5 Simple Steps To Make Your Messy Books Manageable

As a business owner, managing your finances can sometimes feel overwhelming. Receipts pile up, expenses go unrecorded, and soon, you find yourself stuck with your messy books. Bills then get overlooked, payments are left untracked, and unpaid invoices go unnoticed.

Because of this, you may be unsure how your business is doing financially. But with a little structure and consistency, you can clear the clutter and gain the clarity you need.

The first rule of bookkeeping is to keep personal and business transactions separate by opening a dedicated business bank account and credit card. This way, you’ll know that all the money coming in and going out of the account is related to your business. No need to wonder if the pillow you purchased was for business or personal use – because, office naps 😉

Having separate personal and business finances makes it easier to track income and expenses, simplifies tax preparation, and provides a clearer financial picture of your business’s performance.

Using the right tools can make a world of difference. Choose user-friendly software like Xero or QuickBooks to track income and expenses and generate reports.

To pick the right software, assess your business needs. Consider factors like ease of use, scalability, integration with other tools, and customer support. Remember, no matter how good an accounting software is, if you can’t use it, then it will be useless.

Yes, having to keep receipts for years can be a pain, especially since paper receipts can easily get lost or damaged. If you’re still storing receipts in boxes, try using apps like Hubdoc or Dext. These apps let you scan and store receipts digitally.

Not keen on spending extra? You can use Google Drive instead. Scan or take a photo of your receipts, upload them to your drive and create folders or tags to organize them by month or category.

Regularly updating your records prevents small tasks from snowballing into a mountain of work. If you’re doing your own bookkeeping, dedicate at least an hour weekly to input transactions and categorize expenses.

You can automate this by connecting your bank accounts to your accounting software; just be sure to check that it’s always connected so you don’t have missing transactions.

To avoid messy books, set a monthly schedule to review your bank statements and compare them to the transactions recorded in your accounting software. This ensures that both records align and any discrepancies are addressed quickly.

By reconciling regularly, you can catch errors like duplicate entries, missed payments, or unprocessed transactions early on and avoid larger issues down the road.

Set a Routine: It’s easy to brush bookkeeping aside, especially if you don’t enjoy doing it. Blocking off time on your calendar each week for bookkeeping tasks helps you avoid having messy books.

Back-Up Your Data: Use cloud storage or external drives to keep your financial records safe. Guard them like your business depends on them. Because it does!

Consult a Professional: A bookkeeper can help streamline your process and provide expert insights.

By taking these five steps, you can transform your bookkeeping from a chaotic task into a well-oiled system. With organized books, you’ll have a clear picture of your business’s performance, save time, and reduce stress during tax season.

Need assistance getting started? As a virtual bookkeeper, I help small businesses sort out and organize their books. If you’d like me to help clean up your messy books, just reach out!