If you're a freelancer, or you run your own business, bookkeeping is likely something you deal with on a regular basis. Today I'm going to share some simple tips to help you stay on top of the bookkeeping for your business.
What is bookkeeping and why do I have to do it?
Bookkeeping, in general terms, is simply the recording and storing of your business transactions - what you're earning (income) and what you're spending (expenses).
You have to keep records of all your business transactions, as well as proof that they are accurate, for example, invoices and receipts so that when you do your tax return, you pay the right amount of tax.
What do I need to do?
You simply add all of your income and expenses on to your spreadsheet or accounting software.
If you use our income and expenses spreadsheet (enter your email above to get yours for free!) you can see which information you need to enter and where.
The basic info you will need to include for both income and expenses is:
- Date of invoice/bill
- Date of payment
- Name of your client/the name of the person or company you paid
- Description of service or product
- Amount received or paid
You will also need to keep copies of proof of these transactions, such as invoices, receipts, travel tickets, bills and bank/credit card statements, for both your income and your expenses.
You can either keep physical copies of them in a file, or scan them and store them on your computer, which is what I do to save space.
How often should you update your bookkeeping records?
It's so important to update your bookkeeping records (or "books") on a regular basis, to avoid falling behind and having to spend ages getting up to speed.
That's not to say that you can't create a schedule that works for you!
Decide whether you'd prefer to update your books frequently for short periods of time, or if you'd prefer to set aside a bigger chunk of time less often to do this.
Most of my clients update their books on a monthly basis, when they receive their bank statement, as they can simply add all the transactions from their bank statement to their spreadsheet, make sure they have evidence of each one and file their bank statements and receipts etc. at the same time.
Updating your books weekly also works well, as it means that there's less of a build-up of transactions and receipts to deal with.
And that's pretty much it!
As you can see, there isn't much to bookkeeping, it's simply a case of data entry and making sure you have evidence to back up your records.
If you'd like a more in-depth guide to help you get to grips with your business bookkeeping, make sure you sign up for my FREE five-part email course, where you will:
- gain knowledge and confidence in exactly what you need to do to record your business transactions correctly
- learn how to track your income and expenses properly, so you can see at a glance how much you're making and spending, and how to save money
- create your own schedule for updating your bookkeeping records tailored to your business needs
- set up an organised system to make tracking and storing your business transactions super simple
I'm a financial coach and mentor helping female business owners to gain the knowledge and confidence they need to manage their finances successfully and have a positive relationship with money. If you're ready to take control of your finances, click below to find out how I can help you.
I also have a range of amazing resources which you can use to help improve your business finances.