What Do I Need To Keep Track Of?

As a business owner, you’re told you need to track your numbers, but what does that actually mean? What are you tracking? Why are you tracking it? How do you track it? Tracking your finances in business should be something you start on day 1 so that you don’t need to go back in a year and try to remember all of your income and expenses and what category they should be filed under. When you start to track your finances, you get a different view of your business that is clear and it presents you with a new language that your business actually speaks to you.

It’s time to talk to your business through your money.

What we’re talking about

Why Do You Track Your Finances? What Numbers Should You Be Tracking? How Do You Track Your Finances?

Why Do You Track Your Finances?

One of the biggest reasons to track your finances is because at some point, you’re going to have to inform the government about your business. Tracking your numbers should be done for tax purposes and to discover information about your business. It gives you an insight as to what your profits are and where you are spending your money. 

What Numbers Should You Be Tracking?

You should be tracking your business expenses and your gross income which is all money before expenses. Your expenses will include anything that is a cost or expense in order for you to run your business. If you run a product based business, then you might include the materials you have to buy to create your product. If you run your business out of your home, then there you should be tracking not only your business expenses but the cost of your utilities or any home improvements. 

How Do You Track Your Finances?

I like to give 3 options for ways you can track your finances. The first option and my least recommended one is to not record your numbers, but simply keep your receipts and total them at the end of the year. This can be cumbersome and definitely isn’t organized. Another option is to track your finances utilizing a spreadsheet. This is great to keep everything in one place, but it lacks the ability to reconcile it at the end of the year. My number one recommendation on how to best track your finances is to invest in a digital bookkeeping program such as QuickBooks Online, Zero or Wave. They sync with your bank accounts and even memorize your spending habits. 

Are you talking to your finances and tracking them?

LINKS MENTIONED

Income & Expense Tracking Spreadsheet - Biz Finance Survival Kit

Quick & Dirty QuickBooks Course