1. It ain’t personal- Get a business bank account and run every purchase through it. Don’t use your personal account for business and vice versa. It will make tracking so much easier.
2. Find a method and stick to it- It doesn’t matter if you use a simple spreadsheet or fancy software. Just find a method of tracking your assets, income and expenses and stick to it. Update it often to see trends and at the end of the year doing your taxes will be so much easier.
3. Collect-Send invoices out each month on the same day. Put a big dollar sign on your calendar if you have to remind yourself. If you are using an accounting program, you can set it up to send out invoices. If you are still creating old school Word Invoices make sure that your clients know that you would like to get paid and if they don’t pay, remind them. Everyone has a million things on their plate, so don’t assume they are purposely withholding funds. Be nice but firm.
4. Keep your receipts- Unless the IRS shuts down its doors tomorrow, you have to hold on to your receipts for at least 7 years. So, take advantage of free/low cost storage via Google Drive or Dropbox, invest in a cheapo scanner (or snap pics with your smart phone) and start saving your receipts. If the IRS ever comes a’knocking then you will have proof readily available.
5. Back it up- Do you enjoy spending hours rebuilding your accounting spreadsheets or program? I didn’t think so. Spend five minutes a week backing up your information. You. Are. Welcome.
6. Money Honey- Here is the rule, if it doesn’t make you money, then you shouldn’t be doing it. Spend time on things that bring in the bacon and find people to outsource the things you don’t love. Hate tracking your finances? Hire a bookkeeper. I happen to know a great one.