You dread the words recordkeeping and reconciliation. You wish there was a bookkeeping wand. The words TAX TIME lurk in the back of your mind like a nightmare.
Sound familiar? Even I was glum when I noticed my lazy bookkeeping habits the first few months I was in business! But, I picked myself up, followed my own advice, and developed a method to keep my records painlessly.
“If you aren’t ready to keep good records, you’re better off not having a business.” Diane Kennedy, CPA says in her newest book, “Smart Business, Stupid Business”.
Recordkeeping is not hard, overwhelming, time consuming, or boring! It is a part of the flow of your business just like your twitter time is.
Here’s the process I use. If you have employees or inventory, there are a few extra steps you will add. If you have an assistant, note which parts are her responsibility.
DAILY
MAIL – sort it over the garbage can.
- Junk mail—garbage
- Envelopes and mail stuffers –garbage
- Bills- in box
- Checks-record in deposit book
- Promotions that have merit –in box
TIME TRACKING: I use a Quickbooks time sheet to record time spent on client projects
PURCHASING: online purchases are entered in my Quickbooks check register as soon as I hit the “finish” button
DEPOSITS: I total my deposit slip and clip my checks together. I stop at the bank on my way home.
WEEKLY
BOOKKEEPING: Friday is my day to deal with the in box:
- PAY BILLS.
- INVOICE CUSTOMERS.
- RECONCILE bank statements within the week they arrive.
- FILE All invoices/check stubs/deposit slips/bills/bank statements.
MONTHLY
REPORTING: Answer questions like the following:
- How much money did I make this month?
- Which offerings make the most money?
- Which clients are the most profitable?
YEARLY
TAX TIME is easy once the system is running smoothly
- Print reports.
- Bring them to the tax preparer.
- Done. Relax and enjoy the feeling!
All businesses must have a structured way to keep the books so first-class information is available as needed. I enjoy the systematic process, and you can too.
Take time now to record your process. Put daily, weekly, monthly, quarterly, and yearly duties in a checklist format.
One last benefit: it’s easier to hire and train an assistant when your process is written down.
Bookkeeping does not have to be long and boring. Make it a part of your everyday activities and notice that you have more time and less worry. I bet you’ll find you’re more productive.
How has this article inspired you to revisit your bookkeeping process?
Tags: Bookkeeping, Business, Filing, Recordkeeping, Starting a business
