Tag Archives: direct sales accounting

How to Handle your Business Expenses

Accounting and paperwork are scary to a lot of business owners, but it is a part of life. By setting up a system, you will make your life a lot easier.

Receipt Please

Receipt Please (Photo credit: Peter π)

For most people, accounting is not a priority in their business, but when month end or tax time comes, they are scrambling to find all their documents and prepare things. But if you take a bit of time each week or month to track your expenses, you will be ahead of the game and you will not have to look all over the place to find your paperwork.

One Location – First things first, put all your receipts in one location. This way, even if you do not have time to deal with it right now, you will know where to find it.

Make Notes – Mark your receipt with any relevant notes such as you were mailing a parcel to Jane or you took Joan out for coffee to discuss why your business would be a great fit with hers. These receipts are easy to forget their purpose.

Legibility – Make sure that the receipt is legible. If it is not, you can ask the location to write you a written receipt. If it is on the glossy till paper, you may want to photocopy or scan it, as those tend to fade over time.

Keep Current – Try to work on your books every week or at a minimum, once a month if you do not have a lot of transactions. This will save you a lot of time and headaches down the road.

Filing – Have a filing system that makes sense and you can keep up with. Challenge yourself to see how fast you can find something; if you have to go through multiple folders then it is not the right system for you.

Credit Cards – A great way to keep track of your spending is to put everything onto a credit card or debit card where you get a statement listing the expense. You won’t forget about it this way. Do not use the same card for your business as you do for your personal spending, as this can be very confusing and cause issues at tax time, especially if you are audited.

Envelopes/Folders – Envelopes and folders are a great way to organize your paperwork. Put unrecorded receipts in one until you record it, and then move to the appropriate folder once it’s recorded. You may choose to organize these by month or by type of expense; whichever works better for you and makes more sense.

One of the best reasons for keeping your expenses current and tracked is that you can see at a glance how well your business is doing and where you may be spending too much money. This is very important for a small business owner.

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Keeping up on your Direct Sales Accounting

While accounting is not high on most people’s lists of things to do for their direct sales business, it is still something that is important to do.  And if you do it on a regular basis, it is that much less painful at the end of the year when it has to be done.

Do What You Can – Depending on your company and your business, you may have a hard time keeping your books done up 100%.  But chances are there are things that you can keep up to date.  For instance, I update my credit card and banking records every month once my statements are generated.  This task only takes me about twenty minutes a month so they are easy to do.

Collect Data – Even if you cannot input anything for whatever reason, you can make sure that you have all the information you need.  If you tend to have receipts floating all over your house, gather them up and put them all in one spot.  Find an envelope and label it “Receipts to Input” and then leave it somewhere for you to enter when you have the time.

File – Filing seems to be one of the worst jobs when it comes to running your business, but it is important to do.  The more you pay attention to it, the less you have to do later and the less painful it is.  This is a great task to do when you are on hold somewhere or you are waiting for something and you do not have time to get into something which requires a lot of attention.

Remembering – Need another reason to do your accounting on a regular basis?  Have you ever sat down to work on the books and you look at a receipt and cannot remember what it was for?  And it was six months ago?  Chances are, you are going to give up on it and move on, and hope for a sudden brain flash later.  At least make notes when you encounter the item and input it later.

Regardless, if you only have a few minutes, you can get some basic accounting tasks done.  If you have more time, then you can get more done.  Try to schedule a few hours each month for your accounting and see how much better it goes.

PS – This is my first year doing this, in oohh.. 4 years of direct sales.  It is so much better!

 

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