Stereotype for managing money
What's your system for managing your finances?
Up until 4 years ago (i.e for the first 10 years of being self-employed) I used Excel spreadsheets to keep a track of my finances. - The headings i used are on this spreadsheet for you to download and use if you wish
When my son was little, I used to do a babysitting swap with a friend. 1 night a month I got a date night with my husband, and another night a month I got to sit in my friends kitchen listening out for their little ones (they never woke) and doing my finances. Win-Win.
I’d take with me
details of anyone I had to invoice - in my diary - or any monies i’d got in any other way - sheet 1
details of all the expenses i’d paid out - any receipts and my credit card bill - sheet 2
Then i’d check all the ins, and out’s against my bank record - sheet 3
Anything that didn’t appear on there was entered into my cash record
As my son’s got older, and been in school for longer hours, I've dedicated Mondays to my admin and marketing.
I now use Quickbooks for accounting. It costs me less than £15 a month, but means that I can easily keep doing my own finances, and my tax return even though my business is now larger.
I did try at one point using some admin help, but i found that i actually needed to know my financial position in order to keep me motivated on my marketing (that's a nice way of saying, "not enough money coming in, work harder, market more") So I was doing some of the work again, which was a waste of resources.
I've found that the times i've got behind on my finances and tracking my costs and expenses are when i've not got a system set up. I now have a box for receipts, and once a month i file them into a folder that has a sleeve for each month. I keep a weekly check via Quickbooks on my costs and expenses (i now buy everything possible via my business debit card through my account), and every few months, I do a reconciliation - which just means matching the receipts with what's listed in Quickbooks. It's at this point that i add in those other "hidden expenses" - see next section
As well as Quickbooks there are other online accounting resources - Wave, Sage, and Xero are some.