Friday, February 15, 2013

Bookkeeping Tips to Make Your Life a Little Easier

For many writers, bookkeeping can be a drudge. But there are ways to streamline it and make it easy enough that it won’t dominate your life.

No matter which of the three bookkeeping systems you choose—simple checkbook, single-entry journal, or the more complicated cash-disbursements journal—you’ll also need to have an easy way of filing  backup receipts. You should have something—receipt, invoice, canceled check or petty cash ticket—for every expense. Make sure before filing these receipts that they indicate all of the important information—date and amount paid, to whom paid, check number or cash payment. Keep these receipts for business expenses filed separately from any personal expenses. You can use one of those accordion files divided into 12 compartments—one for each month—or 12 envelopes or a box in which you store receipts in monthly bundles. Whichever way you choose, be consistent.

The first step in recording your expense receipts is a program like Expense Director from Iambic.com. This program allows you to record your expenses on your smartphone or personal assistant. Then you can sync the device you’re using to your computer to save and store your expense notations. After you record your expense amounts, place the receipts for that month in a box. Make sure to put a check mark on each receipt after you record it. At the end of the month, bundle that month’s receipts for storage.

A program like Expense Director allows you to create spreadsheets of monthly expenses easily and quickly. You can also sort your expenses so that you have all like expenses together. If you don’t have a spreadsheet program, get one. It comes in handy for lots of other records, too.

All funds received or disbursed from your freelancing business should pass through your business checkbook. Your monthly bank statement should be balanced against your receipts/disbursements spreadsheets, as well as verifying your checkbook balance.

Record all cash receipts in the proper column by category. If you're working part-time, you can keep the data in the same spreadsheet, but keep the receipts in a separate column. If you regularly receive rent or other such income from another source, separate those receipts also.

Record gross receipts and net receipts, if you have both, at the same time for more ease in figuring your taxes. Be accurate when you record figures across the page. They need to balance both horizontally and vertically. You’ll want to balance each page monthly, then record the balances on the balance spreadsheet.

You’ll find it handy to have a calculator with a printout tape. It’s also helpful as proof of balances during any tax audit. As you balance each page of your spreadsheet, you can file the tape with your backup material—receipts, invoices, petty cash tickets, etc.

If you’re following the above procedures, you’ll be able to check your accounts receivables each week which will let you know if you have any slow payers. You’ll also be able to check you accounts payables, your bills, to see if you can pay ahead to take advantage of any discounts.

And every month, you’ll need to post your income and expenses and balance your books. You’ll also need to prepare a profit and loss statement, balance your business checking account, balance and file any petty-cash receipts, and do anything to prepare for taxes. And one last thing: You’ll need to rebill any slow payers. Doing all of this should keep you on financial track.

6 comments:

Rosaria Borgman said...

These are definitely very good tips to keep in mind when it comes to bookkeeping. It’s very important to have clear, accurate, and secure records of all movements of finances, both in and out. It’s handy to know several secrets in keeping things accurate, because you never know when you’ll need to check your books for receivables or payables.

- Rosario Borgman

Lynn Webb said...

I'm sure these tips would help any writer, or anyone for that matter, that are having problems on bookkeeping. Starting from nothing is the most common problem I've ecountered with people having difficulties with their accounts. Your comprehensive tips here solves that very problem! Thank you for sharing this post with your readers! Your tips here have been a great help to you readers particularly the budding entrepreneurs in Africa, and probably around the globe as well.

Lynn @ OnCoreBookKeeping.ca

Clyde Hudson said...

Bookkeeping isn’t an easy task, as you’ll be handling delicate information in your journals. You have to be consistent in updating your ledgers and be meticulous in your inputs. As long as you have accurate and complete data, balancing and creating your income statement wouldn’t be too hard for you. Thanks for sharing those tips! All the best to you! :)

Clyde Hudson @ Stewart Technologies, Inc.

Greg Yard said...

This is the best tip that I'm looking for so that I can help my company to improve its accounting problems. We have also hired some expert in tax accounting and they are Expert Tax Accountants in Gold Coast. If you want their service, you can easily find them here.

Ryan P. Brockman said...
This comment has been removed by the author.
Mozella M.Babich said...

Great share!!

Well I would like to say here that streamline and automate your bookkeeping, keep it simple, and waste less time.

"Go Paperless by using Cloud-Based Accounting"

Most accounting software will provide all the basic functions needed for any type of business bookkeeping. Look for packages made for small business owners because they streamline the process by providing basic templates for your business like invoices, deposit slips, and business account check printing. With the addition of cloud-based accounting systems you can access your business information from anywhere.

If you are still in doubt, then read this blog to clear all your doubts regarding bookkeeping.