Easy Steps to Start Managing your Bookkeeping

Small business ownership and bookkeeping have to go hand in hand. Sorry for the reality dose but all businesses have to take control of their bookkeeping either by doing it themselves or hiring someone to do it. This is often something that gets put on the back burner because business owners are busy trying to make money and are not even sure where to start.
The result is that many are swimming in financial overwhelm. If this is you, grant yourself some grace. You are not alone. Once you start a business, money is going out in every direction and hopefully money is coming in as well. What to do with all of these receipts, bills and emails? Is that your burning question that causes you to ignore the subject for another day or week or even month? Unfortunately, this won't solve the problems. Come January, you will have to face it and it will then be a much bigger problem. Like any issue it is better to address it when it is little mole hill rather than a large mountain or chaos.
Let's break it out into a few smaller steps
  1. open a business checking account
  2. open a business credit account
  3. get a system for your receipts
  4. use a spreadsheet to track monthly income
  5. use a spreadsheet to track monthly expenses
  6. pick a time each day or week that you update all of these things and make it a priority!
Open a business checking account:
Hands down, this is the first step every business owner should take. You may think you don't have enough business for this but any amount of business transactions should be from a business account. It makes bookkeeping way more difficult if you have to untangle business and personal expenses and account for them. It is a simple step and doesn't cost any additional money, find a bank that offers free accounts. If you can't find a free business account, open a second personal account but only use it for business.
Open a business credit card (if you plan to make credit card purchases):
If you plan to make purchases with a credit card, it is much cleaner to use a separate card for your business. Similar to a bank account, it triples the work to untangle things and there is way more room for error.
Get a system for your receipts:
This can be a Google Drive folder or a paper folder labeled September 2020. I have Free Download: 10 Steps to Get Your Receipts Under Control on my website if you would like a complete process.
Create a spreadsheet to track monthly income:
It doesn't have to be complicated. Simple will get the job done and will be easy to maintain.
  1. column A: date
  2. column B: customer (who paid you)
  3. column C: amount
  4. column D: what they purchased
Create a spreadsheet to track monthly expenses:
It doesn't have to be complicated. Simple will get the job done and will be easy to maintain.
  1. column A: date
  2. column B: vendor (who you purchased from)
  3. column C: amount of purchase
  4. column D: description (what did you purchase)
Plan a time to update these records:
Decide what day and time you will do this each week. Put it on your calendar. Seriously, plan it like an important client meeting. It is important and it will keep you sane. Creating this habit is important. It will not only keep your records up to date, it will become second nature. If you do it only a couple times a year, you will not only be overwhelmed by the task but you will also have to re-learn how to do it each time. Which is a waste of valuable time.
Following these steps will give you a good start to overcoming your overwhelm as far as your business bookkeeping is concerned. If you want to move beyond spreadsheets and folders, there are also some great software programs available. We use Quickbooks Online mostly with our bookkeeping clients. If you would like to learn how to do all the bookkeeping for your business using Quickbooks Online, my workshop, Bookkeeping... Chaos to Clarity: 30 day workshop to learn how to manage your bookkeeping in 15 minutes a day launches next week. Sign up at the top of our website to get all the details.

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