We CREATE ORDER by getting our bookkeeping done!
Let’s start with the definition of what bookkeeping is:
Bookkeeping is the PRACTICE of recording all of a business’s financial transactions in a SYSTEMATIC way and in chronological order which MUST be done for all businesses.
Now, let’s break that definition down:
The definition says bookkeeping MUST be done for all businesses.
Doing your bookkeeping is not optional for a few reasons:
- It is required by law. Each year you must file a tax return and be able to back-up the numbers on your tax return with your financial records.
- Setting your company up for success. A CEO that runs a strong company does bookkeeping on a timely basis in order to have a clear understanding what is happening financially. Many business owners run their business based on their cash balances and that does not provide the insight that looking at your numbers in an organized way on a regular basis will do for you.
- Get Cozy with your numbers and Look Ahead. Finding a way to regularly get cozy with your numbers will put you in a great position to use what you learned from looking at what your business is currently doing to LOOK AHEAD and plan out what you want to create moving forward.
Do you see how important doing your bookkeeping is? I hope the above breakdown has increased your desire to create and maintain a bookkeeping system for your business!
Let’s talk about another part of the definition of bookkeeping…the PRACTICE of recording all financial transactions of your business.
Bookkeeping MUST be done, and it might not be your strong suit or anything you even desire to do.
I recommend transforming it into something that includes:
- PLEASURE for you
- REVERENCE around taking care of your business in this way
- Setting aside time to take CARE of your bookkeeping
- Viewing the system you chose as a SACRED CONTAINER for your business growth
Taking care of your business in this way WITH LOVE is an important part of building a business that takes care of you.
Refer to Financial Friday Practice #1 – Creating a Fearless Financial Ritual for more ideas around transforming taking care of your business finances into a beautiful ritual.
The Nuts and Bolts
Here are some considerations to get you started if you don’t have a system in place:
- Decide on your bookkeeping system:
- Excel spreadsheet – use if you don’t have a ton of activity and are comfortable with Excel. Here is one I created for you. Click here, go to File (top left) and download or save a copy for your use.
- A computerized system like QuickBooks Online or Xero – use if you have more activity, are comfortable with computer software and can afford a monthly subscription of $30 or less
- Pen & Paper or a Dome book – use if you hate computers and love pen and paper
- Outsourcing it to a bookkeeper or bookkeeping company – use if you know you will not do this on your own
- Set yourself up for success by using separate bank and credit card accounts for your business
- All money collected from customers and all money paid out for business expenses should be captured in the system you choose including names, dates, amounts and organized in categories that are meaningful to you
- All the individual transactions recorded in your system should be able to be matched up to documents like receipts, invoices, and statements
- Document they system – Who does what when
- Commit to a schedule or hire a bookkeeper that will keep to a schedule
- Add accountability to ensure the bookkeeping doesn’t get behind
Once you have your bookkeeping done and up to date you will be have some good numbers to use as you create your financial projection in the step LOOKING AHEAD. I promise you it will be worth it.
Create Order is one of the Finance Friday Practices we work on in the Private Facebook group I lead. This private Facebook group is a Mastermind Group for entrepreneurs that want to increase profits in their business by paying attention to their numbers. Click here to join for daily and weekly inspirations, calls to action and be a part of a community working toward similar goals. http://loveyournumbersnow.com/financefridays