I once saw a TD Bank survey where small business owners ranked bookkeeping as their number one most hated task in running their business. In fact, 46% of the small business owners surveyed responded negatively to bookkeeping. Coming in second was a tie at 22% of small business owners indicating banking and marketing.
Even though I spent the first half of my adult life working in accounting I completely understand this feeling. Tracking how much money you are making and spending can be tedious. And if not well organized, it can feel like it never ends. Then because you don’t like doing it, you procrastinate, and instead of doing the bookkeeping once a week, you are playing catch up on a monthly or quarterly basis. Now you have 10 times or more paperwork and that much more time to invest. Arrrrgh!
Now add on top of this the fact that you are worried about what the numbers will reveal when the bookkeeping is finally completed. Or perhaps, you are not sure how to interpret the numbers so going through the bookkeeping process seems particularly pointless.
This is a shame, because when kept up to date, the result of your bookkeeping efforts is real information that can guide you to make smart business decisions. But, because it is so universally disliked, the majority of small business owners that I speak with do everything they can to avoid or postpone the task.
I’ll be honest, when I had my own business I came to dread doing the bookkeeping also. I frequently felt that the time I spent updating QuickBooks could be more profitably and enjoyably spent meeting or working with clients. And yet, it needed to be done. Here are some tips I employed, to minimize the time and energy I expended on bookkeeping.
- Work on it weekly
- Have a set time and day
- Keep all your financial papers in one place
- Be organized
- Simplify filing
- Minimize distractions while working
- Reward yourself for finishing quickly
First off, update your financial records on a weekly basis. Initially, I was only doing it 1 or 2 times a month. However, by the time I sat down to do the work, so much paperwork had accumulated that it was taking me the better part of a day to get it all done. I found I was much happier spending just an hour or so each week.
By having a set time and scheduling it in my calendar it was easier for me to prioritize the task. And by having a set time to finish, it motivated me to put my nose to the grindstone and work quickly and efficiently.
Don’t spend half of your time trying to track down the one invoice you know you must pay or the missing credit card receipt. Worse yet, don’t miss out on revenue because you forgot to invoice work you completed. Designate one place, a file folder or bin, as the location to place all financial receipts, invoices, etc. Then when you are ready to work your goal is simply to empty the file.
Keeping all your financial files in one place is part of being organized. However, I mean something more. Before you start entering data, sort the paperwork so that all credit card receipts, cash receipts, bills to pay, customer payments, and invoices to send out are grouped together. Then within each group, sort them by date or vendor. You will be more efficient and accurate when you complete all of one type of entry before moving on to the next.
Simplify your filing system so that filing takes only a few minutes. I like to alphabetize my receipts and invoices as I enter them and to have separate files for the vendors I use most frequently so I can quickly drop them in and move to the next task. Just so you know, the job is not done until the filing is completed. (Yes, this makes me sigh in frustration also.)
Minimize distractions as you work. If you are like me, you will find that email, social media, and other distractions call much more loudly when you are working on a task you dislike. So close out of Facebook, turn off email, and ignore the phone when it rings and just get it done. An added bonus is that not only will you work more quickly, but you will also make fewer errors that will need to be fixed later.
Finally, reward yourself when you finish. For myself, I always scheduled bookkeeping for Friday afternoons. When I was finished I would either call it a day or move onto another task that I enjoyed doing.
I have one last tip that I never implemented, mostly because of my accounting background: hire someone to do it for you. The money spent on a good bookkeeper is money well spent, especially if you use the time you save to generate more income. Just remember, by being organized, marking receipts, and gathering information you will not only keep your bookkeeper happier, you will also minimize the amount you spend on their services and maximize the accuracy of the information they create.
What can you change today that will help move bookkeeping off of your most dreaded task list?