Simple Home Based Business Bookkeeping System
Dull subject, I know!
But since the main purpose of having any business of your own should be to make MONEY, record keeping is a must.
This is a very simple system that you can set up in 10 minutes or less after a trip to Office Depot or some other office supply store.
AND, you can stay completely UP-TO-DATE in about 2-3 MINUTES a night, or every few days!
You can have a COMPLETE "P and L," (or Profit and Loss Statement) for your business at the end of every month in about 5 - 10 minutes.
And, best of all, you can have a COMPLETE record of your business Income and Expenses for your income taxes in about 30 minutes at the end of the year!
Come tax time next year, you will have ALL of your records and documentation in one place, and preparing your Schedule C will be a cinch.
Not only is record keeping essential for filing your income tax returns, but is vital to knowing where you are in your business and whether or not you are achieving your objectives...
So, what do you need?
1. A Sales Journal. I use a Columnar Pad with 6 columns. These come in 8.5 X 11 booklets of 50 sheets.
2. A Cash Disbursements (or, Expenses) Journal. I use an Analysis Pad with 12 or 13 columns. This is a booklet of 50 sheets 14 X 8.5.
3. A Mileage Log. (Costs about 2 bucks.)
4. A pack of about 10 or so manila file folders.
5. A "Box Office," or file drawer to keep a few files in.
How to set it up: The Sales Journal
You will have a place for the date of the transaction and a place for your customers name..
Then the 6 columns.
You can really set this up in any fashion that suits YOUR needs, the main objective of this Journal is to have ALL of your income recorded in one place.
The headings for my columns are:
1. eBay SALES. I write the amount of the sale I made to an eBay customer.
2. Product SALES. I write the amount of the sale of my primary products.
3. SeaAloe Commissions. In this column I write the amount of the commissions and bonus checks I receive from my primary vendor.
4. OTHER Commissions. In this column I write the amounts of commissions and bonues I receive from other high volume vendors.
5. AFFILIATE Commissions. In this column I write the amount of commissions and bonues I receive from miscellaneous vendors.
6. OTHER INCOME. I write the amount of other miscellaneous income I receive.
It's just that simple.
You can fill this in every evening in a couple of minutes and always be on top of your income.
You will want to total your columns at the end of the month and start a new page for the next month.
How to Set Up: The Expenses Journal
Again, you will have a place for the date of the transaction, and a place for the name of who you wrote the check to.
Then the 12 or 13 columns.
Again, set this up to suit YOUR needs.
The headings for my columns are:
1. CHECK NUMBER. Here, I write the check number, or, if I used a credit card to buy something for the business, I would put "Visa" or "Amex" or whichever card I used.
2. EXPENSE. Here, I write the amount of the check, or purchase.
3. PRODUCT. I put the amount of product merchandise here.
4. MARKETING SUPPLIES. Here would go the amount I spend on brochures, catalogs, tapes, etc...
5. MARKETING EXPENSES. Here I post the amount I spend on hosting, domains, merchant accounts, courses, that sort of thing.
6. OFFICE SUPPLIES. Well, office supply purchases go here.
7. SHIPPING AND POSTAGE.
9. TELEPHONE. I also post Internet charges, voice mails, pager, and any communications expense.
10. Blank (Or any other expense item you would like to track.)
11. Blank (Or any other expense item you would like to track.)
12. MEMO. This column I use for notes and to name a miscellaneous expense.
13. MISCELLANEOUS. Here I post any expenses that don't have their own column. Things that don't come up often, like bank charges, travel, dues and subscriptions, etc.
Again, this is all there is to it.
And, you can take out your checkbook and credit card receipts and get up to date every night in about 2 or 3 minutes.
You will want to total this one up at the end of every month also, and start a new page for the next month.
This Expenses Journal is invaluable in showing you where the money is going and if you are staying within your budget.
Folks, it is worth a LOT of money to you to fill out this little booklet whenever you are driving on business...
You can deduct 50.5 cents a mile in 2008, and believe me, this can be BIG MONEY for you at tax time.
ONE DOLLAR for every 2 miles you drive.
Every time you go ANYWHERE on business...putting out flyers, going to the post office, bank, meeting a prospect or customer, wherever, it is a legitimate business expense.
You can and will, of course, keep folders on whatever is pertinent to you, but mine are just as simple as this:
2. Bonus and Commissions
3. Invoices (product purchases)
4. Expenses (a folder for each expense heading above).
Folks, I know this is not glamorous, but you won't be sorry if you get this simple system set up as soon as possible.
This IS a BUSINESS, after all.
Many people do not make a profit their first year in Network Marketing. A BIG tax refund can go a long way to help you get it going the following year.
Obviously, I don't offer tax advice. But, if you have any questions on just how to set up and maintain a simple record keeping system, give me and email or a call.