By far, one of my least favorite parts of running my own business is making sure that I stay on top of all of my accounting (you know, invoices, expenses, etc.).
It really doesn’t matter what sort of business you run… accounting is part of the big picture. Whether you make jewelry or offer graphic design services, you’re still running a business. And obviously, money is a big part of what makes a business tick.
So, even though I don’t particularly enjoy the numbers and money side of things, I’ve come to accept basic accounting as one of those necessary evils of running my own creative business. It’s all been a huge learning experience (especially since I’ve never liked math). Today, I wanted to share a few helpful tips about how I keep my accounting organized. If you run your own business, or are looking to start one, I hope these help you start off on the right foot in regards to your business finances!
One of the first things I did when I started my business was set up a separate checking account specifically for my business. This is where all of my business income is deposited. Additionally, I got a debit card in order to make business-related purchases. Keeping all of my business transactions separate from personal ones is really helpful for getting a clear view of both my personal and business finances. Plus, it keeps my tax guy really happy.
Another one of the first things I did was purchase Quickbooks. I absolutely love this system for keeping my accounting in order. I can create invoices and estimates. I can log my time for clients that pay by the hour. I can track my expenses and mileage. It’s like a one stop shop for all of my accounting needs. However, it is a bit on the pricey side. So, although this system works great for me, don’t feel like you need to run out and purchase it immediately. If an Excel spreadsheet works well for you, don’t hesitate to use that! The important thing is finding a system that really works for you, so that you’re keeping track of all of your necessary accounting items.
This has really been a hard thing for me to get in the habit of. When you’re a business owner, you need to remember to track pretty much everything. Not only can I track what I paid at the post office as a business expense, but I can also count my mileage to and from the post office. Get in the habit of ending each day by asking yourself if you’ve made any business-related purchases or trips that day. If the answer is yes, make sure you log the necessary expenses and mileage. It can be a bit of a pain, but tracking every little expense is a real savior come tax time.
While tracking everything is important, you also need to have proof of these purchases. So, keeping your receipts is necessary. The first thing I do with a receipt is log the expense (including the date) into Quickbooks. Then, I file it away in an accordion folder that is separated by month. That way, I can easily find any receipt I’m looking for if I ever need to reference it again. When a year is wrapped up, I take the whole pile of receipts out of the accordion folder and store them in a colorful plastic envelope labeled with the year. So, if I ever get audited (Lord help me), I have receipts from previous years organized and ready to go as well.
This is more of a general tip. But, being obsessively organized in regards to your business is so helpful in the long run. Be meticulous with keeping the backend of your business organized and streamlined. It can seem like a lot to stay on top of (and, trust me, sometimes it is!). However, taking the few extra minutes here and there to keep things orderly will save you many headaches down the road.
Do you run a business? What accounting tricks have you found along the way?
Until next time!