Bookkeeping for the Rest of Us

By Fairy Godmothers | Published June 23, 2010

So you made it through tax season…now what?

Every year after tax season, small business owners unanimously proclaim “next year will be better”. No more boxes of unorganized receipts, rushing to gather the necessary documents for my tax preparer, and I will not file an extension simply because I wasn’t prepared.

Fabulous – but how? Here a few tips to get you started.

1. If you don’t already have one, open a small business checking account. It is a lot easier to go through your checkbook at the end of the year and pull out business expenses if they are not co-mingled with trips to Wal-Mart for milk or gas station fill-ups on the way to drop the kids off at school. At the end of the year you will know with few exceptions that what came out of your business checking account was a legitimate business expense and what went is was income.

Several banks offer free business checking accounts. If you are doing business just under your name for now, open a separate free personal checking account at your bank – just for your business income and expenses.

2. Reconcile, Reconcile, Reconcile. You should reconcile your checking account every month. This is the best way to review your cash flow and know at the end of each month where you stand. You can use accounting software or reconcile by hand. At the end of the year you will only need to review December’s expenses because the other eleven months are already done. You can be confident that your records are clean and accurate and your tax preparer will trust the numbers you give them that much more.

3. Plan and Make it Happen. Admit to yourself that bookkeeping is a necessary evil of any business. Very few people enjoy doing it so you are not alone. Set aside one evening a month, or one afternoon a week and review that week or months business. I always do my bookkeeping on Wednesday evenings after dinner. My husband knows that it is his night to get the kids ready for bed and I can spend a few hours reviewing the check register, invoicing clients and sending thank you notes. It is now part of our routine and my business is better for it. I am more aware of where my business is financially and my CPA is grateful for the effort.

Lindsey Patrick Start this month before the receipts pile to high and you may just look forward to tax season. You are welcome to contact me at 801.362.4206 or lindseypatrick1@yahoo.com with any bookkeeping/accounting questions, I would love to help.

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2 Responses to “Bookkeeping for the Rest of Us”

  1. Tweets that mention Bookkeeping for the Rest of Us -- Topsy.com on June 23rd, 2010 8:09 am

    [...] This post was mentioned on Twitter by Kelly King Anderson, Gretchen Glasscock. Gretchen Glasscock said: Bookkeeping for the Rest of Us: So you made it through tax season…now what? Every year after tax season, small bus… http://bit.ly/cB1146 [...]

  2. Deb Howard Greenleaf on June 23rd, 2010 8:22 am

    Lindsey: Great article with some solid advice!! I would add just one thing: set up a filing system that you like and stick with it. Whether it’s file folders for each month or one for each vendor, it will save you hours of time at year-end if you can eliminate the “find all my receipts” step from your to-do list. An added bonus of keeping track of your receipts throughout the year is that you will probably end up with more expenses — and more tax deductions — by filing them as they occur rather than relying on your memory nine months from now! – Deb

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