To end the Business Systems Series, I’m going to help you set up the not-so-fun part of your biz: accounting. Keeping track of your income and expenses is one of those tedious tasks that everyone dreads. At least I know I do!
I’ve streamlined my accounting system as much as possible so there’s no scrambling to get everything together months later. The best part about this post? You don’t need to spend any cash getting your accounting system together. You track your income and expenses, totally free!
Keep a folder with receipts
I find it helpful to have a Google drive folder to keep track of all receipts. I’m all about going digital – it’s much harder to look through stacks of paper than it is to find a perfectly labeled folder. If you purchase something in person (like office supplies), scan the receipt in and add it to the folder.
You can set your inbox so that anytime you get your monthly invoices, they go right into a dedicated folder for invoices. Then, all you have to do is move them over to your Google drive folder. Trust me, I know it’s a paid to keep track of all expenses but you’ll thank me when you’re filing your taxes!
Use a (free!) accounting software
You want to start using an accounting software BEFORE your accounting becomes overwhelming. I use Wave because it’s free and does everything I need it to. It keeps track of everything that comes and goes in your bank account and links with PayPal. It’s so much easier than keeping track of everything on a spreadsheet!
I really like the reports feature because it breaks down your income, expenses and calculates your net income(income after expenses). It also breaks your income down by separate revenue streams (affiliates, coaching, courses, etc.).
Create an accounting day
Take the first workday of every month (or whatever works for you, but stay consistent!) and update any income and expenses you have from the previous month. You can spend this day moving over your online invoices to your Google drive folder and looking through your accounting system.
Keeping track of your income and expenses every month isn’t enough. Actually pay attention to where your money is coming from and going. Checking this on a monthly basis can be eye-opening. You may notice that one of your coaching programs is bringing in a significantly less amount than another and can re-evaluate its positioning.
This post is short and sweet because there really isn’t that much that goes into your monthly accounting! The only time it gets to be overwhelming is if you don’t create a system and let it pile up. If you set up an accounting system, it will be a quick (and painless) process.