How to Keep Track of Your Business Money Without an Accountant

You don't need to be an accountant to keep good records. A few simple habits will tell you if your business is really making money, and they'll save you a lot of stress at tax time.

1. Separate business and personal money

This is the most important step. Open a separate bank account for the business, and pay all business income into it and all business costs out of it. When everything is mixed, it's almost impossible to tell how the business is really doing.

2. Pay yourself on purpose

Instead of taking money out whenever you need it, pay yourself a set amount each week or month. That way you know what the business can really afford.

3. Record every sale

Every sale should have an invoice or receipt with a number and a date. Keep copies, either printed in a folder or saved as PDFs in one place.

4. Record every expense

Keep every receipt for things you buy for the business. Take a photo of paper receipts as soon as you get them, because the ink fades. Save them in a folder for each month.

5. Use a simple system

Pick one and stick with it:

• A spreadsheet. One tab for money in, one for money out, with the date, description, amount and category.
• Free accounting software. Wave, GnuCash and Manager.io are all free and do the maths for you.

6. Do a weekly money check

Set aside 20 minutes every week to enter your sales and expenses. It's much easier than trying to sort out a whole year in March.

7. Know your numbers each month

At the end of each month, look at:

• Money in: total sales
• Money out: total expenses
• Profit: money in minus money out
• Who owes you: unpaid invoices

If profit is low or going down, you'll spot it early and can do something about it.

8. Keep money aside for tax

Put a percentage of every payment into a separate savings account for tax, so the bill doesn't catch you by surprise.

As your business grows, an accountant is worth paying for. Good records will make their job quicker and cheaper.