Bookkeeping, A Necessary Evil

Bookkeeping A Necessary Evil!

Let's be honest, unless you really have a thing for numbers, this is the one thing holding you back from a business of your own. Aside from the scary tax subject, this is what I hear most. Many small business owners just look at their bank account to see if they have money to spend. They don't plan out their expenses much less plan for emergencies. Others depend on their accountant to tell them if they are making money or not. This is not a good plan. READ "Profit First"

Don't be that small business owner.

If you are like me, I was never taught to manage money. I learned it on my own by trial and error. Experience is a hard teacher sometimes.

When I think of bookkeeping, I think of a dark, dingy office with a person's head buried deep under loads of paper. I know, kind of stereotypical. But, thinking of doing your own bookkeeping can be daunting.

I am not good with numbers. Here is a personal piece of information...

I failed 5th-grade math! Yes, I failed! I failed because I could not do the "New Math" at the time. I could divide, but not the way they wanted me to divide. My math teacher, Mr. VanSpankeren, (yeah I remember his name), tried hard, but eventually gave up. I just couldn't get it. So as a result, I have an unhealthy fear of numbers, math, calculations, formulas, spreadsheets, bank statements, accounting reports, you name it.

For me to even think about bookkeeping, was frightening. But then I found "Profit First". by Mike Michalowicz. He made the process of accounting seem logical and simple.

(If you haven't read my accounting post, please go here to read it).

So I thought if an accounting process can be made simple, why can't bookkeeping be made simple? I found my accountant and expressed my concerns about my math challenges. She gave me a two-page list of what she needed from me to do my taxes. Simple right?

Well, not yet! I needed a way to be able to get the information to her without pouring through my bank statements and receipts. Through reading "Profit First", he explains to use a bookkeeping system to sort out the expenses monthly, quarterly, and annually. I used the resources on his site to find the WAVE BOOKKEEPING SYSTEM. This is a free bookkeeping program, used online, that connects to your bank securely. It downloads your bank transactions and allows you to categorize them for your business. You can add income/expense accounts, and make entries for Owner's compensation/Draw or investment. Everything I needed for my accountant.

I set up a FREE account and downloaded all my transactions for the year. I thought, wow, this will take forever to categorize all these entries. Nope! After the first month or two, the program learned what entries were and began to enter the categories for me. It knew that my internet transaction was every month and categorized it for me!

Reports and filters are available. My paperwork for my accountant will be simple and easy with WAVE Bookkeeping. www.wavebookkeeping.com

Now, this does not mean you do not have to participate daily in the money management of your business. But it does mean that with a few minutes a month, you can prepare all of your income and expenses and have a visual of what is happening, real time.

You will still need to make the necessary daily, weekly, monthly, and yearly financial decisions that come with running a business. But this tool makes the daunting task of bookkeeping, which many small businesses ignore, much less painful.

~~Holly