“I finally know what distinguishes man from the other beasts: financial worries.”
– Jules Renard
Here’s an all-too-common scenario: A seemingly successful coach (or service provider) is hard at work growing her business. She’s working lots of hours, and her hourly rate is respectable. But her cash flow is dismal.
Because she’s working so hard that finding the time to actually take control of her money is impossible.
Invoices don’t get sent on time. Past due balances are ignored. Taxes aren’t done. And maybe worst of all, she’s got dozens of recurring payments that go out automatically each and every month, and she has no idea what they are or if she’s even using the programs she’s paying for.
Sound familiar? Sadly, that’s exactly what a lot of “successful” businesses look like. When you work at home, and you’re accountable to no one but yourself, it’s far too easy to let these little things slide until, like an avalanche, they have a devastating effect on your business.
The good news is, cleaning it up is easy, when you take the time to put some trusted systems in place.
Start with your billing. Sign up for (and use) a system such as Freshbooks or Harvest, which will automate your timekeeping and produce an invoice with a single click of a button. Then put your billing day on your calendar as an unbreakable appointment. I like to put my recurring dates as an all day appointment and review my dailies the night before.
Log into your timekeeping app, generate your invoices, and click send. You’ll be done in a jiffy. Not only that, but most billing systems automatically send follow-up messages for unpaid invoices, so you don’t have to worry about tracking down those slow pays.
For your expenses, use a single system. That might be PayPal or a dedicated credit card or even your business checking account. Whatever it is, be sure it has a reporting feature that will allow you to send monthly statements to your accountant. I have a business PayPal and a business checking account because some of my clients like to pay via PayPal. In those cases, I just transfer the money over to my business checking as soon as it hits the PayPal account.
At the end of every month, bundle that up with your sales report and your receipts, and send it off. If you take care of your own record keeping, have a dedicated folder on your computer for each quarter. I suggest storing these in Box, Google drive, or DropBox (or a separate jump drive). When tax time rolls around, you’ll be sitting back with your feet up while everyone else scrambles to find documents and update their accounting system.
If you do your own taxes (kudos to you!) then look for tools that will talk to each other easily. For example, you can download a Quickbooks file right from PayPal for super-fast reconciliation at the end of every month. That alone will save you hours of “doing the books.” If you tend to use one system religiously (like Quickbooks or Dropbox), make sure that when you add any new tools, check the integrations to make sure they integrate with your favorite apps.
Just putting these simple systems in place can easily save you 10+ hours per month, but the even larger benefit is that the money work will get done. For me, the longer something gets put off, the harder it is to do it or get everything in order. Use easy systems to make things less time consuming and you’ll be happy to get it done!