When I first started my business, I kept track of my own receipts–income and expenses–in a very rudimentary way. I was only seeing my own clients sporadically, on a part-time basis while I was working a job, so this was sufficient.
Once I transitioned by business to full time, the tracking became more complex and cumbersome. I hired an accountant to do my taxes but still kept the task of recording my income and expenses on a two-column sheet of lined paper.
I hated dealing with it every month and at the end of every year. It took a long time and it was not something I enjoyed or was good at. And as my business grew, as I added more expenses and dealt with several business credit cards, the complexity became overwhelming. Eventually I realized it was time to hire a book keeper to help me.
If you're in this boat right now, read this article by one of my mentors, Kendall Summerhawk, to learn some simple things you can do to make this task more manageable until you are ready to turn over your books like I eventually did.
Recently, I was chatting with a friend of mine — a therapist and coach with a busy, private practice. She groaned as she shared that she wasn’t seeing any clients for an entire week.
I was dumbfounded. "Why?" I asked her.
Because she needed to spend all of that time getting her receipts and bookkeeping ready for her accountant, in order to prepare her taxes.
I looked at her, and asked one question: "So how much is it costing you in lost business, to do your own books?"
She looked back at me in shock, her mouth forming a perfect "O", as she said, "O.M.G.!!!"
Bookkeeping, taxes…I get it. They’re likely not be your favorite topics. But by following a few simple tips you can sail through keeping your books in order, with minimal time spent each month.
While I’m not an accountant or a bookkeeper, I HAVE developed simple systems that make it easy for me to keep my books in order, in just a few minutes per month.
Want to know what I do? Here are 5 of my easy-to-follow tips you can start using today, so that when tax time rolls around next year, you’re all set and ready to go. )
Tip #1: Ditch The “Receipts Shoe Box”
Throwing your receipts into a shoe box, thinking you’ll “deal with it later” just creates chaos…and a nagging to-do item on your already full agenda.
Instead, what I do is immediately put all receipts into ONE single folder. Every 2 weeks my bookkeeper collects the folder and enters everything into Quickbooks®. She then files each receipt into the appropriate folder, alphabetically (we have 1 folder per letter of the alphabet).
For her remote clients, she has them substitute a big mailing envelope for the folder. Every 2 weeks they seal up the envelope and mail it to her. She enters everything into the online version of Quickbooks®, alphabetizes the receipts, and mails them back, all ready to tuck into their appropriate filing folder. Done!
Tip #2: Save Time By Labeling As You Go
While I do track every expense to the penny, I don’t go crazy by having lots of different expense categories. I’ve found it’s far easier to keep things simple and basic.
So, what I do is when I print a receipt, or pull one out of my purse, I write the expense category name at the top, then slip it into the single folder I shared about above. Category examples include: marketing, training and education (that’s where I log mentoring and training programs I invest in), website, supplies, books, etc.
This way, my bookkeeper knows exactly how to record the purchase, and I don’t have to think about it again.
Tip #3: Use Online Resources
I shop online as much as possible, which saves me time and makes tracking simple. When the receipt lands in my inbox, I hit “forward”, sending it to my bookkeeper with the expense category typed into the subject line. She then prints it out for filing later. Total time for me? About 2 seconds. Sweet!
We also save tons of time by using online banking for everything from paying bills to downloading the credit card and monthly bank statements.
Tip #4: Let Go Of the Guilt And Please, Just Hire A Bookkeeper
Even if you’re new in business, your time is STILL more valuable than the minor expense of hiring a bookkeeper. Even if you only have a few clients, trying to do your books yourself means you’ll end up spending more time than you realize…plus, you’ll find yourself hating every minute, or you’ll do what my therapist friend did — let the task pile up until tax time, when it’s a mountain of paper to have to deal with. Ugh!
Plus, consider this: If you have “money mess” with your bookkeeping, what message does that send to Spirit about your willingness to be financially successful in your business?
Tip #5: Put On Your Big Girl Pants And Look At Your Numbers
I know…it’s a lot more fun to think about helping clients and mastering your craft. But the truth is, sticking your head in the sand or proclaiming, “I just don’t relate to numbers” isn’t empowered…or even very grown up.
So take a breath…let it out…and vow to step up into the empowered woman entrepreneur you secretly desire to be. Because being in business is about listening to the story your numbers are telling you…and making course corrections along the way.
I recommend starting by looking at a monthly “profit and loss” statement. It’s simple, and HIGHLY illuminating. I promise that by looking at this important snapshot of your business, you’ll find yourself making empowered decisions that give you MORE confidence, day by day.
Your books are the financial heart of your business and incredibly easy to master. So, my entrepreneurial friend, which of these tips will YOU implement first?
"Would you like to learn simple ways you can brand, package and price your services, quickly move away from 'dollars-for-hours work' and create more money, time, and freedom in you business? Check out Kendall's web site for free articles, resources and to sign up for her free audio mini-seminar "Money Blocks & Breakthroughs."
Award-winning, million dollar marketing coach Kendall SummerHawk is the leading expert in women entrepreneurs and money.
Do you need help learning the basics of running your business like a business? Schedule a complimentary MMM Strategy Session with me to identify what old ideas, beliefs & skillsets need to change and IMMEDIATE steps to take so you can get more clients and make a difference in more lives!
Your partner in success,
Marketing, Mindset & Manifesting Coach