I know, bookkeeping isn't the most exciting thing to do!
However is vital to keep your business running!
If your like me you don't like to even think about your bookkeeping. Never the less their are a few things you just need to do in order to have your financial stuff under control.
So let me show you what I do to keep my books organized and my business flourishing!
Get some systems in place and start relaxing.
So let's start!
Do you know the basic rules of bookkeeping?
That's great! Ask your accountant to let you know if some laws are changing, so you’re always up to date!
Then you should invest some time in learning some basic bookkeeping skills! Even if you let someone else do your bookkeeping, you need to make sure you know how it works to some extent.
As a business owner you’re always responsible even if someone else is handling it.
So start right now! Get a book, sign up for an online course or ask your accountant to teach you the basic bookkeeping skills! Don't procrastinate!
Do you prepare your paperwork for your accountant? Or do you have someone to do that for you?
Ask your accountant how you should prepare the paperwork for them!
If you have someone to do this for you, ask them to join the meeting with your accountant. Make sure not only your helping hand knows how to do the paperwork.
Check on your numbers every month, this means keep an eye on all the expenses and all the money coming in!
Keep an eye on all the taxes you need to pay!
Make sure you know what’s happening all the time.
If you have someone to help you with those tasks make sure to check in what they're doing from time to time!
Do you have an accountant?
If you don't have an accountant, you should really get one!
The only case that I can think of that you don't need to have an accountant is when you are an accountant yourself!
So in all the other cases get one!
You don't need to let them do all the bookkeeping, but you should be having the right person to ask questions to! You should at least let them check your paperwork from time to time!
Sometimes it can be hard to find the right one. When you have the feeling that this is not the right accountant for you, follow your guts! If it doesn't feel right move on and keep searching.
Do you know which paperwork you need to collect?
Ask your accountant what you need to collect!
Every country has got different rules, so make sure you check the laws in your country!
Do you know how long they need to be archived?
Ask this to your accountant too, they know exactly what you need to do.
Ask your accountant to inform you if the laws are changing and put a reminder in your calendar to ask the accountant about changes! Just to make sure you won't missing any changes.
Are your familiar with all the taxes you need to pay?
Ask your accountant if you’re not sure!
Do you know how much money you need to cover your private expenses?
Do you know how much money you need every month to make a living?
You know it probably roughly, but not in detail!
Now is the time to get clearance on all the financial commitments you have.
Track your money at least for one month!
It is such an important thing to know, so grab a little notebook and start writing down every cent you spend!
Every payment method counts! Checks, credit card, cash, maybe you use more payment methods, they all add up! Write down everything for at least one month! Ask your partner to do the same, maybe you need to track your kids spending patterns too.
You absolutely need to know how much you’re paying on bills, taxes, food and all the other things you need in life. If you have a partner it would be wise to do this together, at least if your supporting each other financially! Write down all the things you need to pay on a monthly and yearly basis.
Don't skip anything!!!
Don’t forget your insurances, your car, rent or mortgage payments, all your debts, food expenses, health care, everything you consume and use.
Write down everything you need to buy for your kids, all the little things like diapers,..., don't forget the big things like childcare and school fees. At the end of the month transfer all your insights into a spreadsheet, so can see what you’re spending in one overview!
Do you know how much money you need to cover business expanses?
After you found out how much you need to cover your private expenses, you need to do the same for your business! If you’re just starting with your business, do some research on what you will need and how much it costs!
Also include investments you need to make in the future.
Al the expenses for traveling, your employees,...
Open up another spreadsheet for all your business expenses.
Do you know what percentage of your profit you have to put aside for taxes?
Ask your accountant how much you need to put aside and what's the best way to do that!
Every country has different rules, so make sure you know how the tax-system works in your country. Make a saving-plan for your business, so you have enough funds to pay your taxes!
A lot of small businesses can't proceed, not because they don't have clients, but because they didn't saved the money they need to pay for taxes!
So you need to make sure you know how much money is yours and how much is not! Don't make the mistake!
Did you plan your financial goals for the next two years and how you want to achieve them?
If you don't have a plan start creating one today!
Take a look at how much you need to cover your private expenses, how much you need to spend for your business, where you want to be in your business in two years and what you will need to do to achieve that.
Write down everything you will need to pay in order to achieve your goals.
After you wrote down all the things you need to pay, make a detailed plan on how you’re going to achieve your goals!
Integrate in your planning how much money you want to earn too!
Divide your plan into three sections; a 6 month plan, a one year plan and a two year plan!
Make the 6 month plan as detailed as possible.
If you have no idea how to do that, find a coach or a business consultant that can help you! This step is really important, because you won't achieve anything if you don't know where you’re going!
You might wonder how the heck you’re supposed to pay for a coach when you’re just starting out!
If you can take a side job to earn the money to hire a coach it will be worth it! Especially in the beginning, a coach can help you overcome some problems quicker, so you’ll have a more profitable business quicker!
So there you have it!
I hope you have learned something new!
If you have any questions I would love to help you! Just write me an email!