7 Ways to Simplify Your Bookkeeping

Have you ever felt the following when it comes to your bookkeeping: overwhelmed, stressed, frustrated, or completely lost??? If you answered yes to any of these, then you are not alone. I hear time and time again how bookkeeping is something you know you have to do, but it is the last thing on your list that you WANT to do. You put it off to the last minute, and you may even do your bookkeeping solely out of fear of being chastised by your tax accountant! (Trust me, I’ve heard it all).

If any of this resonates, then this blog post is for you! I am here to tell you about 7 ways you can simplify your bookkeeping, TODAY!

1. Open up a business bank account separate from your personal account

You’ve probably heard this advice many times before, but it truly is one of the simplest ways you can do to make your life easier when it comes to bookkeeping, and it’s easier than you think to get set up!

By setting up a separate business bank account, you can save countless hours of tracking down expenses and deposits. This is because all of your business activity can be tracked down to just ONE account! 

Your options for getting started are simple: 

1. You can open up a business account at your local brick and mortar bank where you have your personal account. This will keep your banking needs streamlined, and set up is usually pretty straightforward.
2. Another option is to go with an online business banking provider like Relay Financial or Novo. These are both fantastic options if you prefer a virtual, paperless experience, because let’s face it, that is where the world is going! Typically, the set up is even easier than walking into your local bank, because it can all be done online in real-time!

2. Pick one day/time a week to look at your bookkeeping (and actually schedule it!)

One of the keys to simplifying your bookkeeping is to be CONSISTENT with how/when you actually do the work. And if you keep up with the tasks on a regular basis, it is quick and painless.

Here’s how to get started:

1. Pick the frequency with which you will do your bookkeeping, and actually put it on your calendar
2. Create a short list of tasks to do on your bookkeeping day so that things don’t get out of hand
   1. Examples of things to include
      1. Accepting all bank transactions in your accounting system
      2. Check bank account balances
      3. Pay outstanding bills
      4. Invoice clients

By showing up consistently in your bookkeeping, this will not only give you the confidence that you are taking care of your finances, but it will make running your year-end reports for tax time a breeze.

3. Decide on an Accounting system and stick with it

The key here is consistency. Having one central location that you can go for all of your business finances will simplify your preparation for tax time.

When picking an Accounting system, do a little bit of research before diving in to make sure it is the best fit for where you are in your business. Some things to consider are:

1. cost 
2. learning curve 
3. accessibility by third-parties (like outsourced bookkeepers, tax preparers, etc) 
4. richness of features versus simple and straightforward

The typical recommendations I make to business owners for Accounting systems can range from:

1. Spreadsheets. While this isn’t my first choice for entrepreneurs, spreadsheets definitely can work if you’re just starting out and have simple revenue and expense models. Just be aware of how this system is working for you and be willing to make a change when things start to get too complicated for a spreadsheet!
2. A popular Accounting tool with entrepreneurs is Wave because they have a totally free option and it gives you the rudimentary things you’ll need in a tool.
3. My most recommended tool for business owners is, probably not much of a surprise here, QuickBooks Online (or QBO). QBO is the cadillac of accounting systems for entrepreneurs and can grow with you as your business grows. The other reason I love QBO is because almost every other financial related tool has an integration with them, so you can keep all your business information flowing smoothly.

4. Create a central location for your receipts

This can be something as simple as a shared drive like DropBox or Google Drive, a folder on your desktop or even using a sophisticated receipt capture software like Dext or the built-in receipt function in QuickBooks Online.

Keeping all of your receipts in one place will make it a breeze when it comes to tax time, so taking that extra 30 seconds to file a receipt will save your hours of headache at the end of the year.

5. Simple Categorization of expenses

Whether you’re using a spreadsheet or a sophisticated Accounting tool, consistent categorization of your expenses is key. This will help streamline your year-end tax reporting because you will have consistent buckets of expenses to give to your tax accountant.

Brainstorm a list of all of your regular business expenses and put them into high-level categories that are easy to understand (both for you and your tax accountant). There’s no need to get fancy or overthink this. Keep the list to 20 or less and stay consistent!

6. Automate when possible

Automation is everywhere these days and can save you tons of valuable time with menial redundant tasks. Spend some time thinking about your business systems ecosystem and how you may be able to automate some of that workflow into your accounting system.

A couple examples of simple automation could be:

1. If you’re using an accounting system, take advantage of the automatic bank feeds. I could write a whole blog post about why this feature is a game changer for your bookkeeping, but I’ll save that for another day. 
2. Automate filing of receipts by setting up email rules in your Gsuite or Outlook accounts
3. If you’re using another tool for invoicing or payment (example, Dubsado, Shopify, Square, etc), look into the integration options with your Accounting tool. Many times you can have those transitions sync into your Accounting system without you having to enter them twice!

7. Give yourself grace

Of all of the ways to simplify your accounting, this one is probably the most important. 

Recognize that this may not be your most favorite task, and give yourself grace for not knowing everything there is to know about it. At the end of the day, it’s not your job to know everything about it! That’s mine!

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If you’d like to learn more about how TulaBooks can help you with streamlining your unique bookkeeping needs, don’t hesitate to reach out for a quick Discovery Call. We can chat about YOUR business and how simplified bookkeeping can bring you peace of mind with your numbers and your business as a whole.

So, let’s chat!