It's not a fun task for most of us, but it's certainly an important one: keeping track of expenses and payments. Business run on money, as I'm sure you're well aware. And that means that you have to know how much money is coming in and going out.
Start treating your business as a business.
This isn't simply for tax purposes, though that's certainly important. When you start treating your business as a business, you'll start paying more attention to where all the money goes and why.
- Set up a separate bank account
- Save all your receipts
- Save for taxes and business expenses
- Keep track of how much you spend for each project
- Pay for anything business related from the business
Basically, if you don't have the money in your business, don't spend it on the business. Especially as a small, one woman shop, I make sure that I have the money to spend before I start buying things. This means that I have to make enough money to cover taxes, savings, business expenses, and paying myself.
Putting in the time to get systems for saving, spending, and tracking your finances up front will save you hassle and stress in the long run. And if you have everything organized, it's a lot easier to hand it off to an accountant without worrying about spending an arm and a leg on the time it takes them to figure out your mess.
A note on services for trade.
I'm all for trading services if you and another person can benefit one another without having to spend actual dollars. But I do reccomend that you to it the right way.
- Quote one another based on the work you'll be doing
- Set a contract in place and treat them just like any other client
- Note how much you've "billed" them and how much you've "spent"
Doing this will give you a better idea of the amount of work you're actually doing and the value of the service you receive. Even if no money changes hands, you're still giving value to get value back. LaKay of The Perpetual You talks more about this in her Inspired Online interview, and I highly recommend you watch it.
Need some help?
I've created a financial planner that helps me keep track of financial goals, my budget, and my spending. I'm sharing it with you to give you a head start for the new year.