Beginning a new business? Check out some 101 advice on how to start early with bookkeeping...
Beginning a business is a new start, and there’s no better time to build good habits.
In the beginning, your financials are fresh and clean. The books can seem boring, sparse even, and it may seem like it’s not that necessary, but that’s no reason to let it go. Many people begin with a spreadsheet because it’s simple enough to do the job, and I’m all for that, if that’s where you’re at. It is vitally important to track your income and expenses even from day one. I always advise my clients to begin early with record keeping. After all, upkeep is easier than cleanup work.
In the moment, we all believe, “of course I’ll remember this trip to the hardware store for the paintbrushes.” But then the day gets away, we get busy, and then the month passes by… We all know what this feels like. Six months later when you finally have a chance to catch up the books, you have no idea what you bought at the hardware store that day. I’ve done it myself (that’s how I know)!
Sure, places like Starbucks would be easy to remember—there’s really only one business expense category for what you’d buy there: Meals. But don’t get me started on Amazon, a place where you can buy anything from fake abs T-shirts to disposable drain snakes.
Waiting until six, eight months, or even a year to catch up means looking up receipts and orders long after the fact. But hunting down details takes time, and this steals away the precious days of your weekend.
Don’t let bookkeeping steal your weekend!
Form habits of writing transaction information down right away. Take a photo of physical receipts and grab screenshots of online receipts and orders. This will save you tons of time.
Your startup to do list: 1. Create a centralized, organized system to keep digitalized receipts, orders, leases, or business contracts. 2. Optional: Choose a cloud storage solution to make it easier to access this centralized system from a smart phone, tablet, or laptop. 3. Start a system either in a bookkeeping application or spreadsheet and enter your expenses and income. 4. Keep up with your bookkeeping at least quarterly and get in the habit of shuttling business documents and receipts to your storage as they happen.
Even with an awesome bookkeeper to take away most of these pesky data entry tasks, these habits are vital to getting started and being able to set up your bookkeeper for success.
Hiring full bookkeeping services still requires some attention and communication about your finances. Forming these habits earlier will minimize the questions you’ll receive from your financial support team.