www.inkthinkerblog.com — All year I’ve been putting off entering my business expenses into my QuickBooks because I got it in my head that it would be “too haaaaaarrrrrd” (pronounce that with about six syllables to get the full effect). Since I’m looking at buying property, my mortgage guy needs a P&L from me demonstrating that I’m not a huge self-employed risk, which, having not entered any of my expenses into my QuickBooks all year, I don’t have.
Flash back to this weekend, when my QuickBooks program informed me that it was taking its ball and going home because it doesn’t like Internet Explorer 7.0. Fantastic.
Flash forward again to this morning, when a nice QuickBooks account manager named Peter talked me into shelling out $400 on QuickBooks 2007 Premium, which I can supposedly customize like there’s no tomorrow to accommodate the “consultative” nature of my business. (It’ll be here on Friday, so I’ll let you know.)
So anyway, it occurred to me that if I have to learn a whole new version of QuickBooks, I’d better make sure all of my info is entered correctly in the current version so it all transfers properly, yadda, yadda, yadda, and hey, maybe I should figure out that expense-recording thing. Out comes the overflowing oaktag “2006 KKF Expenses” folder (aside: Am I the only person on the planet who doesn’t call them manila folders? What’s up with that?) with its plethora of teeny, tiny, unreadable scraps of paper, crumpled receipts, and cryptic notations. And WHY didn’t I start doing this in like January? Two hours later…
…I’m astonished at how much this business is costing me, and I’m not even talking about the physical and emotional expense (ba-dum-ching!). Like seriously, how did I spend this much money on business supplies? Last year I bought a laptop and a desk and a huge bookshelf, so I was expecting a lot of expenses. This year, however, I bought a printer and a new desk chair and that’s about it. Except for the eighty-five bajillion other things! Professional organization memberships, conferences, transportation to said conferences, research materials (books, subscriptions, etc), professional development, software, business cards… It all adds up.
I can’t say definitively that I would have spent less if I’d been actively tracking it all along, but at least I wouldn’t have been quite so flabbergasted at the total! My advice to you: At the end of every day (or even every week, whatever), gather up your receipts and enter them into your record-keeping system of choice. Don’t let yourself be surprised. It’s not fun.
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You should also think about creating a balance sheet. I haven’t yet done this, but after taking my financial management course this semester, I see that the balance statement is a great way to see all your assets and liabilities on one page. It gives you a good snapshot of how you’re doing. Treat your small business like a corporation!