Are you one of the many creative entrepreneurs out there who is wondering exactly how to do your own bookkeeping? It seems so overwhelming! There are a lot of systems out there, there\u2019s fear of screwing it up, and, well. . . you\u2019re not a bookkeeper. How are you supposed to know what to do?<\/p>\n
For whatever reason, you\u2019ve decided that it\u2019s not <\/em>time to hire a bookkeeper (yet). Maybe your business is too new or too small, money\u2019s too tight, or you want to make sure you understand how things work so you can oversee a contractor. All good reasons!<\/p>\n And yet\u2014what does DIY bookkeeping even mean?<\/p>\n First, I want to say one thing: You can do this<\/strong>. DIY bookkeeping isn\u2019t hard <\/em>(with a few exceptions), but it can be confusing, time consuming, or just anxiety-producing. So the first step in DIY bookkeeping is a Big Ol\u2019 Deep Breath.<\/p>\n Ahhh<\/em>. That\u2019s better. Let\u2019s dive in.<\/p>\n <\/p>\n First things first (OK, second, after the breathing), you need to get somewhere to put all of this<\/em>. There are a lot of tools out there, and I have feelings about all of them as a financial nerd. Personally, I use Xero and You Need a Budget (YNAB) with my clients, depending on their business. However, I know people who like Quickbooks Online (and a lot that don\u2019t). I know people who like the freshness of Freshbooks. Some people rave about Wave.<\/p>\n Here\u2019s how to pick: choose the one you\u2019ll use. <\/strong>All of these have free trials. Give \u2018em a whirl. Do some Googling. You\u2019ll find fans and haters of all of them.<\/p>\n <\/p>\n Once you\u2019ve got a bookkeeping tool, you want to use it primarily to record your business financial transactions. That means you\u2019ll want it to have information about all of your expenses, and all of your inflows.<\/p>\n ALL. OF. THEM.<\/p>\n Every time you get paid? Into the system. Revenue<\/em>.<\/p>\n Every time you pay someone else? Into the system. Operating Expenses<\/em>.<\/p>\n Automatic payments? Into the system. Operating Expenses.<\/em><\/p>\n Transfers to your personal account? Into the system. Owner\u2019s Draw.<\/em><\/p>\n That time you used the business credit card on Amazon to buy some<\/p>\n shoes, because it defaulted there after you bought some office supplies? Into the system. Owner\u2019s Draw.<\/em><\/p>\n Every single time money enters or leaves one of your business bank accounts (including a \u201cregular\u201d bank account that you use exclusively for business), it should be in here.<\/p>\n Good news, though\u2014all of these systems will connect to your accounts, so all you have to do is approve and categorize them.<\/p>\n <\/p>\n <\/p>\n1. Get a bookkeeping tool<\/strong><\/h3>\n
2. Enter all of your transactions<\/strong><\/h3>\n