How to Get a Handle on Your Finances (So Tax Season is a Breeze)
Please note: This post contains affiliate links.
It’s March, which means your bookkeeping chickens are coming home to roost.
Maybe you’re a person who diligently tracks their money with razor-like precision. You’ve already sent your 2018 income statement over to your accountant and are just waiting to hear how much money you owe. When your CPA kindly tells you the number, you’ll wire the cash that you’ve saved for taxes right on over to Uncle Sam.
Or maybe, just maybe, you’re like the rest of us mere mortals, who are doing our best to DIY our books using expensive, difficult-to-use software, staring at the stack of receipts piled high on the desk (what do you even do with all of those) and hoping with all hope that your best effort will be good enough to get through April 15 unscathed.
Whatever end of the spectrum you find yourself on, you probably know by now that if you don’t have solid financial records, not only will tax season be a nightmare, but it will be really tough to make everyday decisions about how to spend and save your hard-earned dollars.
In other words, if you’re serious about your business being sustainable in the long-term, keeping good books is not optional.
Bookkeeping is the practice of maintaining accurate and complete financial records for your business. Bookkeeping isn’t the same as tax prep. However, maintaining your “books” means you can file your taxes efficiently, and heaven-forbid, survive an audit.
Information from your books also enables you to produce financial statements like your income statement (also called profit and loss or P&L), balance sheet, and statement of cash flows. These financial statements – if you learn how to read them – are tools to help you see at one glance how your business is performing financially. Having this kind of information at your fingertips is invaluable for making day-to-day financial decisions. But also , if you ever want to raise funding, get a loan, or bring on investors, financial statements are a must-have.
Challenges of the DIY Approach
A lot of people, myself included, start out with a DIY approach to bookkeeping. Doing your books yourself is definitely achievable with the right tools and the right set-up. However, there are some challenges.
Accounting software is designed to be used by accountants, and as a result, it is neither intuitive nor user-friendly for those who don’t have that background.
Us many-hat-wearing entrepreneurs tend to let administrative nuisances like bookkeeping…pile up. Sitting down and doing a month’s worth of bookkeeping is hard. Doing six months worth is definitely not going to happen for most of us.
Even if we feel pretty comfortable, there is always the nagging feeling that you aren’t tracking things correctly. This lack of certainty can be a source of added stress.
If you choose to go a DIY route, I recommend hiring an accountant to help you set up your accounting software. It’s also a good idea to follow up with that person after a few months to verify that you are maintaining the system correctly. If you decide to do your own bookkeeping, it is critical that you maintain your system regularly.
Outsourcing is Expensive
Outsourcing your bookkeeping to a freelancer or accounting firm is a great way to ensure that your books are done correctly and on a regular and consistent schedule. The problem is, these services aren’t priced at a point that makes sense for a lot of small businesses. For example, I’ve seen small business clients who bring in $100-$500k per year spending $600-$800 per month on their bookkeepers. I’ve even seen smaller clients who bring in less than $100k spending $200-$300 per month. And on top of that, you often will still need to pay for your own accounting software to the tune of $40-50 per month.
Finally, an Affordable Bookkeeping Option
After walking through this problem with countless clients, I finally discovered Bench. Bench is an online-based bookkeeping service where a real human does your books for price that makes sense (most people end up paying between $125 and $165 per month). It has been a total game changer for many of my clients who were either tearing their hair out trying to DIY or paying big bucks to outsource to a freelancer. And on top of that, Bench provides their own bookkeeping software (so you can stop fumbling around with that expensive Quickbooks subscription).
Bench was particularly game-changing for one of my 2018 Thrive Program clients. Her business’s disorganized finances was a major source of stress that affected her personal health and her marriage. She had “set up quickbooks” on her to-do list for months on end, but never could find the time, energy, or know-how to get it done.
When she started using Bench, it really was a game-changer. Not only is she less stressed about her finances, but she can actually use the information from her books to make solid and confident decisions about money. In the past year, they have moved to a new facility that is double the size of their previous space and made big-time investments into the future of the business. Without clear financial records, none of this would have been possible.
Another one of my Thrive Program clients recently started working with Bench after a negative experience with her accounting firm. Making this change is going to save close to $4,000 per year. She is using those savings to invest in a re-brand and paid marketing so that her business can continue to grow.
Get Started with Bench Today
I recommended so many people to Bench that I decided to make my partnership with them official.** If you use any link in this post, you can get 20% off your first six months of service. They offer a free month-long trial to all new clients, so you will have the opportunity to test the service before making a commitment.
**I will receive a commission if you choose to work with Bench. This is not a sponsored post and all opinions are my own. Why did I write this? Because I think Bench is a really great service, and I think it will make your life easier.