How to Setup a Successful Bookkeeping System Today!

You’ve been working hard to do all the things to generate and nurture leads. It’s starting to pay off you have clients! That means it’s time to start the super fun – not – task of bookkeeping. I’ve developed a simple four step process of making bookkeeping more enjoyable.

Okay so enjoyable might be a little bit of a stretch – except that I love seeing the income coming in. And I am oddly excited to send in my quarterly tax bill because that means I earned income doing my thing at my own company. But enough about taxes – right now it’s time to set up your bookkeeping and invoicing system.

Simplify Your Bookkeeping 

I will admit bookkeep is not naturally one of my strengths. I had to develop tricks over time to find a system that worked for me and for my husband.

My husband is also an independent business owner who is fantastic with numbers but horrible with paperwork. After a bit of frustration at the haphazard way he was providing me his expenses I found a simple solution that was easy for both of us.

The irony of all of this is that I was always *that employee* the one who never turned expenses in on time and constantly had missing receipts.

The following four steps allow us to keep our bookkeeping up-to-date and makes it easy to find back up materials. And if I get a little behind this system makes catching relatively simple. (Spolier alert: I’d be lost w/out Freshbooks!)

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Steps to Setup a Successful Bookkeeping System

Step 1. We have one email account for business purchase. Any business or possibly tax-deductible receipt that is emailed we send or forwarded to that email address. Some examples include conference registrations, professional organization dues, hotel receipts, and office supply orders.

Step 2. We each have a single credit card for business expenses.

Step 3. Next to the printer is a plain brown 12-month style accordion file. ALL our paper bills/receipts for each month that are business related or tax deductible go in there. Some examples include doctor co-pay receipts, parking garage receipts, and business meal receipts.

• Our account won’t be using meals as tax deductible items following the changes in the 2017 tax package (if you don’t have an accountant yet my tips on choosing one are here) but they are still business expenses. We write the name of who attended and which of our companies paid on meal receipts for expense tracking purposes.
• I keep the 12-month accordion file next to the printer so it doesn’t clutter my desk but is easily accessible.

Step 4. The real game changer for our bookkeeping system is FreshBooks. I love FreshBooks. It is super simple to use, you can import your banking information, upload pictures of your receipts, track time and invoice clients among other things.

When I first began doing my husband’s bookkeeping I was still employed at my old job. I didn’t take much time to research options and signed up for the free trial of the traditional bookkeeping product. I think if you are an analytical numbers person that could be an option for you. But I am not. I began looking into other products and immediately after signing up for FreshBooks’s free trial I was in love!

Freshbooks vs Quickbooks

After I signed up for Freshbooks free trial – which doesn’t require you to enter your credit card information – I gave their awesome customer service team a call.

They walked me through an overview of all their tools and helped me identify the most useful tools for me to begin using immediately.  This is a very important element of setting up your business and the company’s very friendly and knowledgeable experts were a huge help to me.

As mentioned above, I tried the traditional bookkeeping program too. To be fair their customer service team was great as well. I found the layout of FreshBooks to be intuitive to use and not at all intimidating. And I wasn’t overwhelmed or distracted by too many options or shiny objects.

Time Tracking Too!

And let’s not forget about the importance of time tracking and the ability to do that in Freshbooks. Time tracking shouldn’t have been something I enjoy but I actually love it. Time tracking allows me to see if there is a return on the time I am investing in a project. I can see if a client is more time intensive then expected and that I’m under charging for my services. Or maybe I’m completing a certain type of project faster than expected opening up time to take on another client.

The key to tracking time is to create large buckets. If I break time tracking into too may categories I feel like I am suffocating myself with my own system. Freshbooks allows access your tracked time from anywhere.

Conclusion

It is important to track your income and expenses not only for your taxes but to see where the return on investment is occurring in your business. Keeping up with receipts can be a pain. Using some simple solutions such as a 12-month according file for paper receipts, a dedicated email address for emailed receipts and a single credit card for business purchases helps keep all your back up documents easy to access.

For your actual bookkeeping you can use a simple excel spreadsheet butI recommend Freshbooks.

Freshbooks is a modern and user friendly bookkeeping tool that allows you to import your checking account transations, upload pictures of your receipts, track time and invoice clients among other things.

I no longer dread keeping our books in order or tax time. I even enjoy the charts and graphs in Freshbooks that track our business growth.

Tracking your time, even if you don’t have billable clients, is important.  When you have your own business knowing how you use your time allows you to maximize your time to the greatest value.  Take the time to create large buckets to get used to the concept of time tracking.

Freshbooks offers a free trial without taking your credit card information. Give Freshbooks a try and let me know what you like best about it.

Additional Post You Might Like:

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Starting Your Business: Checklist of Must Do’s the First Week Working for Yourself