Putting my money in order
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Last week I sorted out my marketing priorities. I've got to conquer my email marketing, and I set up a schedule to make it happen. I sent out a Last Minute Appointments email yesterday, (got one booking already) and I'm almost done my October email. I need to proofread it later today, I'll share it with you on Facebook after I send it to clients this week.
It appears I have email (mostly) under control, so what's next?
Paperwork. Specifically, receipts.
No, it's technically not marketing, it's business management. But I'm going to let this squeak by.
I'm on a mission to get all my tax stuff together before I go away for a few weeks in January. I want the meeting with my accountant to be smooth and settled by the end of February. My receipts have been piling up for months and I need to put them in order and verify that I've got everything categorized properly. How am I going to do it? Well, I'll schedule it, of course! I've blocked off 90 minutes to tackle it later this week, and another hour early next week.
I'm curious how you organize expenses
I used Quicken for a few years. Then I tried QuickBooks for a year (hated it, it's not for me). Now I'm in iBank but I'm anxiously awaiting the release of the Mint Home and Business that was in beta testing this summer. But I've never found a system that works really great for me.
What do you do?
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Don’t make fun of me. I use pen and paper, a hanging file folder, and folders. Anytime I try to “organize” everything on a computer or with a computer program I get frustrated, lost, and spend WAY too much time on it. I have a piece of paper for each month, with all the same info on it: rent, phone, advert, postage, printing, internet, etc, etc, etc. I write the unchanging ones for the whole year, then at the end of each month I total the postage receipts and put them in a folder. Same for supplies, printing, etc. I staple my income log for the month to the paper. I’m sure there is an easier way, but this only takes me about 30 minutes a month IF I sit down and do it. Everything is together, and separated. So I will have 12 pages with my monthly $ earned, and monthly $ spent.
Hey, if it works for you, then bravo.
For me I got my accountant to set up an excel spreadsheet and that works well for me and is quick to update, so that I have 3 sheets, on the first is sales, 2nd is purchases and the 3rd is the final accounts page, so that it updates every time I add to either page 1 or 2.
I have a book keeper that does my books every month. By far one of the best things I could have done for my business. She keeps me on the straight and narrow when it comes to my money. And come tax time it’s a breeze to file
I’m a big fan of contracting out. BUT- don’t you still have to make note of what is what? I can’t just toss a bookkeeper a stack of receipts & expect her to intuit what is a personal expense & what is a business expense. So if I’ve got to go through it all anyways, why pay someone else to go through it, too?
(Yes, I know some people have separate account and are very strict about separating purchases. I’ve tried that and it just doesn’t work for me, it’s entirely impractical.)
It really isn’t all that impractical to separate business and personal accounts.
It is the very best way to keep your book keeping simplified and will save you a tremendous amount of time in the future. Having separate accounts will also keep business and personal monies very clear to the IRS if you were to be audited. I have been audited. And your expenses must be very clearly defined or you cannot use the deduction. I carry a debit card for my business and use it for most transactions except for rent. Every transaction is recorded by the bank thus making it easy to make notations. I save all receipts for that month and then staple them to them to the monthly bank report. It’s easy to reference for notations that way. I have a book keeper that I pay $150 a month who keeps all my info in Quickbooks. She then gives me quarterly reports on my expenses, prepares my quarterly taxes, and gives me a profit loss report. It’s important to have a profit loss report in case you want to purchase a home, office or car. This report shows a bank that you make money and are worthy to borrow money. Yes I pay, but I figure that it costs me 2 one hour massages a month. I’d rather be giving massage for 2 hours than spending hours on paperwork each month and preparing my own taxes. Having reports on finances also helps with budgeting questions like; do I spend too much money on advertising? How much money do I spend on massage supplies? Or how much money am I spending on postage each year? And can I afford to pay myself more,less, or raise my rates? Separate money accounts at the same bank would be practical and online banking gives freedom to make changes in accounts 24/7. Having a book keeper/ accountant has decreased my financial stress to almost nothing and given me the confidence that the IRS will be pleased with my reports. It has also allowed more time for me in the long run. I highly encourage you to start with separate home and business accounts.
Dena, I love that you’ve found a system that works for you! I’ll never be a person who rings out 2 separate transactions on 2 separate cards when I go shopping. I just won’t. And since I’m a sole proprietor, ALL my account are subject to audit anyhow, there’s really no divide between personal & business. And I know if I was supposed to report back to an accountant monthly, I would just keep canceling the appointment. (He does all my estimated quarterly forms at the beginning of each year, so I’m covered there!)
Ultimately, I think I’m working out a solution that fits my style & business!
Vive la différence! And THANK YOU for describing your process so clearly, that’ll help readers so much!
I use quicken and a hand written system. Quicken to track all my accounts (personal and business) and so I know how much is in my account. These are reconciled every month – which forces me to stay on top of it. My hand written system makes it easier to look at. Income and out go with a “grand total” page for the year (with monthly breakdowns so I know how I did each month compared to last year).
First year with both systems but I’m hoping my handwritten totals match my digital ones.
This is one of my biggest procrastinations with my business, I’m hoping for an answer. I know how to do it, I just don’t seem to do it! Thanks for asking, so maybe someone can show me the way=)
I can’t say anything about getting my money in order but I really like your recommendation of sending monthly emails out to clients. Specifically sending an email out to all past clients informing them of appointment openings for the coming month. I’d expect that this would bring in at least a couple of additional sessions a month. This is a great simple idea that the majority of therapists probably overlook.
Thanks