3 ways to make bookkeeping easy & save money
Debits and credits??? Ain’t nobody got time for that! That’s how most business owners feel right? It’s so tedious! I’m not a numbers person. I don’t understand bookkeeping; does it have something to do with books? Well…sort of. lol Unfortunately, it’s something that is required for EVERY business. Bookkeeping helps you stay organized, stay tax ready, and know how the money you’re bringing in compares to the money you’re spending. SO… with that said. Here are 3 things you can do to make bookkeeping easy and save a pretty penny (if you are not able to delegate this task yet).
Keep your business and personal funds separate. I know. It sounds simple right? It is. But for some odd reason, people don’t do it ! OMG! After 17 years in the accounting field you would be surprised how many solopreneurs I’ve come across that can’t get’er done. So what do you do? First, it helps to have at least two accounts. One for business and one for personal. Then two…only use the checks/cards for the business account for business transactions and vice versa! If you need to “pay yourself” you can transfer money from your business account to your personal OR write yourself a check from your business account to be deposited to your personal account. If you want to invest some money into the business you write a check from your personal account to your business account. ALWAYS ALWAYS ALWAYS keep your business and personal funds separate. At the end of the month or year your CPA or tax preparer will thank you for it and you won’t have to pay them $100/hr to do it for you!
Use accounting software. Oh dear. I can see your face now. Those three little words felt very overwhelming I’m sure. It can be but have no fear it doesn’t have to be. SO. The beauty of accounting software these days is that it does a lot of the work for you…behind the scenes. You put in info, it calculates info, and you get your info in reports. Easy peasy. No, for real. And check this out….there is even FREE accounting software that can actually get the job done quite well! Check out My Fav DIY Accounting Software. You can use your accounting software to send invoices to your clients, collect money from your clients, and make payments to your vendors! And when done regularly, you will always know how profitable your business is. Which leads me to my next point.
Do your bookkeeping tasks regularly. Some things should be done every day…like receipt scanning right after you make a purchase, but at the bare minimum… Do your bookkeeping at least monthly! At the end of every month, make sure you have a record of all of your business purchases and that you have invoiced or received payment from the clients you have served this month. Bank feeds into your accounting software can help with some of this. Then balance your checkbook or as we like to say in the accounting world, reconcile your bank statement to get an accurate picture of how much money you have and what your cash flow looks like.
Bookkeeping doesn’t have to be hard. It’s like everything else. Small steps (at least monthly!) will save you time, money, and headache in the long run. And guess what? When someone needs to receive reports on the well-being of your business (like say an investor), you will be prepared. So. Like Nike says….just do it! Ciao for now…Allison