Getting Started with Bookkeeping
What if the CEO of Target walked into a board meeting and announced that he had absolutely no clue how much money the business made in the last year? I suspect that he or she would be fired immediately. It’s easy to understand why huge businesses need to track their financials: they have thousands of people counting on them to make a profit. But what about small businesses? You may be the only employee of your company. Doesn’t that mean you can be a little lax in tracking your profits?
If you said “yes,” you are selling yourself short. You deserve to know the exact state of your business just as much as the thousands who are counting on Target’s success. If you said “no,” do you know how to get started? The word “bookkeeping” can feel a bit overwhelming, so think of it in a way that feels less scary.
The mindset of your bookkeeping should match that of your business.
Think of your bookkeeping as an extension of the creative business you love. Design your system to match you and your brand. If you organize your whole business in super fun folders, set up a bookkeeping system to match. Is everything done electronically? Try a cloud-based program that automatically imports data from your bank. You are more likely to keep up with your financials if you start with a familiar process, then adapt as your business grows. Here are a few options to explore:
Excel Spreadsheet (or whichever program you own)
Paper and Pen (and your favorite calculator)
Make a Bookkeeping System Wish List, then see if any of the above options fit your business. No two businesses are alike, so look for a system that matches you. If you’re just starting out, I’d recommend using a spreadsheet program to get an idea of what your business will need in the long run. You may not have a ton of transactions yet, so give yourself time to figure out what you will need (but don’t get behind on your tracking).
Action Step - Try blocking out one or two hours on a certain day of the week to sort through your transactions. The important thing is to make regular, frequent tracking a priority. Otherwise, you will have a LOT of work waiting for you.
Have questions about setting up your bookkeeping system? Shoot me an email!