When Should I Start Tracking My Bookkeeping? Why You Need To Start NOW

Do you track your bookkeeping in your business? One question I get a lot from new business owners is, “when should I start tracking my bookkeeping,” and it’s an important one to ask. Believe it or not, the time to start is NOW, even if your business is brand new.

Unfortunately, a lot of new business owners don’t think they need to track bookkeeping if they aren’t making any money yet.

I’ve heard all the excuses why people don’t track their bookkeeping, and that they’re making a loss is the number one reason. Why track it if you’re making a loss, right?

But it’s vitally important to track your bookkeeping no matter where you are in business. Not only can it help you make better business decisions now, but it can also set you up for financial success down the road.

Here’s the truth…

You have to know the numbers in your business if you want to know your business.

It’s crucial to know what’s happening in your bookkeeping if you want to expand. Because your books–your numbers–tell a story about what’s going on in your business.

Every action you take in your business is correlated to a number. This is why it’s so powerful to track your bookkeeping even if you’re making a loss in your business. It tells you where you are now, what is working and what is not, and what to do to shift your numbers to your favor. This is a priceless thing.

Let me share a story that just might change your mind about when to start tracking your bookkeeping.

In my first business, I was a virtual business manager. I helped my clients with daily operations like data entry, customer service, pretty much the details that keep your business running. One particular client told me she’d love to have a bookkeeper because she constantly felt out of control in her business. She told me the end of the year was a huge stress-ridden scramble to get their numbers together for tax time, and it was really getting to her.

When I asked why she didn’t have one, the answer was simple. “I’m not making any money, so I don’t feel I should have one yet.” she told me.

Sounds reasonable, right? If you’re not making any money, it’s tough to find it in your budget to hire anyone, let alone a bookkeeper to tell you under no uncertain terms that you aren’t making any money!

At the time she was about two and a half years into her business. She’d been losing money every year so far, and was going on another loss in her third year. So far what she was doing clearly wasn’t working. She wanted to scale her business, but how?

Then I let her in on a little-known truth about bookkeeping:

Monthly Tracking is the key to scaling a business. When to start tracking your bookkeeping is NOW.

After we had that conversation and I made my case, she decided it was time to go for it. She hired me to take charge of her monthly bookkeeping, get it done, and have one less thing to worry about in her business.

We started with these basic questions:

• Where is the loss in your business coming from?
• What is driving the loss?
• Why is there a consistent loss in this business when you want growth instead?
• What factors are making up this loss?

What happened next was inspiring…

Once I started tracking her bookkeeping, we began finding the answers to these questions. Slowly but surely, her business began transforming. Within the next three years of consistent bookkeeping, she went from a loss to a 6-figure year. This was after making consistent losses for the first three years in her business!

The best part was that we did this in a few simple but powerful steps.

First, we looked at her pricing structure to ensure she was profitable for the product she created, and adjusted accordingly. Second, we found a way in her budget to hire a few staff members, so she could take some of the tasks off her plate. Third, we created a designated work space in her home where she could focus exclusively on work. Finally, we set up solid policies, procedures, and energetic boundaries to help streamline everything.

These are the simple steps that took her from a loss to 6 figures. Simple, but powerful!

I never would’ve known any of these steps, though, if I hadn’t seen the effects of a lack of tracking in black and white. I’d seen it happen in many of my client’s businesses. I also saw what happened when you did ask the right questions and take the right actions.

So, if you are currently making a loss in your business currently (or making a small profit) and you feel like your dreams of making big profits and big impact seems out of reach, take a look at your bookkeeping. Start tracking your books on a monthly basis now.

If you’re not tracking your books yet, here is a quick checklist to help get you started.

Bookkeeping Startup Checklist:

• Enter/Allocate items in your QuickBooks Online Dashboard
• Save Bank and Credit Card Statements from bank login to a secure folder
• Reconcile Business Checking Account
• Reconcile Business Credit Cards
• Save any Bank Loan statements to a secure folder
• Upload receipts into QuickBooks Online or save in a secure folder
• Run an Accounts Receivable Report (money owed to you) to ensure it’s correct
• Review your Profit & Loss Statement and check for errors or missing information

These steps will help you get started and get familiar with your books. This way, even if you decide to hand off your bookkeeping to someone else now, you’ll know what you need them to do. You’ll know what to ask for, and how to monitor their work. This will make it easier to help them help you manage your books, as well as to know if they or anyone else in your business might be stealing from you (a rare thing but it does happen).

You don’t have to be an expert bookkeeper, but do know the basics about your books. Start tracking your bookkeeping now. This is the way forward to the big impact and big profits you desire!

I hope this has helped you decide when to start tracking your bookkeeping!

Do you track your bookkeeping every month? What bookkeeping questions do you have? Leave me a comment below.

Until next time,

Love, light, and MONEY, honey…

xo

Kaylee