Two Realities (June Numbers)

If Only Real Life Were Like This

I love to count my money after a lucrative month. My wacky accounting calendar defines “June” as May 30–June 26 this year, so the month ends tomorrow. My spreadsheet uses 7-day blocks to facilitate weekly comparisons. But calendar drift eventually moves a week from one month to the next. When a four-week month becomes a five-week month my comparisons suffer.

I really ought to beat my spreadsheet into compliance with calendar accounting. Doing so would invalidate monthly comparisons between 2011 and previous years, but eliminate calendar creep in future years. Nobody cares about any of this except me, of course. But since I’m 100% of the staff, it’s a burning issue in Curio City...and that's what this blog is about, right?

June finished phenomenally after May’s mediocrity. Whisky Stones did great for Fathers Day…bird kites have been selling steadily across the board…and two large Business Card Briefcase orders really kicked it over the top. I have temporarily shelved my plan to move bird kites to their own top-level category on the “If it ain’t broke” principle.

Here are June’s numbers, followed by explanations.

Total income: +48%
Total COGS: +56%
Payroll: +28.8%
Net Income (Profit): +189.2%


Year to Date:

Total income: +32.7%
Total COGS: +48.9%
Payroll: +49.7%
Net Income (Profit): -2,258.3%

The YTD bottom line looks incredibly scary, but it only represents $472. Last year I was very slightly in the black; this year I’m still a few hundred bucks in the red. Closing the gap won't be trivial, but neither is it impossible. Remember that for all the dramatic percentage moves, there still aren't that many dollars flowing through this company.

I must have explained what these numbers mean at some point over the years, but here’s a refresher course for newcomers and the forgetful.

• Total income: Very simply, the top line dollars coming in over the transom.
• Total COGS: Cost of Goods Sold should rise in lockstep with Total Income. Lower is good, higher is bad.
• Payroll: Dollars in my pocket. More is nice for obvious reasons, but bad to the extent that it reduces my year-end profit payout and increases my personal payroll taxes paid. This number ought to track Total Income, plus a bit for the raise I gave myself at the end of last year.
• Net Income: Earnings before interest, taxes, depreciation, and amortization (ebitda) – the first draft of the accountant’s bottom line. Naturally, I want this number as high as possible. As an S corporation, Kraken Enterprises is obliged to pay its profit to its stockholders each year. I actually only take out 75% of it and leave 25% as retained earnings for company growth, even though I’m responsible for 100% of the taxes due. Ideally I’d take all of my compensation this way and screw the paychecks, because one doesn’t pay social security or medicare taxes on dividend income. But the IRS can smite me if I don’t take a “reasonable” salary, and I obviously need beer money.

Anyway, Payroll + Net Income = my total compensation, more or less. Theoretically both of those numbers should rise in lockstep with the top line. The YTD numbers show that I'm getting nicer paychecks this year but the year-end bonus is in some doubt.

Now we come to July, the low point of the year. I’ll be shutting down for 10 days as usual. Making plan should be easy, but if there’s one month when it doesn’t matter, July’s the one.



Unfortunately, Real Life Is Like This

Republicans once again blocked unemployment benefit extensions. Yesterday Senate Democrats gave up (after multiple votes over eight weeks) and walked away from the table. When Anne’s current benefit tier runs out, we will lose our only regular monthly income. And because Medical Security Program reimbursements are restricted to unemployment benefit recipients, we will have to pay the full cost of health insurance. If Republican obstructionism isn’t overcome soon, we will finally fall off the cliff after 17 months of dancing on the edge. Repeatedly closing and re-opening Anne’s claim to report her freelance income makes it impossible to know exactly when her current benefit tier expires, but it’s coming up soon.

Oh, and the state’s denial of double-digit rate increases on individual health insurance plans was overturned yesterday. That $990 Fallon plan that I had my eye on is likely to top $1,200 a month if Fallon’s appeal is also upheld. I don’t know what to do now. How are we supposed to pay for that without unemployment checks? Our health insurance crisis is back on the front burner. Thanks, Republicans!

Despite this, we’re going on vacation in three weeks. A dumb financial decision, to be sure, but it’s a needed psychological balm. My beautiful blonde tresses are literally turning gray from the past year’s chronic money stress. (Or maybe I'm just nearing my expiration date).

The 12 job applications that Anne sent out a couple of weeks ago got seven responses, five of which led to interviews. One of those jobs is an excellent opportunity (the others all have serious drawbacks). She passed the phone interview and has a 2.5-hour follow-up with four interlocutors next Thursday. She could potentially land a near-perfect job just as our house of governmental cards blows away.

If you’re the praying sort, get down on your knees. Either delivering this job or destroying the Republican Party would be a satisfactory miracle. (Sorry, I'm just venting frustration...I can think of a few objections to letting Democrats frolic at peace. It's just that every time I think I've got things under control....).