Although bookkeeping is usually associated with tax filing, doing your books is about more than that.
It's a health check up on your business. It's your time to check your cash flow, client payments and expenses.
And most importantly, it's your time to monitor how close you are to reaching your money goals and keep you motivated.
I recommend having a weekly bookkeeping date. If you wait to do it monthly, transactions build up and it will become overwhelming. My date is on Friday mornings because it feels like payday and I can treat myself to a glass of champagne afterwards. #MoneyandMimosas
If you haven't already, the first step is to sign up for a bookkeeping program. I highly recommend using Xero.
Xero has an app for the Droid and iPhone, so you can do your books on the go. It also links with your bank account(s), so your transactions automatically feed into the program. Three cheers for automation!
And if you're like me and care about design, it is the most beautiful accounting layout I have ever seen. And trust me, I've played with them all. (I am a brand ambassador for Xero, but I fell in love with them wayyyy before I started working with the company.)
The second step is to reconcile the week's transactions.
Reconcile is a fancy word for categorize. For example, your internet charge will be categorized to your "Telephone & Internet" account. Within Xero, you can create rules for your transactions. If you have a recurring monthly charge, you can set it to automatically reconcile to further reduce the manual entry. I just did this for my monthly Squarespace website charges!
The third step is to check your financial progress.
What is your monthly goal? How close are you to reaching it? This is the first week of 2016 and we all have a lot of momentum, drive and energy right now. Keep that spark alive by tracking your progress and plan the following week accordingly.
Treat yo' self to a glass of champagne.
As entrepreneurs, it is easy to jump from task to task. Take a moment to reward yourself for doing your books. Even if your finances are not where you want them to be, you still deserve to treat yourself for all the hard work you put in this week.
And now I want to hear from you! Did this post help you? Which day will you do your bookkeeping?
Let me know in the comments below!
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