Simply Home Business

Your Recording Keeping System

Your financial records are the voice of your success. Good records can do two things for you:

• Tell you whether or not you are achieving your goals step-by-step, by telling you whether your business activities are giving you a financial return on the time you invest in them.
• Keep you organized

Financial Files

Keep your financial files separate from the rest of your filing system. Keep your business files separate from your personal financial files.

Start with one "Business Financial" file and keep all financial paperwork in it as it comes in: bank statement, receipts, bills, etc. Make a date with yourself at least once a month to reconcile your bank records and track your business expenses. When the month is "closed", put it all in one envelope and label it for the month.

At the end of the year, you may want to file your receipts according to the types or categories of business expense but if you use an electronic system like Quicken, just make sure that for each entry you categorize your expenses. (This system works well for your personal finances, too, as long as you keep a separate folder and separate bank accounts.)

Banking

Set up a separate bank account for your business to keep your business finances separate from your personal finances. Look for a free checking account for small business with a debit card (if you like the convenience of a debit card). Keep your check register up to date.

If you will be using a credit card, apply for a separate business credit card and look for one that will send you a detailed categorized statement at the end of the year.

Taxes

If you need tax advice it is best to consult someone qualified in your state to help you. When you are just getting started, make sure to have a "My Business" folder and file some essential pieces of information:

• a business plan,
• some records related to using your car and mileage records,
• a marketing plan.

So, now you have two files, minimum: "My Business" and "Business Financial".