If you’re a business owner of even the most tiny business, you should be practicing good bookkeeping skills, which basically means keeping track of your financial records. Don’t let the funny term “bookkeeping” confuse you. I’m just talking about recording, in written or electronic form, your expenses (ALL your expenses!) and your sales revenue. And I don’t mean stockpiling receipts in a shoebox!
Total side note – I used to love reading Encyclopedia Brown books as a kid and specifically remember one story that involved some sort of spelling bee and the word “bookkeeping”. Apparently it’s the only English word that has 3 sets of double letters right next to each other – b OO KK EE ping… get it? A clear sign I’d become an accountant and a nerd as an adult, right?
We drag our feet a lot when it comes to bookkeeping. But at the end of the day, the better your bookkeeping system, the better position you’ll be in come tax time, and more importantly – the better picture you’ll have of your business’ financial health at any given point.
You can’t really know your business’s overall expenses, profit, or just plain ole financial success if you are not recording things. You can’t just log into your Etsy dashboard and look at that pretty revenue number and assume you are rolling in the dough.
Can you imagine Apple not knowing if they even made any money this year? That is basically what you are doing if you aren’t keeping track of these things.
I’ve got tons of info about why bookkeeping is not just important but beneficial to you in my free guide here. I trust that if you’re in doubt, you’ll take a glance at it. So I’m not going to spend time here convincing you!
What’s the best bookkeeping system for a creative like me?
Here’s my mantra around here – the best bookkeeping system is the one that you actually use and consistently keep up-to-date. You have many options to choose from, so do some exploring and find one that works for you and your work-style. Here are just a few popular options to explore:
- Quicken Home & Business
- QuickBooks (available as downloadable software or online)
- Freshbooks (online)
- Wave (online)
- GoDaddy (online, renamed from the popular Outright)
- Spreadsheet system (via Excel or whatever is on your computer)
- Paper + Spark spreadsheets, brought to you by yours truly
- Paper notebook/ledger and your trusty calculator
The nice thing about computer programs or online software is that they can automatically download financial data from your bank account, Paypal system, etc and sort it for you after a bit of setup. Several of the options above also offer more than just simple bookkeeping services; you can set up client invoices, perform payroll functions, and lots more.
That’s pretty cool, but if you’re just starting out, I’d recommend either using a spreadsheet or the free version/trial of one of the options above. Unless you are a super hustler, you probably don’t have tons of transactions to keep track of in the beginning and don’t need to spend tons of money on an option that offers more bells and whistles than you need just yet. Start small if you need to and you can expand your system as needed.
Stop using that excuse that you hate numbers or you aren’t good at math.
It’s time to stop making excuses and change your opinion on bookkeeping for your biz. You’re creative, right? Think of your bookkeeping system as an extension of the creative “fun” of owning your own business. You can “design” your system to be a reflection of you and your brand. Want a color-coded spreadsheet with fun fonts? Go for it. Want some fun, colorful folders to keep track of your receipts and financial paperwork? Make it happen.
I’m tired of hearing the excuse that you aren’t good at math. GUESS WHAT. Someone invented a calculator! How nice of them! Plus, dealing with your finances pretty much only requires simple adding and subtracting. Nobody is asking you to do long division here, y’all. It’s time to build up the habit.
Most creative biz owners have success with setting aside an hour or two on a specific day of the week each week to update their books. Figure out what works for you, but the important thing is to make it a priority to dedicate time to doing this frequently. If you avoid updating your financial records for a while, you will have a lot of work waiting for you and will keep wanting to push it off. (BTW – if you need help with the whole “staying on top of it” thing and you tend to procrastinate – check out the Accounting Accountability Club!)
Don’t make the mistake of waiting til your taxes are due to compile all your financial data. Not only will that be super stressful for you (or your accountant), but you’ll probably miss out on lots of awesome tax deductions since you’ll have forgotten many of your expenses that year and/or lost the receipts or records for said expenses since you weren’t keeping track during the year. If you’re ready to being a creative bookkeeping boss, make sure to get your free bookkeeping guide here.
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I used to use Outright then when I changed banks the log in system at my new bank had more security questions and totally freaked Outright out. So now, I use a basic check book ledger and work on my accounting once a week. I totally hate it but I’d rather hate it for a small amount of time than for an entire day.
Honestly I use an Excel spreadsheet for all my bookkeeping and financial reports and I’ve been doing that just fine for the past 3 years! Whatever works as long as you keep it up-to-date! And I agree, I’d rather do a little bit each week than spend a whole stressful day on it at the end of the year. It also helps you know how your business or personal budget is doing!
What great advice. I will definitely be back for more tips, as I just started my own business!
Thanks for reading Jena and good luck with your new biz!
Loving the note books. I want some… If only I needed more right now.
Thanks Erica! Honestly when does one NOT need more notebooks? Or pretty pens? Or pencils…I could go on 🙂
Great post. I really need this information.
Love seeing how other small biz owners stay organized! Super helpful information for those of us (me!) that hate bookkeeping 🙂
What an awesome idea to post about. Super helpful and informative. Thanks!
I am so bad about keeping up with my finances! Thank you for the post!