Bookkeeping is one of our least favorite things to do as embroiderers! We did not start our embroidery business so that we could do bookkeeping! We are born creators, not bookkeepers, but unfortunately, it is part of owning a business and is an essential part of the business that we must be on top of! You may feel like you are drowning in paperwork. Setting up a complete embroidery business bookkeeping system is essential in staying organized.
It is critical to organize every part of your business, and your records must be organized for easy and accurate bookkeeping. Without good record organization, it can become very overwhelming when you need to produce some important information, and it can cause unnecessary stress in your personal life and your business.
Have you spent many days just before filing your taxes trying to get everything organized? Trying to pull it all together at tax time when it is disorganized is really hard and time-consuming, not to mention how frustrating it can be. You could be spending this time getting more jobs out, but instead, you have to stop producing your embroidery and concentrate on the taxes in order to stay compliant with the government.
Your business generates a lot of paperwork and it can easily get out of control if you do not have a good system for taking care of it. This was a huge struggle for me until I realized that I could not continue to do it as I was and get my jobs out at the same time. I had to take some time out, stop the crazy disorganization of papers, and get my books in order.
Keeping accurate financial records is necessary for the growth of your business. You need to be able to look back and compare one year to the next so that you can plan more efficiently. You also need to know which area of your business is performing the best and in which area you are not making enough money. Without accurate records, this is impossible.
If you are new to bookkeeping and you have not started to use any type of accounting software you must first go through and organize all of your records. You must have them in order before you can even think about using any type of accounting software.
Start The Process of Organizing Your Bookkeeping Records for Your Embroidery Business Bookkeeping System Set Up!
Step 1- Separate the receipts for your expenses and for your income. Make sure that you have every little piece of paper because it can make a difference at tax time.
Step 2– Take the pile of receipts of your expenses and separate them by the month. Do the same for your income.
Step 3– Separate the piles of expenses and income for the first month into piles of like kinds.
Step 4– Create a spreadsheet with columns of the like kinds for your expenses and add the receipts into each column that is applicable. By like kinds I mean, Office supplies, loan payments, travel expenses, etc.
Step 5– When finished with the month, place the receipts into a file folder marked by the Month and place the file folder in a file drawer. Keep one file drawer for this purpose only.
Step 6– Repeat this process for your income statements.
Step 7– Total each column of expenses for the month. Do the same step for your income.
Step 8- Repeat this process on a separate spreadsheet for each month.
Organizing them in this manner will make it easier for you to start the process of working with accounting software. I know that the term accounting software is scary if this is all new to you, but it really is very simple to use once you have your expenses and income organized.
On February 13th and 14th, I am having an Embroidery Business Bookkeeping System Workshop where I will be showing you how to set up your entire bookkeeping system. This will be a 2-day workshop from 10:00 AM to 2:00PM Eastern. This is your chance to be able to get your entire system set up the correct way so that you will be able to see which area of your business is profitable and which area is not profitable.
I am using QuickBooks but this entire system works no matter what accounting or bookkeeping program you are using.
Click here to get signed up! Don’t hesitate to get signed up! We only have a limited amount that we can accept!