Are you the kind of person who just avoids doing your bookkeeping in your business?
It really just isn’t something you like doing, plus it stresses you out.
What if you do something wrong?
And that wrong thing sends a bat signal to the IRS that you need them to show up on your doorstep to audit you?
So it’s just better not to do the bookkeeping at all.
I mean, it’s much less stressful to not think about your bookkeeping and actually getting it done than it is to sit and struggle through it. Right?!
It’s not that close to tax time yet. You’ll figure out what to do when it gets closer to time to file your tax return.
Only then, it’s 87 times more stressful.
You can’t find all of the documents that your accountant is asking for.
You aren’t even sure if you have all of your expenses accounted for. I mean, you did buy things for your business from your personal bank account.
And to top it all off, you now have a tax bill and not enough cash in the bank to pay the bill.
It’s just so much easier for you to focus on the day to day tasks of running your business, working with your clients and being present on social media.
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But where do you even begin?
You know you need to start getting things in order, but the question remains, where do you even begin?
First, you need to figure out if you are going to do your own bookkeeping, or are you going to outsource it.
If you are going to outsource, then you need to find the right person to do it for you. (Hint: this is something I can do for you, book a quick chat right here and let’s see if working together is a good choice.)
If you are going to do your bookkeeping yourself, then just keep reading and follow the steps.
Catching up on your bookkeeping can be stressful
Yes it really can be quite stressful, especially if you think bookkeeping is already stressful enough, but now you have a whole year of bookkeeping to get done.
Start with scheduling in time, approximately 2 hours per week to start with.
You want to be able to find a time that you can work without any other interruptions.
Make sure the kids are out of the house or being taken care of by another adult.
Make sure the dog doesn’t need to go out for the bathroom.
Make sure your partner isn’t going to come home from their job and interrupt anything.
You just want a time where you can spend at least 2 hours a week, completely uninterrupted to work on catching up on your bookkeeping.
Once you find this time, or moreso, make this time available, put it on your calendar. Make it a nonnegotiable appointment that you can’t get out of.
Don’t forget that your bookkeeping needs to be done BEFORE the deadline to file your tax return. In the USA, this deadline is usually April 15. Your goal is not to finish ON April 15, but before that.
Also check out: When to do your bookkeeping tasks
Gather all of the documents you need for your business bookkeeping
The next step is going to be to gather all of the documents that you need.
As an online business owner, most of your documents are most likely electronic already.
You’re just going to need easy access to them.
Anything you’ve purchased throughout the year, you’ll need the purchase receipt. If the business you bought from didn’t email you a receipt, log into your portal, many recurring expenses don’t always email a receipt, but will keep a log of all receipts in your online portal.
Or if they aren’t available in the portal, email the business owner to ask for a copy of the receipt.
You need to make sure you have copies of all of your receipts saved for your bookkeeping anyway, so make sure you keep everything.
Make sure you have all of your sales figures. Look in PayPal and Stripe for your totals, if you use those to accept payments. Then look anywhere else you tend to accept payments for your business.
Finally gather all of your bank statements.
Side note: if you sign up with a Quickbooks Online account, sync your bank account and then log into Quickbooks once a month, your bookkeeping will be so much easier because all of your transactions already show up in Quickbooks for you. Now you just have to sort them and make any needed adjustments.
Start catching up on your bookkeeping
Now that you have everything gathered in one place, it’s time to start getting your bookkeeping done.
Go month by month.
Start with January and work on getting all of the transactions from your bank statement into your bookkeeping program.
For each expense that you enter, make sure you have a physical copy of the receipt.
Either save the receipt directly to the expense item in your bookkeeping software. Or save it to your bookkeeping file on your computer.
I like to keep everything saved on my computer. I will create a folder for each year. Then inside each year folder, I will save each expense item with some specific naming to it. It always has the date of purchase to start with. Then the vendor name of who I bought from. And finally the amount of the invoice.
This process makes it very easy to find something when I have a question about a purchase or even if someone else has a question about a purchase.
The easier it is to find your receipts, the easier your bookkeeping is going to be.
The most important part of getting caught up on your bookkeeping is to make sure that you go chronologically. You can’t start with September, then go to March, then July, etc. You must start with January and work your way through the calendar.
You’ll give yourself more of a headache by skipping all around.
You can get caught up on your bookkeeping
Just take it one day at a time. The more you stress about getting it done and even how much it just stresses you out, the worse the whole process is going to be.
If this process is just going to be something that you can’t focus on and really get done, then you need to hire it out.
If you do hire out your catch up bookkeeping, just know that you need to do it as soon as possible. Don’t wait until April to hire someone to get it caught up for you.
The earlier you get your bookkeeping done, the earlier you will know how much money you owe for your taxes as well. That way you can plan for paying your tax bill and not have to stress about that as well.
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