Well it’s almost tax season and you know what that means.  Frantic rushes to find receipts and make sure your small business financials are organized so you can file your taxes. 

Wouldn’t it be great if you didn’t have to do that anymore?  And let me tell you your accountant will thank you if you don’t come in with a shoebox full of receipts.

There are truly only 4 steps to organizing your small business finances to get the year started out right.  That way you can have a clean desk, a clear mind and keep your business on the right track.

Why You Should Keep Your Small Business Finances Organized

Let’s face it you would rather risk a trip to the dentist than to get your small business finances organized.  Maybe you even think that the dentist is fun.  If you do decide to take on the challenge of organizing your small business let these be the reasons that you choose.

1. You’ll make tax season a LOT less stressful
2. You’ll become more financially aware and it will improve your money management, which in turn will help you make better decisions.
3. It will help you keep an eye on your cash flow, budget, and your expenses so you know where to spend your money and where to cut back.

Let’s get you organized and on your way and then we’ll work on keeping it organized throughout the year.

Step 1: Organize Your Paper and then Digitize it

The first step is always the hardest, but you got this and really, it’s not so hard. 

Stuff You May Need 

• Cloud Storage (i.e. Dropbox or Google Drive)
• Filing Cabinet or a 12 Pocket Folder (1for each year)
• Label maker or Sharpie Pen
• Manilla folders and hanging folders
• 3 Empty shoeboxes

Paperwork You Need to Keep on File

• ATM Receipts
• Deposit records
• Deposited Checks
• Bank, loan and credit card statements
• Tax Returns and other tax documents

Create Your System

Organize your digital cloud storage just like your filing cabinet.  (Assuming you’re not going totally paperless).

1. Create a Folder for each year
2. Create a folder for each month
3. Create an Annual folder

See that wasn’t so hard.  Repeat for each year.  On your computer, this will look like

I love color-coding by quarter but that’s not something you have to do. 

Now it’s time to put that paper in the right box.  I know you were asking your self why boxes.  This is why.  I like to sort through the piles first and get them int the right order.  It makes filing so much easier.

Time to start sorting: 1 box is for receipts and bills received. One box is for bank statements and loan documents.  1 box if or Tax returns and other IRS documents.

Organize Receipts and Bills

Take the receipt box and start sorting.  Since receipts can sometimes be small use an envelope and stuff that.  Write the month on the outside.

Automate it!

I love good tools!  Below is a list of both paid and free tools you can use to keep your receipts and bills automated.

Paid Receipt Trackers

• Expensify
• Shoeboxed
• Receipt bank

Free Receipt Trackers

• Evernote
• Google Keep
• Google Drive

Organize Bank, Credit Card and Loan Statements

If your bank is like my bank I can go and download my statements from the bank itself.  No more paper copies for me.  When I reconcile my accounts (yes, I actually do this).  I upload the statements to my google drive.  Most banks keep anywhere between 1 and 3 years online.  Older then that they don’t keep them.  I like to make it a habit to download them just in case I need to them. 

Check on your loan statements and make sure they line up.

Tax Returns and Other Tax Documents

You must keep your tax records for a minimum of 6 years.  Nowadays with efiling tax returns, you should have an electronic version.  If using something like turbo tax or H&R block software, make sure you keep a copy. 

Tax Documents that you’ll need to keep

• 1099s you receive or send
• Your Annual Tax Return
• W2s
• I9s
• Partnership and Business Organizational documents
• Payroll
• Estimated tax receipts

Step 2:  Organize Where Your Money Comes From

The most fun part of this step is to figure out where your money is coming from.  Ask yourself a few questions

1. Are you currently an employee? That means salary.  You should list it but separate from your business.
2. Do you sell services? Packages bundled together.
3. Do you sell products? How many and how many variations.

If you’re an eCommerce store that means listing all the products you sell and all the variations of products you sell.  For example, let’s say you sell Widgets in different.

Example of a Service Product List

Example of a Service Product List

This may be a bit different depending on the service or products that you sell.  If you really want to know how to price your products check out our article on Pricing: Art or Science here. 

You can also download the Profit Roadmap which has a spreadsheet that will help you price your products and know that your making a profit here.

Automate it!

 Paid

Quickbooks and Xero both have product forms that you can create which will help you track your products and services.  They are not the most robust when it comes to inventory products but it is a simple way to get started.

Free

Create a spreadsheet or Google Sheets.  Just make sure you keep it updated.

Step 3: Map Your Business Expenses to Keep Your Finances Organized

There are two to three different types of expenses

1. Loans and Credit Cards that you need to pay
2. Bills from Vendors like contractors you hire to do work
3. Day to Day expenses like software subscriptions you have to various services

Let’s start by breaking them down into three groups

Now create a quick spreadsheet that looks like this:

Oh, Look You just made a budget too!

Bonus! you just made your chart of accounts also known as categories.

Step 4: Track Your Business Finances Daily, Weekly and Monthly to Keep on Track

Use your system that you’ve set up.  Try to keep up with it with daily, weekly, monthly and quarterly tasks so you can stay on top of your finances.

Automate what you can so you stay ahead of the game and make better decisions about your business like what products to keep.  What is selling like hot cakes. 

Get help when you need it.  Finances can be hard you may need to get some help or an outside perspective.  Feel free to join our Facebook Group Mind Your Own Business – Powered by Accountable CFO to get answers from a group of like-minded business owners just like you.

Putting it All Together

Getting your filing, paperwork, and finances in order will help you, in the long run, to make better decisions about your money, your time and your business.  You don’t have to be a financial wizard to be in control.  Use the steps above along with the profit roadmap and good budget and you’ll find that you’ll be clearer on what you need to do next.

If fear is holding you back or your confused about what to do.  Then maybe it’s time to talk to an expert.  We’d be thrilled to have you Make an appointment today! 

Just remember

You Got This!

Andrea