Do you ever notice how it’s SO easy to avoid your business finances? Work gets busy, trying to organize your money is hard, and your business needs you to write, promote, socialize on the internet, sell stuff, network, troubleshoot problems, and answer the never ending stream of emails.
Business finances, who?
Then comes the moment when you crawl out of the busy hole to find a mess of receipts, bank statements, overdue invoices, and a sad lonely bookkeeping system that hasn’t had any love since the Ice Ages.
Never again my friends!
There’s no denying that as solopreneurs and small business owners we get busy killing it in our industry, but our business finances don’t have to suffer.
In fact, there are a few simple things you can do to organize your money, even in the busiest of times:
Separate your personal & business finances
This is the holy grail of keeping your business finances simple and pain-free. There’s a magical thing that happens when you have a separate business account- half of your record keeping work is already done for you.
In bookkeeping the first step is to figure out what is a business expense and what is not. The second step is to categorize the expenses. When you have your personal and business finances separated, you’ve automatically done 50% of the work. You already know what is a business expense. And you didn’t even have to do anything!
All you have to do is bask in the glory of not digging through old receipts and calendar records trying to figure out if that lunch 5 months ago was business or personal.
Need more convincing? Take a peek at my article 4 Reasons Having a Separate Business Account Saves You Money.
Keep everything in one place
This is like the time I found out Siegfried and Roy were gay. It was super obvious but I was still mind-blown.
Keeping all your receipts, checks, outstanding invoices, and financial docs in one place is such a simple strategy to organize your money, but how many times have you finally been ready to update your bookkeeping and then you can’t find last month’s pile of receipts? Or the credit card statement that you so painstakingly annotated?
Create a designated place for your business finances. Make this a clubhouse where personal finances are not allowed. Go the extra mile by making folders and envelopes that are labeled.
For example, keep an envelope just for receipts that need to be entered into your accounting software. Make another envelope for checks that need to be deposited and another for mobile deposited checks that you will keep for several weeks.
Create folders for accounts payable (what you need to pay others) and accounts receivables (what other’s need to pay you).
Don’t limit yourself to physical folders. Be sure you have a digital filing system for your business finances that is well organized and easy to navigate.
The next step to organize your money is to use these systems. I am the queen of making organization systems and then throwing everything into a pile on my coffee table. Don’t be me. Be you- the fabulously organized version of you.
Make notes on your receipts
Do this simple thing- every time you buy something for your business, take 30 seconds to write down 1-3 words about what you bought. Do this at the register before you walk away.
It doesn’t have to be a novel, just a few words. I write things like: “card Erin”, “Jamie referrals TY” (short for thank you if I’m buying a gift), “Grey re Workshop” (on a meal receipt), and “office decor”.
The benefit of doing this is that, if you do fall far behind on your bookkeeping, you have a small reminder of what you bought and why. This is especially helpful if your personal and business finances are mixed or if you shop at a generic store like Costco, where you can buy soy milk or ink cartridges.
Every time you receive a business receipt, put it in the same place in your wallet or bag. Don’t put receipts in your coat pockets, your pants pockets, the stroller, or any other random place. At the end of the day (okay let’s be realistic- the end of the week) take your receipts out of your special place and put them in their special envelope.
BAM! Receipt clutter managed in less than 5 minutes and your business finances are high fiving you.
Use an Accounting System that Syncs Your Bank Accounts
Technology has come a long way. We might not have talking robot butlers (yet), but we do have accounting programs that sync with our bank accounts so we can lighten up on all that typing. Quickbooks Online, Xero, and Wave are all great systems that offer this feature.
Choosing an accounting system that syncs with your bank accounts will make your bookkeeping less intimidating and help you organize your money. It saves you input time so you can quickly categorize your expenses and helps minimize costly mistakes.
This not only means you will actually do your bookkeeping but it also means that you won’t get so far behind that it turns into a black hole of ‘I was supposed to do this yesterday and somehow it’s six months later and I haven’t done it at all.’
Science is cool. Black holes of record keeping- not so much.
Need help finding an accounting program? Check out my article The Ultimate Guide to Picking an Accounting Program You Will Actually Use.