’m aligned with finding an approach to help business owners take that step.

To get into the actual formula, the traditional accounting equation is sales minus expenses equals profit.  The profit first formula flips that around and says that sales minus profits equals expenses.  So in the original accounting equation profit is somewhat beholden to whatever is left over after expenses and in the profit first formula expenses are forced to sort of bend to what you’re going to say your profit is and so that is the key difference of this approach and this way of looking at your business financials.  

To facilitate this equation the author has created an assessment that uses what I think is probably the most helpful tool in the book and that is the TAPs and CAPs.  Wondering what that stands for???  CAPs are your current allocation percentages and TAPs or your target allocation percentages. So CAPs helps you understand where you are at now and TAPs helps you visualize where you want to go. The reason I think this tool is so helpful is the author actually gives a roadmap for how to work these applications in your business from a baby business (so someone who’s just starting out) all the way up to the ranges where your revenue is becoming more significant.  Since there are structured ranges based on your gross revenue, this becomes a really useful, quick win you can use to assess your business and I think that’s one of the most powerful things in the book is it gives people an approachable, concrete way to begin understanding the health of their business.  

Not only do you get to see and understand the current health of your business but you also get a roadmap for implementing these percentages and working towards the target allocation percentage and that is I think a really great part of the book where you’re actually getting guidance on how to gradually and sustainably work towards those percentages if you’re not quite where you want to be over the span of quarters and months.  You’re not just gonna go 0 to 60 and go from where you’re at right now immediately to where you think you should be or where you want to be.  It’s going to be a gradual process over time of implementing strategies for tweaking your expenses, improving your sales, and taking different approaches to bring those numbers where they need to be little by little.

Now when it comes to the part that I think a lot of people think about when they think about this book it’s that you’re supposed to have all these bank accounts.  I can’t personally speak for that part because I haven’t actually implemented having all those bank accounts.  It’s something I’ve toyed about experimenting with for 2021 so I can share my feedback with you.  If that is something you want to see me try and report back on, I am open to doing that so let me know in the comments below!  Even outside of the bank accounts; I think there’s still so many great nuggets here such as concrete numbers for budgeting, specific strategies for timing of payments, figuring out what reasonable amounts are for expenses and for paying yourself, how to get out of debt, and knowing when you can afford certain expenses.  If there’s any one of those that resonates with you or that you’d like to hear more about please let me know and I can share more in depth in another post.

This question has come up a lot (as it should) so it’s time we address it here.  One of the goals of your business is to make money, but how do you go about using that money for your life?  Here are a few questions to help you figure that out.  Today, I’m speaking to sole proprietors and single-member LLCs, but if you’re not in that category and have questions on this, let me know.

What do you need?  Think through the costs associated with your most basic needs (rent, food, fuel, utilities, etc.).  Be realistic about this and don’t try to make some spartan budget if you know that’s not going to work for you.  We’re just gathering information here so put down your best estimates.

What do you want?  Go to the next level and think about what you envision and want for your life, usually you will have goals that are beyond your current situation and that’s great!  How would that new reality change the numbers above (usually they will be bigger!)?  Again put together your best guess of how much it would take to fund that goal or lifestyle.  These answers will help inform your revenue targets or how much your business needs to make.   

What can your business realistically support?  According to the Profit First method, if you’re a new business or a business bringing in less than $250K/year, you would aim to pay yourself 50% of revenue (after materials and subcontractors) to start.  That leaves the rest for operating expenses, taxes, etc.  How does that number match up with what you need and want?  If your business doesn’t currently have the margins to pay you what you need/want, here are your go-to solutions: increase sales and/or decrease expenses.  Another option is to take on a part-time job to help keep you afloat for a bit – just make sure this doesn’t take you too much away from actually being able to GROW the business.  I’ll be touching more on this soon when I share my book review of Profit First.

How do you record it?  When you pay yourself, it’s not a payroll expense and will not show up on your Profit and Loss.  Instead, it will show up on your balance sheet as a reduction in equity and cash.  

Let me know in the comments if this was helpful!

