Running a small business is exciting, but keeping track of your finances? That can feel like a chore. The good news is you don’t need to be an accounting expert to set up a simple bookkeeping system that works. With a few basic steps, you can stay organized, save time, and keep your numbers in check. Here’s how to get started.
Pick a Method That Suits You
First things first: decide how you want to track your money. You’ve got two main options—doing it by hand or using software. If you’re just starting out and your business is small, a simple spreadsheet might do the trick. Tools like Microsoft Excel or Google Sheets are free and easy to use. You can set up columns for dates, income, expenses, and notes to keep everything in one place.
If you’d rather let tech handle the heavy lifting, consider software like QuickBooks, Wave, or FreshBooks. These programs are built for small businesses and can save you time by doing calculations for you. Wave even has a free version, which is great if you’re on a tight budget. Choose what feels manageable—there’s no right or wrong here, just what works for you.
Separate Business and Personal Finances
Mixing your personal and business money is a recipe for confusion. Open a separate bank account for your business—it doesn’t have to be fancy, just a basic checking account will do. This keeps your business transactions clear and makes tracking income and expenses way easier. Plus, if the IRS ever comes knocking, you’ll thank yourself for keeping things separate.
Track Every Dollar In and Out
Bookkeeping is all about knowing where your money’s coming from and where it’s going. Start by recording every sale or payment you receive—think of it as your income log. Write down the date, amount, and who paid you. If you’re using software, it’ll often pull this info straight from your bank account once you link it up.
Then, do the same for what you spend. Whether it’s rent, supplies, or a coffee run for the team, log the date, amount, and what it was for. Save your receipts too—snap a photo with your phone if you’re not big on filing paper. This habit keeps you on top of your cash flow and makes tax time less of a headache.
Set Up Basic Categories
To make sense of your numbers, group your income and expenses into categories. For income, you might have just one—like “Sales” if you sell products, or “Services” if you’re a freelancer. Expenses can be things like “Supplies,” “Utilities,” “Rent,” or “Advertising.” Keep it simple—five or six categories are usually enough for a small business. This way, you can see at a glance what you’re spending the most on.
Schedule Regular Check-Ins
Your bookkeeping system only works if you stick with it. Set aside time each week—maybe 15 or 30 minutes—to update your records. Go through your bank statements, receipts, and invoices, and make sure everything’s entered. If you wait too long, things pile up, and it gets overwhelming. A quick weekly check keeps it painless.
Know When to Get Help
As your business grows, your bookkeeping might get trickier. That’s okay! If you start feeling lost or taxes get complicated, think about hiring a pro. A bookkeeper or accountant can take a look, clean things up, and give you advice tailored to your business. It’s not about handing it all over—it’s about getting support when you need it.
Keep It Simple and Start Small
The goal here isn’t to build a perfect system overnight. Start with the basics: a way to track money in, money out, and a little time each week to stay on top of it. You’re not an accountant, and you don’t need to be. This is about giving yourself peace of mind so you can focus on what you really love—running your business.
There you go—a straightforward setup that keeps your finances clear without the stress. Got questions? Feel free to tweak it as you go. It’s your business, your rules!
