Running a small business as a money-minded, one-woman CEO, means wearing many hats—including that of a bookkeeper. But managing your business finances doesn’t have to be complicated or intimidating. With a straightforward approach to tracking expenses and reconciling accounts, you can take control of your bookkeeping and finances like a pro.
Here’s how to do your own bookkeeping, even if you’re not a finance expert!
Step 1: Organize Your Expenses
The foundation of good bookkeeping is keeping track of where your money goes. Categorizing your expenses helps you see what your business spends money on, stay prepared for tax season, and make smart, strategic financial decisions.
How to Categorize Expenses:
Set Up Categories: Consult with your personal CPA on how to categorize your expenses. The most common types of categories are marketing, supplies, professional services, operating expenses and travel. Choose labels that make sense for your business type.
Use an Accounting System: Whether you prefer software like QuickBooks, FreshBooks, Wave, or a well-designed spreadsheet (like the one inside The Efficiency Lounge), choose a system that you are able to operate, read/understand, and fits your needs.
Be Consistent: Assign recurring expenses to the same category every week for accurate tracking.
Review Monthly: Regularly review your expense categories to adjust or correct anything that seems off.
Step 2: Track Income and Payments
You can’t manage what you don’t measure. Track every sale, payment, and incoming deposit in your bookkeeping system. Record these transactions as they happen to avoid year-end stress. And don't forget to track all of those merchant fees as an expense if customers are paying you with a debit or credit card.
Step 3: Reconcile Your Accounts
Reconciling your accounts means comparing your bookkeeping records with your bank statements to ensure everything matches. This step catches mistakes, missing receipts, and even unauthorized charges. I caught one certain online retailer that we all (mostly) know and love charge my credit card for a purchase I made 3 months earlier that was even returned!
How to Reconcile Accounts:
Gather Records: Collect your bank statements, receipts, and expense records.
Match Transactions: Compare each transaction in your bookkeeping system to your bank statement.
Investigate Discrepancies: If something doesn’t match, dig deeper to find out why. Common issues include duplicate entries, forgotten receipts, or incorrect amounts.
Correct Errors: Adjust your records once all discrepancies are resolved.
Stay Consistent: Make reconciliation a monthly or weekly habit for a clear, up-to-date financial picture.
Bonus Tip: Save Time with a Custom Bookkeeping Spreadsheet
Doing your own bookkeeping doesn’t have to be complicated or time-consuming. Inside The Efficiency Lounge, you’ll find a custom-built accounting spreadsheet designed to simplify your bookkeeping tasks!
Here’s what makes it a game-changer:
Pre-set categories for common expenses.
Automatic calculations and totals.
An instructional video to teach you HOW to use it yourself
Take control of your business finances with ease! Join The Efficiency Lounge today for instant access to this powerful accounting resource and more tools to streamline your small business operations.
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