It’s that time of year

Now is a great time of year to think about investing in your business.  There are going to be plenty of upcoming sales this quarter (for software, digital products, and physical products) so let’s talk about how you can time it right to invest in your business at a great price.  

Over time, I’ve used this same approach to add tools and resources to my business to support operations and growth in a sustainable way.  Each item or tool I’ve added has special meaning and value 1)  I know that my business earned the dollars to support the spend which is satisfying in itself; and 2) each addition was well thought out and intentional.

Questions to ask yourself

When you think about purchasing something for your business, you want to ask yourself a few questions to assess needs vs. wants along with appropriate timing.  

  • Is this purchase necessary for my business?  Is this item necessary to support business operations?  This one is kind of a no-brainer, but still important to start with.  Sometimes you must spend on items that are absolutely necessary, but may not be directly related to revenue generating activities.  This is a great question to ask in all circumstances as there are items you may THINK you NEED, but they are actually just shiny “wants” that are a distraction and not the best use of your funds.  
  • Will this purchase support my business growth?  Will this purchase generate revenue?  Will you be able to turn around and make a profit using this new product or tool?  If you will be able to make a return on your investment, that’s the ultimate purchase win.  Will it enable you to offer a new service or work more efficiently?  Will it set you up for growth without the growing pains?
  • Is it time for this yet?  Sometimes a purchase may not be a bad idea, but it’s a bit too soon.  It may be a great product or service, but your business may not be able to support the spend yet or it may be a tool or software that is overkill for the stage you’re in.  
  • Does this purchase fit my current means?  Is it in budget?  Even if it would really be nice, but if it’s going to break the bank you may want to hold off until you have the plan or the funds in place to comfortably make it work without putting your cash flow and bottom line unnecessarily at risk.

Once you’ve answered these questions, you should be able to more confidently make the decision to purchase or not to purchase.  If you decide to purchase, make sure you document and record the transaction so you can see how it impacts your business as well as your tax return.

If you’re ready to invest in your business, I’ve got something exciting to share with you. In January 2021, I’m launching a 6-week LIVE program to walk you step-by-step through how to implement the most foundational financial systems and processes in your business so you can move from feeling stuck and unsure to in-control and empowered in your business decision-making. I’m opening up 10 spots to work with me to create true transformation – if you want in, book a call here (spots are limited!).

Q4 brings the possibility of a fresh start for a strong finish.  Right now, many business owners are still feeling overwhelmed and disheartened as they manage massive change in their business and personal life.  The sense of potential that comes from a temporal landmark like Q4 or the holiday sales season may be just what we need to give us the oomph to make progress on that goal or take action on that one thing you keep thinking about, but not doing.  I say ride that potential as far as you can and use it to your advantage!  

A couple of practical tips to make this work for you…

  • Set aside some time over the next few days or this weekend to reflect and plan.  Review your current goals and tasks and create some realistic expectations for the next few months.  Make sure to take the holidays into consideration if you celebrate as you may want to give yourself extra space during that time to rest, recharge, and be present.
  • Make it a date and put it on a calendar (paper or digital) so it’s in front of you day to day and week to week and has time allotted to it.  For this I like to put down everything I know is going to happen to see what space I’m working with, then I can visualize what time I’m working with to achieve my goals and complete tasks and projects.  I especially utilize recurring time slots for certain projects/tasks or I block out specific windows of time for others.  
  • A few key business points to remember for this quarter:
    1. Talk to your staff and customers and ask them for their feedback on their experience with your business this year.
    2. Review what’s working and what’s not with your offers, products, or services.
    3. If you’re launching any special sales or products for the holidays – make that part of your Q4 strategy.  Here’s a great list of pertinent dates.
    4. Get caught up or stay on top of your bookkeeping as year end is right around the corner.  If you’re up-to-date, end-of-year filing and reporting is going to be so much easier for you. If you need help with this part let’s set up a time to talk it over (you can book your call here). I’m also offering a new online training in early 2021 for those of you who would like support, but aren’t quite ready to jump into a one-on-one relationship yet. Business Financial Foundations (B.F.F.) is a 6-week LIVE program to walk you step-by-step through how to implement the most foundational financial systems and processes in your business. I’m opening up just 10 spots to work with me to create true transformation and we’re getting started on January 7th. If you want in, let’s hop on a call and talk some business strategy! Book a call with me here.

