Money Management for Your Business: This is How to Get Started

Money management is rarely an enjoyable conversation for most people. It’s stressful, confusing, and uncomfortable. That is, unless you do accounting for a living, like me. I love inspiring people to take hold of their finances, create processes for record keeping, and improve efficiency through various technologies.

As women, we not only run our homes, but many of us run businesses as well, making it even more critical that we are capable of managing our money. Someone told me once that we (humans) are like a coin in God’s back pocket. He knows it’s there, he’s saving it for something special, and he can spend it however he wants. That’s how he gives it purpose.

Now, take that same principle and apply it to your money. You know it’s there. Are you saving it for something special? Do you know how you’re spending it? If not, how can it have purpose? It’s very important for us to have knowledge of our spending habits and to be intentional with our money.

You can apply that same principle to business finances. Are you running a side-hustle? Do you own an online store or even a full-fledged business? It can be confusing and cumbersome knowing how to tie this all together into a simple, actionable process. Let me help you.

How to Get Started:

1. Separate Business and Personal Money

Even if it is your side-hustle, it’s important to know if your business is turning a profit or draining your bank account. There are a few ways you can do this. The best option is to have separate bank accounts. Business money should go in and out of a business (or at least separate) checking account, and you should have a business credit card (if you use one at all). All business purchases should go on the business credit or debit card, and the credit card bill should be paid from the business checking. All business income should be deposited into the business checking. You get the idea…

If you cannot use separate bank accounts, at least record all business expenses and business income as “business money.”

2. Use a Software

It is 2019! It has never been easier (or cheaper) to have some sort of bookkeeping software on your computer, phone, tablet, or, my preferred method, in the cloud.

Below are the best software for bookkeeping:

Side-hustlers, network marketers, free-lancers: Quickbooks Self-Employed

It’s only $10/month (they often offer discounts as low as $5/month).
This is the most basic accounting tool for business, and they build a chart of accounts for you.
When you download the transactions straight from your bank, you can choose “business” or “personal.” If nothing else, you will at least have the two separated.
It also tracks mileage, has its own app, and makes it easy to send invoices while on the go.

Small business owners who need true bookkeeping: Quickbooks Online

There are three different levels, starting at $20/month (they also offer discounts as low as $10/month).
For the person who has business bank accounts, needs to track their expenses by category, and sends their data to a CPA (or uses themselves) for taxes at the end of the year, this is for you.
It also syncs to most banks, has an online app, processes invoices, bills, and payments, and is easy to use!
In addition to their amazing customer support, there are tons of videos on YouTube to help you get started.

Both Quickbooks options have monthly reports like a Balance Sheet, Profit & Loss, and Cash Flow reporting so you can review the data pulling into the software and know where your business stands.

3. Apps, Apps, Apps!

If this is all way too much and too confusing or you don’t have a business but want some knowledge of what’s happening to your money: download an app. Many apps can also be combined with the above software for even better management.

My Recommendations:

Mint: It’s Free! Created by Intuit (the same company as Quickbooks), Mint is perfect for creating a budget, tracking your spending, and just having a better understanding of your money. It connects to your bank, credit cards, and tracks your bills. Mint is intended for personal spending.

Expensify: This is an app for tracking business spending. It starts with a free level but can be upgraded. Expensify imports expenses from your bank account, allows for photo receipt uploads and creates reports of your expenses. It also syncs to Quickbooks and other accounting software.

Wally: Again, free! This app also tracks your expenses, focusing on personal expenses. Take a picture of your receipt, and it tracks your expenses.

If this information is overwhelming, take it one step at a time. Once you’ve mastered that, re-evaluate and see how you can improve to decide what your next step should be. Start by separating business and personal spending and income. If nothing else, this will help you prepare for tax season.

If you have questions, reach out to your CPA or feel free to email me at Katey@maquickbooks.com