March 17, 2017
Home Business 101: Tips For Tracking Your Money
Whether you’re new to working from home or you’re an old pro, it’s important to keep track of your money. That doesn’t just mean watching what you spend, it also means paying attention to the flow coming in. If like most entrepreneurs and freelancers you have more than one place flow is coming in from it can be even more important to be tracking that money.
Tracking the money that comes and goes from your home business helps you differentiate work money and personal money. Plus, you’re going to need all of this information on a yearly basis when tax time comes around. Here are a few things that can help you better keep track of your workday cash flow.
Find Some Good Software
You need to have some software on your computer that can help you keep track of your income and the expenses you have going out. While you can set up a document where you’ll put all this stuff where it goes (like with Google Drive), but having software dedicated to your expenses things will be easier to keep track of.
Software does take a bit of an investment. Make sure you keep your receipt for this as well, since it can also be used as a tax write-off.
Invest In A Filing Cabinet
Even though you live in a world of technology, sometimes doing things the old fashioned way can still be useful. That means that you want to hold onto your paperwork, from everything. In order to do that wisely, you should invest in a filing cabinet.
There are programs available for your computer that can sort your receipts and paperwork when you scan it in. Just make sure to always have a backup (save the stuff on a disk or on a thumb drive).
Keep Your Receipts Sorted
You should be keeping your receipts sorted as they come in. This can save you a lot of time when it comes to dealing with your taxes. As you get receipts in you can sort them by month, at minimum, in envelopes.
You can also scan in your receipts to your computer and sort them in separate files. Your receipts could be the one thing that keeps you from paying an arm and a leg if you are a 1099 contract worker or you simply only make money from selling your own products and services and don’t pay in taxes throughout the year.
Keep Business Separate From Pleasure
Part of your money tracking should be to make sure you’re keeping your personal funds separate from your business funds. If you buy new clothing that you’re using for work you can hold onto the receipts, but if you buy some new stuff for your kitchen it’s not a work expense.
You may also spend business money out on the town, maybe taking a new client out for drinks or buying them a gift basket for signing with you. Make sure you keep these receipts as well. However, taking your family out to dinner is not a business expense.