How to Streamline Bookkeeping for Your Business

streamline bookkeeping for your business

Does the start of the year have you thinking about how to streamline bookkeeping for your business? 

Let’s put it this way: We all have one. A messy closet. A junk drawer. The place where we can close the door and forget about the disorder, at least for the time being.

That ‘messy closet’ is the financial records for your business for many creative entrepreneurs. You keep the door closed and ignore the books until tax time or a crisis hits. Then you open the door and everything comes spilling out. Finally, you remember the vow you made that ‘this will be the year’ to get organized financially and tidy up your bookkeeping.

Getting motivated to streamline bookkeeping for your business

Our family recently stayed with some relatives who live in a gorgeous, clutter-free home. We all noticed how peaceful and calm we felt while there. I was extremely inspired to replicate that peaceful feeling when we came back home. I used that as motivation to start a major decluttering spree in each room of our house.

It’s hard to get motivated to dig into the nitty gritty numbers when it comes to your business. There are so many other things on your plate. So, the record-keeping constantly gets pushed to the backburner.

But what if you knew that the end result was peace of mind, freedom and more money in your pocket? That’s what organized, up-to-date records can do for you.

Start with Taxes to tidy up your bookkeeping

If you’re dealing with a ‘messy closet,’ start with tax compliance.

Are you up to date with paying your taxes? If you are a year or more behind, put all of your effort into getting caught up to the current tax year. Don’t let overdue taxes keep you from driving your business forward.

You may need to hire a professional bookkeeper to at least catch you up to date and get everything ready for your CPA.

Getting set up for proper bookkeeping

If you’re up to date with tax filing, start at the beginning of this year. You need to make sure that you are tracking all money coming in and out of your business.

From the beginning of the year, you will categorize all of your income and expenses for the year. If you’re already using accounting software like Quickbooks Online, make sure you have connected all business bank and credit card accounts. These will automatically pull transactions from your bank feed into Quickbooks.

When you set up your accounting software, a Chart of Accounts was created. This is basically a system for organizing your accounts and classifying your transactions. When you have a Chart of Accounts set up properly, it will be easy to put your transactions into the correct categories. Print out a cheat sheet for yourself to make sure you are consistently choosing the same categories. See example below of a sample photography Chart of Accounts.

Start at January 1 to Streamline Bookkeeping for Your Business

Starting at January 1, you will categorize all of your transactions for the year. Office supplies will be categorized to… office supplies. Assistant pay would be categorized to a COGS subcontractor account. And so on.

Hopefully any business-related income and expenses flow through your business bank and credit card accounts. If there are any business purchases made from your personal accounts, you will want to make sure these are manually entered into your records.

After you’ve finished the first month, you will reconcile all of your accounts. This is a very important step that many people miss. Reconciliation (think old school checkbooks) will ensure that your books are accurate and catch errors such as duplicate entries or missing transactions. In Quickbooks Online, you can use the reconciliation tool to easily compare what is in the system to your bank or credit card statements.

Categorize and reconcile month by month until you are all caught up to date. You can see the fruit of your labors by pulling a Profit and Loss statement and Balance Sheet to make sure everything is categorized properly.

If you don’t have accounting software set up yet, start with a good old Excel spreadsheet. Enter transaction details on each line: Date, amount, vendor, description and category. You can refer to the sample chart of accounts for category options. Once you have the data entered, start a new tab with the totals for each category. These totals are the numbers you will use for tax forms.

Make bookkeeping a monthly habit

Once you’re caught up to date, make it a habit at the end of each month to categorize and reconcile the previous month’s transactions. Not only will you be current with your bookkeeping, but you’ll be able to make informed decisions about spending, cash flow and revenue goals.

Your accounting software has many features that can automate and speed up the process. Just make sure you know how to use these features properly, as they can cause a mess if used incorrectly. 

Speaking of Software…

Which Software Should I Use for Accounting for my Small Business?

There are many good options for accounting software. Some are free, some are not. Some are combined with workflow software. Some stand alone.

Quickbooks Online is a go-to accounting software to streamline bookkeeping for your business that most CPAs will already be using. It will connect with your bank feed and has automations that will help in your workflow. There is a bit of a learning curve, but it’s a great option for businesses who want their books to be as professional as their business.

Another great feature of Quickbooks is that they integrate nicely with HoneyBook and other workflow software/CRMs. Their integration will automatically import invoices and payments into Quickbooks, and make it easy to match with your bank feed.

Note: Quickbooks Online is sometimes confused with Quickbooks Self-Employed. It’s the same company, but Quickbooks Self-Employed is meant for independent contractors and is somewhat limited. It is less expensive, but if your business is substantial and growing, we recommend getting properly set up in Quickbooks Online.

A Test of Organized Books

What would you do if your accountant asked you today for a Profit and Loss Statement or Balance Sheet? Would you panic?

If you can confidently download those reports and send them off, congratulations. If, like many creative business owners, you would start sweating and stalling, then take a good look at your current system.

Try pulling your Profit and Loss Statement and Balance Sheet. Are they simple and well-organized? Are you able to clearly understand your revenue and profit margin for each month and year-to-date? If not, it’s time to do some research and/or call a professional.

Tax compliance is the goal of organized books is first of all. The IRS wants an accurate record of the money coming in and out of your business each year.

The next goal when you streamline bookkeeping for your business is learning from your numbers so that you can truly grow and scale your business. Making proactive, strategic decisions is key to a healthy business. It could be that messy books are holding you back from increased profit and growth.

It may take some time to declutter and freshen up your financial records. Sometimes it gets worse before it gets better. But on the other side of the mess are up-to-date, 100% accurate records. And with those, you will be able to analyze, strategize, scale and increase earning potential. You’ll be empowered to reach your goals and grow your business.

So…no more messy closets in your business. It’s time to open the door, tidy up and tackle it head on. Happy cleaning!

Ready to tidy up your business bookkeeping and finances? Mention HB2021 when you inquire to get one free month of bookkeeping services or $100 off Quickbooks setup from Tanya.


Tanya Hirschy

I’m Tanya, the owner of Tidy Books boutique – we do bookkeeping for photographers and other creatives. I’m a mom of 6, so I can handle lots of chaos! I love Jesus, loose-leaf tea, reading, road trips, camping and good conversation.