The Quickest Way I Know to Get Your Financial Records in Order

As entrepreneurs, we do need to keep our financial records in order. Not only for our taxes but for ourselves as well.

Knowing your numbers, such as your revenue, expenses and your profit, will show you what position you are currently in and how healthy your business is.

And, of course, we need to keep our business (and personal) records in order for our tax returns.

To clarify, I have an accounting background but these tips are of a general nature and you need to seek advice from your accountant when it comes to your tax returns and your bookkeeping.

Without further delay, here are

3 Tips on how to get your financial records in order

Tip #1: Be consistent

Reconcile your bank account at least monthly if you are a freelancer and at least weekly if you’re a company.

Reconciling means that you allocate your expenses/income to the specific categories that you set up. Income categories could be sales, interest income and miscellaneous income. You can split your income into separate categories based on your products or services too.

Scan your receipts on a regular basis. Ideally on the same day that you made a purchase.

Pro tip:

Name your files as: Supplier, date and amount. This way you can easily search by the amount if you ever need to find a particular receipt.

You’ll be also keeping all your numbers in your choice of software or a simple Excel Spreadsheet / Google sheet.

You can scan either using the Xero app (see more about Xero in Tip 2) or add them to your Dropbox.

Dropbox app has a great scanning option.

Tip #2. Find what works for you

Find the tools that work for you.

If you are starting out: an Excel spreadsheet (or better a Google Sheet) is just fine.

Make sure you keep your receipts in the Dropbox or receipts that you got via email in the separate folder in your Inbox (ideally you would upload them to your Dropbox as well but I totally get you - it's not something we want to be doing) and you will be able to find them if you don't have hundreds of emails with expenses.

If you are not a big fan of spreadsheets, try Rounded.

Perfect for freelancers. Awesome customer support.

Other alternatives: Wave App or Freshbooks.

If you are a company and have employees or you are ok paying more for your software, then get Xero. They promote it as the most beautiful accounting software. And it totally is.

Xero is my favourite program to work with when I work with clients.

It's more sophisticated than Rounded but more expensive. I've been with Rounded since 2017 and it's everything that I need for now.

It's pretty, easy to keep the records in. Gives you the main reports you need such as the Balance Sheet and your Profit & Loss.

Tip #3. Think less

Seriously it's such an important tip.

If you start thinking for too long - you won't do it.

Here is your next step.

Get the Dropbox app (to scan your receipts right away), create a folder in there: TAX RETURN. Create a sub-folder: TAX RETURN 2022 fye. FYE stands for financial year-end.

Create two more folders: INVOICES 2022 (income) and EXPENSES 2022 (receipts).

Upload your receipts into the Expenses folder.

When saving the file, make sure that you follow the formula outlined in Tip 1.

Voila! It’s totally possible to have your financial records in order without any stress.