Hope this overview was helpful, leave a comment below with how you are approaching Q4. Would love to hear what you’re up to!

October 31Halloween
November 11Veteran’s Day
November 26Thanksgiving Day
November 27Black Friday
November 28Small Business Saturday
November 30Cyber Monday
December 10 – December 18Hanukkah
December 24Christmas Eve
December 25 Christmas Day
December 31New Year’s Eve
December 26 – January 1Kwanzaa

Running a business takes A LOT of work, but when we can get the financial management piece to run a bit more smoothly, you will feel more in-control and empowered and less out-of-control and helpless.

Think about this for a moment…

What are the words and feelings that come to mind when you hear the phrase business finances?  Are they positive?  Negative?  Neutral?  For those of you who experience feelings of frustration, confusion, and fear when you think about this topic – please know, you are absolutely not alone and I want to share something with you right now that might lighten the load just a bit… 

Your business financials provide information NOT identity. 

Sometimes we are afraid to approach the topic because we may see areas for improvement and perceive them as personal failures (which are painful to face).  I challenge you to take a different approach and take on the attitude of curiosity on a quest for improvement.  What you don’t know CAN hurt you so get in there and start discovering and figuring out where you can do better.  Take a clinical approach and imagine you are searching out information to inform your decision-making vs. searching for mistakes that you’ve made.   

The process of recording and reviewing your financial information is a PRACTICE that will be unique to you and your business and will change as you learn and as you and your business grow.  The sooner you start and the more you practice, the quicker you can find out what methods and systems work for you.

Knowing your numbers and having a firm grasp on your financial picture allows you to plan AND react from a place of empowered confidence.  Even when the scenario is not what you wish it was – awareness matters. If you are aware of what is, you can take effective steps to make better, more informed decisions and have more options at your disposal.  The most sure path to improvement is to keep going, keep practicing, and keep showing up.

Simple Steps Will Get You Started

Your must have tools to get started are really only a laptop, phone, and a notebook. Coffee helps too of course:)  If you can set aside time each day/week/month to record transactions, you will thank yourself later!  When I first started working with one of my clients, they would wait until the end of the year to review their records and prepare for tax time.  Not only was that negatively hanging over their head throughout the year and putting a ton of pressure on them at year-end, they were also missing out on information that could enhance their decision-making and giving up headspace and bandwidth to that massive to-do.

Now they have a system in place that allows them to stay on track, make informed decisions (they are planning to make their first hire), and tax time was a breeze this year!  I share this to let you know that you are not alone, and with the right mindset, workflows, and tools you can get there too!

If you’re interested in a DIY approach click here to schedule a phone call to review your options.  If you’re looking for more support and someone to jump in to help you, book a call here to find out how we can work together.

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Many of you just filed your 2019 taxes a few weeks ago.  Hopefully it was a smooth process, but I know you may have been scrambling at the last minute to get everything together.  That’s why I’m starting now with reminders for year-end 2020!  We’re just over halfway through the year so now is a great time to get on track with your 2020 financials so your year-end reporting and tax returns are a breeze this next time through.

What is year-end reporting?  Besides the tax prep piece, companies typically prepare their financial reports for a 12-month period at the end of the year to review their performance and plan for the following year.  Don’t miss out on this important performance review action for your company!  

What can you do now to prepare?  Usually, companies begin preparations for the year-end in the fall (for a calendar year-end), but that is assuming they are all caught up on their books.  If you’re behind for 2020, now is a great time to catch-up and set yourself up for success as you get closer to year-end.  

If you’re feeling less than motivated about it, just take a moment to think about how you’ll feel when you’re back on track and how you’ll feel next year when there’s no back-log.  If you’re interested in a DIY approach click here to schedule a phone call to review your options.  If you’re looking for more support and someone to jump in to help you catch up, book a call here to find out how we can work together to get you where you need to be.


Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.