“It takes as much energy to wish as it does to plan.”
~ Eleanor Roosevelt
I highly, highly, HIGHLY recommend speaking with an accountant briefly as you set up your bookkeeping practices so you understand what you can and cannot write-off in your particular circumstances.
It is incredibly important to stay on top of your finances when you run your own business. It is a skill that does not come easily for all and if it isn’t your strong suit, this may be one problem that you want to throw money at and hire a good bookkeeper. A bookkeeper can keep you on track during the year and a good accountant can sort you out during tax time. Regardless you need to have a basic understanding of your numbers.
If you are doing your own books you can create your own spreadsheet in excel and enter all of your information in manually or pay for an accounting software such as Quickbooks or FreeAgent, which help do the math for you. Alternatively, you can throw it all in a shoebox and ship it off to someone else to take care of.
Take a moment and consider which approach would work best for you.
For those of you considering monitoring your own books, I have attached a sample spreadsheet that covers the basic categories you will need to keep track of while running you own practice here –> Bookkeeping Spreadsheet Sample. It is general in nature so it may need to be tailored to suit your needs. Again check with your accountant to make sure nothing is missing.
Create a Bookkeeping Schedule: Even if you are paying someone else to enter your numbers for you, the more organized your receipts are, the cheaper it will be for you. Also if you are doing your own books, your headache will be SIGNIFICANTLY less if you keep a consistent schedule of entering in your receipts and expenses to whatever system you use to manage your books.
Create a plan and stick to it! Getting behind in your books is a migraine in the making (even if you don’t get those – this may make them start if you don’t have a plan)
Action Item: Determine what system you will use and when you will track your income and expenses. Do your own books? Hire a bookkeeper? Shoebox to the Accountant? Enter expenses weekly, bi-weekly, monthly?