Bookkeeping |Small Business | Finance| Money| How to

Have you ever sat down in front of your computer to do your bookkeeping and thought to yourself, “Why does this have to suck SO much?”

*Everyone in the world nods their head*

Even I, a professional bookkeeper, think that sometimes!

It’s because bookkeeping is synonymous with tedious. We imagine our bookkeeping like this- huddled at our desk surrounded by a 4-foot stack of receipts, squinting at an endless Excel spreadsheet of tiny numbers, pulling our hair out from frustration.

Sounds bad, doesn’t it?

The thing is, bookkeeping DOES NOT need to be that hard or tedious. It can actually be pretty painless if you make a few simple tweaks to your routine. Over the years of being a bookkeeper, I’ve developed tricks to getting bookkeeping done quickly and easily.

Here are my top tips for pain-free bookkeeping:


Have complete separation of your business and personal finances

If you mix your business and personal finances (yes, even if you have *just one* credit card for both), your bookkeeping is going to take forever. There’s no way around that.

The reason is that instead of ONLY categorizing your transactions, you throw in an extra step- figuring out if something is business or personal. Sometimes, like with groceries, this can be pretty obvious. Other times, like eating out, this can be a huge pain in the ass.

You’re asking your brain to work twice as hard and you interrupt your workflow. When you’re only categorizing you get in the zone. All you have to do is think about your categories and assign them. But, when you’re figuring out if something is business or personal, you open tabs to check your calendar, google expenses, and dig around your wallet for receipts.

This is the perfect opportunity for distractions to take over! For example, you look at your calendar and remember an appointment you need to reschedule and then spend 10 minutes writing an email about it. Or you search Google and see an ad for a super cute pair of boots, remember you need a new pair of boots, and get lost in a boot vortex.

Whatever it is, interrupting your workflow with an investigation opens the door for distractions and derails your bookkeeping.


Print a cheat sheet of your income and expense categories

Most small business owners get tripped up in their bookkeeping when they don’t know how to categorize transactions or are completely unfamiliar with their deduction categories.

Picture this: you’re doing your bookkeeping and come across an expense that you aren’t sure how to categorize. You ask Google, get 5 different vague answers, and then decide to pick one so you can get on with it.

The deduction category isn’t in your program yet, so you add it in. A few weeks later you realize that you have two similar categories- one is called Supplies and one is called Business Supplies. Now you have no idea which one to use. You ask Google AGAIN, get another set of vague answers, and decide you hate this whole damn process.

Avoid this nonsense by making a cheat sheet of your income and expense categories and ONLY stick to this cheat sheet. Print out the cheat sheet and keep it next to you every single time you do your bookkeeping.

Make notes next to each category with WHAT expenses go in that category and stay consistent. Over time, you’ll memorize your categories, speeding up your bookkeeping in the future.

(hint- this blog post goes into common tax deductions in detail and includes a tax write off cheat sheet that you can use in your bookkeeping)


Wait to categorize expenses you are unsure about

So what do you do if you come across an expense that you have NO idea what it is?

Skip it and move on to other expenses. That doesn’t mean you’re not going to categorize it- it means that you’re going to do your investigation later.

You may be sensing a theme here and that’s not to interrupt your workflow. We’ve already talked about how investigating opens the door for distractions, but sometimes an investigation isn’t even necessary. Sometimes, if you keep going, the other expenses will jog your memory.

Also, when you do all your investigation at once, you’re in investigation mode. Being in a mode eliminates distractions because instead of aimlessly looking through Google, you have a job: figure out 5 expenses. That job keeps you on track.


Make a weekly and monthly task list

Have you ever sat down to do your bookkeeping and then stared at the screen, unsure where to start? If so, then you need a task list.

Anytime I’m assigned a big bookkeeping project, the first thing I do is write down all the steps I need to take. Then, I order them to build off of each other. That way, I’m not doing a hundred little actions that conflict with each other.

I take 30 minutes and think critically about when I should complete each step so that my process is efficient.

It seems tempting to skip making a task list because it’s another 30 minutes you have to spend doing something. But a weekly and monthly task list save you time in the future. You’ll have a clear starting point every time you do your bookkeeping and stop wasting time figuring out what’s next.

By building the habit of the task list, your mind and body will AUTOMATICALLY do your bookkeeping. You’ll be amazed at how fast you get and how much less brain space it takes.

This blog post breaks down my complete process for making a financial task list.

By using a task list, your mind and body will AUTOMATICALLY do your bookkeeping.Click To Tweet


Do your bookkeeping a little at a time

While I advocate for doing your bookkeeping once a week, the truth is I do mine every day. And it takes me less than 5 minutes a day.

How? Doing a little at a time, day by day keeps things so up to date that there’s never a bunch of stuff to do.

Doing your bookkeeping a little at a time drastically cuts down how long it takes every week and month. You don’t have to do everything every day, either. Instead, pick ONE task that, by keeping up with it, will make everything else easier.

For me (and most people) that task is categorizing income and expense.

Find one small pocket of time to spend 5 minutes on income and expense categorization. Some of my favorite times are:

  While I’m on hold on the phone

  While on public transportation or Lyft, using my accounting programs app
  The random 10-15 minutes between coaching and consulting calls
  After I finish one big task and before I move on to the next one
  At the end of the day, when I’m tired but want to get “one last thing” done

Find one small pocket of time to spend 5 minutes on income and expense categorizationClick To Tweet


Outsource the hard stuff

Sometimes the reason your bookkeeping is taking too long is that you’re stuck on one thing. These are usually the more complicated processes in bookkeeping and you’re worried that you’re going to screw everything up by doing them wrong.

If you keep getting stuck on one thing in your bookkeeping just outsource it.

I know a lot of small business owners who do their own books and outsource a quarterly reconciliation of their accounts. Some pay someone to spend an hour reviewing their bookkeeping every quarter and identify mistakes. Others keep a list of questions and spend an hour consulting with an expert.

Outsourcing the hard parts is a great way to keep your books yourself while having the safety net of an expert. You save money by doing the bulk of the work yourself, but you also get peace of mind from an expert review.

The trick to outsourcing is to do it regularly and every quarter. Don’t wait an entire year before outsourcing because, if you’re making the same mistake over and over again, it’ll take a lot of time to fix it.

Identifying errors on a quarterly basis means you catch the mistake early and can fix them immediately.

I’d love to hear from you in the comments- which of these tricks are you going to try with your bookkeeping?

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