We’re well into January now, and if you made any new year’s resolutions, your commitment may already be starting to wane. Yesterday at OnlineOrganizing.com I blogged about Using Technology to Track Your Weight Loss Program, and today I’ll offer some suggestions if your goal is to get your finances in order.
I hope that you already have a system in place to track your business income and expenses for income tax purposes. If not, this should be one of your top priorities! QuickBooksis the most popular financial software on the market, and their “QuickStart” version was especially designed for users with no accounting background.
However, unless you’re just getting started, lack of software is probably not the reason you’re behind in your bookkeeping. Many business owners lack the time, interest, or expertise to carry out this type of work, and it’s often the first task to be outsourced. I’ve been having my bookkeeping done by GHVA member Jennifer Kubilis for several years now, and it’s one of the best decisions I’ve ever made.
Once you’ve chosen a bookkeeper, you’ll need an efficient way for transferring paperwork back and forth. I use two expanding vinyl file folders with four sections, which I use for Income, Expenses, Statements, and Withdrawals/Transfers. One folder stays with me for collecting current receipts, and the other is with Jenn. I like them because they’re durable as well as portable, and I don’t have to worry about any papers falling out. When Jenn has finished entering one set, we trade, and I file the completed paperwork by month. You might prefer to file by date; I don’t think it matters, as long as you’re consistent and you can retrieve any required documentation when needed.
Another option is the Big E-Z Receipt Storage Book, a sturdy coil binder with 12 storage envelopes, which allows you to easily store your receipts by category or by month. Using this in place of the expanding files that I use would eliminate the need to sort before transferring the paperwork to your filing cabinet.
If filing space is scarce, you might want to consider Shoeboxed, an online platform for organizing receipts. You simply mail in your receipts, and your documents will be scanned and uploaded into your account. Receipts are automatically placed into 15 common tax categories, and are sortable by store, date, and total. In addition to working with your receipts online, you may download them into Excel or Quicken or into CSV or PDF format. On their website it states that Shoeboxed meets IRS requirements for electronic storage of receipts, but I don’t know whether the same is true for the Canada Revenue Agency.
Tracking your business income and expenses isn’t just for taxes! It’s the best way to determine how well your business is doing, whether you’re charging enough for your services, and so on. As in so many areas of business (and life itself!), the key is to have a system that works well for you, and to use it consistently.