How to Easily Track Your Business Income the Right Way
What is your favorite part of your business?
If you are like many business owners, you love creating new products and working with your clients.
Okay, so now what is your least favorite part of your business?
If you are like so many other business owners, you are going to answer that question with one word, FINANCES!
The finances of any business can seem overwhelming, especially if you are unsure of how to track everything. But, what if I could show you an easy way to track everything, so you can see exactly how good, or bad, your business is doing?
Do not start panicking, because I promise you that this will be easy and even pain-free!
First, I must know, are you lumping all of your employment income as part of your business income and labeling every penny you make as a sale? Are you accounting for those applicable 1099's even if you haven’t received them? What about your net deposits? Are you looking at those instead of your gross income?
All those questions will allow me to know if you are making the same financial mistakes as hundreds of other business owners around the world. Once I have those answers, I will know how to guide you on the path of tracking your business expenses, and even income, the right way.
Steps for Tracking Your Business Income the Right Way
1. One of the first things I will have you do is open bank accounts for your employment income and your business income. If you have these already, you will be ahead of the game, but if you don’t, this step is crucial to succeeding with tracking your business expenses the right way.
2. As soon as we have your accounts in order, it will be time to break down everything that is considered part of your income stream. This list should be quite detailed, so do not attempt to lump items together simply because they seem similar. If you are having a difficult time separating items, you can create subcategories under the categories.
3. It is important to know your gross income, as well as your net deposit every month. You should also know your credit card processing fees because you will want to write those off when you are doing your taxes. It is easy to find this information when you utilize a spreadsheet or a digital accounting program.
4. No business wants to have to handle refunds, but it is part of keeping clients happy. While it can be very easy to handle them haphazardly when keeping the books, it is important to place the refund info into the same category the original sale was in. This will allow you to see which products are the most successful and which ones might need a little tweaking.
You are never going to love doing the finances for your business, but following these steps will make your life much easier in the future. If you have any questions about how to do any of these steps, please reach out, so I can share a few tips that I have found to be successful time and time again.