Organize Business Finances
Loose papers, receipts, notes, credit card bills, financial statements, tax returns – these are the byproducts of owning a business. They take up space on your desk and in your mind and every time you look at the litter you feel disorganized.
Is there a better way to organize your business finances? You bet. Follow the steps below to create a simple, yet functional way to organize your business and live a more carefree life.
Get a Binder – Purchase a three-ring binder based on the volume of paperwork you produce annually. A 1.5″ or 2″ binder would be adequate for most businesses. You will use one binder for each year you are in business, so that every detail pertaining to your business that year is in one place for easy retrieval. In the viewing window type a cover that shows the name of your business and the year.
Get a Three Hole Punch – Purchase a three-hole punch. This is to hole-punch all larger receipts, documents and financial statements and have them fit neatly into your binder.
Get a Zipper Compartment – Purchase a plastic zipper compartment from an office supply store to hold small receipts.
Purchase Accounting Software – Get yourself accounting software so that you can track your finances. Professional business owners track their profits and losses using the right tools and analyze their financials regularly. Such accounting software is MYOB, Peachtree, Microsoft Office Small Business, and Simply Accounting. Try to begin tracking sales and expenses from the beginning of your business or the beginning of the year.
Arrange paperwork in your binder according to month. Keep all receipts, credit card statements and bank statements (make sure to reconcile these monthly), and sales tax reports (if you sell products). At the end of each month, run a Profit and Loss Statement and a Balance Sheet (collectively known as Financial Statements). The Financial Statements become the separator for each month. File small receipts that can’t be hole-punched in the zipper compartment at the back of your binder.
At the end of each year, reconcile your accounts, print your annual Financial Statements, and close out your year. Put the binder away and start a new one for the New Year. Give your accountant or CPA a copy of your QuickBooks file to prepare your income tax return.
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