Story: Business Owner Who Found Hidden Profit Before Year-End

Lauren Twitchell
Nov 26, 2025
3 min read

Most business owners think of December as a wrap-up month—time to close out the books, breathe a little, and gear up for tax season.

But for one Central Florida business owner, year-end cleanup didn’t just bring closure—it revealed nearly $4,800 in hidden profit she didn’t even know she had.

Here’s how it happened—and how you can find your own hidden profit before the year ends.

1. The Backstory: A Busy Baker With Messy Books

Sarah runs a small home-based bakery in Eustis.

She sells at local markets, fills custom orders, and takes online payments through Square and PayPal.

Like most solopreneurs, she started strong—tracking everything neatly in a notebook. But once business picked up, the recordkeeping took a backseat.

By October, she hadn’t reconciled her accounts in months. She had money coming in from every direction—but no clear picture of what was profit and what was just movement.

When she reached out to Zero Fluff Books, her goal was simple:

“I just want to know if I’m actually making money.”

2. Step One: Reconcile the Chaos

The first step was pulling six months of bank statements, Square payout reports, and expense receipts.

Here’s what we found:

Square fees weren’t being deducted in her expense totals.
Market booth fees and ingredient costs were lumped together.
She had refunded a few orders but never adjusted the income side.

The result?

Her books were showing $2,000 less in profit than she’d actually earned.

3. Step Two: Separate, Simplify, and Rebuild

We created three simple expense categories that made sense for her business:

Ingredients & Supplies
Sales Fees & Booth Costs
Business Overhead (utilities, packaging, etc.)

Then we categorized every transaction using that framework.

Once we separated refunds, fees, and true expenses, her books started to tell a clearer story.

4. Step Three: Track Every Fee

Most small business owners underestimate how much platforms like Square, PayPal, or Etsy take in processing fees.

Sarah wasn’t tracking hers at all—so her “income” was inflated, and her expenses incomplete.

Once we accounted for those fees properly, we discovered:

She’d overestimated her expenses by $1,300.
She’d underreported her revenue by $3,500.

That’s where her hidden profit was hiding—all because the numbers weren’t connected.

5. Step Four: Compare Actuals to Goals

We built a simple year-to-date summary:

Category	Actual	Goal	Difference
Total Income	$32,800	$30,000	+$2,800
Total Expenses	$17,900	$20,000	-$2,100
Net Profit	$14,900	$10,000	+ $4,900

It turned out she’d been far more profitable than she realized—she just couldn’t see it through the clutter.

6. Step Five: Shift to a New System

We set her up with a clean, Excel-based bookkeeping system (the same one we use for our cleanup clients).

Now she logs her income and expenses weekly, reconciles monthly, and reviews her profit every quarter.

She no longer guesses what’s working—she knows.

Her comment afterward still makes me smile:

“It’s like I found money in my own pockets.”

7. How You Can Find Hidden Profit Too

You don’t need to overhaul everything to uncover more income.

Start here:

✅ Reconcile your accounts (make sure deposits match payouts).

✅ Separate fees, refunds, and true expenses.

✅ Review each category for duplicate or missing entries.

✅ Compare this year’s numbers to last year’s.

Chances are, you’ll spot patterns—and maybe even dollars—you didn’t know were there.

8. The IRS Angle

Accurate books don’t just reveal profit—they protect it.

According to IRS IRM 4.10.7.3.8, your records must clearly show both income and related expenses. When those two aren’t aligned, your deductions or reported profit can be questioned.

Clean, reconciled books make your income credible—and that’s what keeps audits short and smooth.

9. Year-End Is the Best Time to Fix It

December isn’t too late—it’s the perfect time.

Catching up now lets you: