Do-It-Yourself: Simple Steps to Keep Up With Your Bookkeeping

When you start a business, the last thing you may be thinking about is the day-to-day tracking of your financial information. You’re likely excited about the product or service you know your customers will love and you can’t wait to get out there and start selling.

All of a sudden, you start making money! And you start spending money. It crosses your mind that you should probably be keeping track of this information, but you aren’t sure where to start.

We’ve all been there. We’re excited to start something and sometimes let the things that don’t interest us as much slip through the cracks. For me, I can do my bookkeeping all day long. But ask me to write a blog post or schedule social media postings and I want to run and hide!

Thankfully for me, there are many others out there who are good at posting blogs and marketing their business. So, I have many resources that I can tap into to handle these tasks that are necessary for my business but not necessarily my favorite things to do.

Today, I’m here to help you. If you’ve just started your business or find yourself several months (or even years…yikes!) in and feel that your process for tracking your money isn’t the strongest.

Use these tips to help you get on track

1. Make sure you’re using a business bank account for business transactions. Tax accountants can get a little anxious if you bring in your records and they have to try to figure out what’s personal and what’s for your business. Keep your business expenses separated and easily identifiable by opening a business bank account right away.

2. Set aside at least 5 to 10 minutes each day to review your business finances. Record transactions daily so they don’t pile up on you. Nothing is more daunting than waiting until the end of the month only to realize you have to spend 5 hours on bookkeeping.

3. Save receipts for business expenses. You should always have documentation to back up the information in your tax return. If an item is ever questioned and you don’t have receipts and documents to back it up, you may lose a valuable deduction.

4. You don’t have to have some fancy accounting software to track your business income and expenses…at first. When you’re just starting out, using an Excel spreadsheet or Google Sheet to track your business income and expenses is likely to work just fine. As you grow, you’ll want to look for a more robust software solution so you can make important decisions to scale your business. But when you’re just starting out, using a spreadsheet and categorizing everything by month will work fine to keep everything organized so you know what’s happening at tax time.

5. And this leads to my next point. The better your records are maintained throughout the year, the less you’ll have to pay your accountant. If your accountant has to question everything and spend time trying to figure out what to report on your return, that’s money coming out of your pocket. And even if you’re doing your own bookkeeping, I recommend finding an accountant who can file your business taxes if you’re not familiar with preparing business tax returns.

You may think that spending that money for an accountant to prepare your return instead of just using the latest and greatest do it yourself software is saving you money, but it isn’t. Your tax accountant can give you piece of mind that your taxes are compliant and filed correctly. But most importantly they can make sure you are maximizing your deductions. And that’s very important because who wants to pay more taxes than they’re required to?

Looking for more resources to help?

Hopefully, these tips help you to get off to a great start in your new business or to get on track if you’ve been in business a while. And if you need that extra push of accountability to get your finances in order, let me know by scheduling a free consultation where we can discuss my coaching programs to see if they’d be a good fit for you. I love helping entrepreneurs be successful.

Your finances are an important part of your business and without having a process for managing them, you’ll find it difficult to grow. And you might even find yourself in trouble with tax authorities!

Be sure to sign up for my newsletter below so you don’t miss any important tips.

And keep an eye out for an income/expense tracking spreadsheet that is coming soon. You can grab this spreadsheet and implement it in your business right away, so your records are in order by the time you need to see your accountant.

Do you have a process that works for tracking your finances? Did you find this information useful? Let me know how it’s going!