Make Bookkeeping Faster & Easier in Less Than 10 Minutes a Day!
Bookkeeping is one of those topics that few people love to talk about. For most business owners, bookkeeping is like a visit to the dentist: Unpleasant but necessary. (Not everyone is like that, of course… and we’ve all become bookkeepers or accountants). In this issue of Tips In Ten, I’m going to show you how to do your bookkeeping so blazingly fast, you’ll spend 10 minutes or less doing your books. (Depending on your business, that might be 10 minutes a day or it might be as little as 10 minutes every couple of days).
Although bookkeeping isn’t an activity you’d prefer to spend your time doing, I’m sure you realize how it important it is to have good, clean books: It makes tax time easier, you can navigate audits if they happen, and (most importantly), you can make better business decisions when you have a clear understanding of your financials.
This Tips In Ten article is divided up into 2 sections. The first section is a list of ideas and things to have in place so that when you get to part two of this issue, you can do your bookkeeping in just 10 minutes.
Part 1: Master your bookkeeping with these preparatory steps
Tackling your books
Part of the problem is that bookkeeping feels like an arduous task so people put off their bookkeeping and it piles up and then they have to devote a couple of frustration-filled days to navigate through it all. What feels like an arduous task becomes an arduous task! So the most important thing you can possibly do for your business’ books is to schedule 10 minutes a day every single day to stay on top of your bookkeeping. Eventually, you might be able to cut that back slightly but a daily 10 minute look at your numbers will make even this challenging task a lot easier.
If you have a backlog of bookkeeping tasks to do, you might want to spend a day or two catching up but it will feel better to just break up your catching-up effort over 10 minutes each day for a while. Do a solid 10 minutes of work and then stop for the day. It will feel considerably better and you will tackle your books faster than you think, especially when you use some of the other bookkeeping mastery techniques I’ve listed below.
So, set aside time right now in your schedule to spend 10 minutes doing your books.
Use online bookkeeping software
If you are using the old fashioned pen and paper approach to bookkeeping, or if you are using simple software like an Excel spreadsheet, there are a lot of options out there that you should look into. Thanks to some serious advancements in online technology, you can automate so much of your bookkeeping to make it even faster and easier for yourself: There are some good core online bookkeeping solutions that will sync with many of the popular web applications you use in your business, which means you can automate a lot of your business processes!
Start by looking for an online bookkeeping solution. I’ll give you a couple of examples here and I’ll be speaking generally about them for the rest of the issue (and they might or might not have all of the features I describe).
- IAC-EZ (Disclosure: I started this company and although I’ve sold it, I still have an affiliation with it).
- Clarity Accounting
- QuickBooks Online
There are others but these are the big names in the business. They come with a subscription fee and there is usually some entry functionality, calculation and reporting functionality, and exporting functionality (so you can send files to your accountant or tax preparer).
(On a side note: Sometimes business owners point out to me that a free Excel spreadsheet seems preferable to the monthly subscription cost of online bookkeeping. My advice is to consider the hours of time you’ll save by using these automated systems, especially in conjunction with the ideas I’m about to list below, and you’ll quickly see how these solutions will pay for themselves each and every month).
So, before you go any further, investigate the solutions and choose the one that makes the most sense for you. Take the time to set it up. It won’t take long and consider this time an investment into much easier bookkeeping in the future.
Take advantage of other software
Once you’ve chosen a core bookkeeping solution and started to use it, you’ll eventually want to move some of your other processes into compatible solutions. For example, Freshbooks is an online invoicing software that syncs with many bookkeeping solutions. When you enter an invoice in Freshbooks, they are automatically entered into your bookkeeping software. Or if you have a compatible automated shopping cart solution, purchases made through the shopping cart will be automatically applied to your books.
Another tool you may find helpful is Shoeboxed.com. Shoeboxed.com takes all of your receipts and scans them. Then you can get scanned images of your receipts to attach to bookkeeping entries and Shoeoboxed will even enter the data into a file so you can upload that to your bookkeeping system without manually entering everything.
Part 2: Mastering your bookkeeping in 10 minutes a day
So, you’ve got your fancy new bookkeeping system in place and you’re ready to start using it (while only spending 10 minutes a day… which you’ve already scheduled, right?).
One of the fastest ways to get a lot of bookkeeping done in just 10 minutes is to use a CSV file (which stands for “comma separate value” file and can be opened in Excel) and enter several entries quickly then upload it to your bookkeeping file.
Here’s how to do that:
Open an Excel spreadsheet or Google Docs Spreadsheet and set up each column with the information you’ll need in your bookkeeping system (like Date, Contact Name, Amount, Category, and whatever else you need to include). Then, sit down with your big stack of bills and receipts and just type in the data really quickly into the appropriate column. (Or, better yet, spend only 1 minute a day instead of 10 minutes by passing this data entry off to an assistant). Save the file as a .csv and upload it to your bookkeeping software. The system will review the entries, have you quickly double-check to make sure that everything looks right, and then it will enter the data for you.
Where possible, automate the entries. For example, if you have a bill that comes out on the same day every month, and it’s the same amount each month, just create a recurring bill into your system so you only have to enter it once, at the very beginning, instead of each time you get the bill. Some common examples of these kinds of bills include:
- Rent or mortgage
- Flat fee telephone or internet plans
This also works for incoming entries, too: If someone pays you the same amount of money every month (as in a rental situation or a membership site), you can set up a recurring entry for them.
Automate as much as you can and schedule one of your 10 minute bookkeeping segments in each quarter to review your automated billing and make corrections if necessary.
Do the rest in ten minutes a day
By now you’ve set up your bookkeeping, caught up on your bookkeeping, and have automated as much as possible. Now it’s time to move forward with 10 minutes a day.
I’ll give you two options and each one should just take 10 minutes each day (and might end up taking less, depending on your business).
Option 1: Batch your weekly entries. Sort all of your week’s data into individual piles and enter one pile per day using a CSV file (as I’ve described above). For example, input all of last week’s money-coming-in entries on Monday; input all of last week’s money-going-out entries on Tuesday; input all new contacts on Wednesday; then spend Thursday reviewing anything you might have missed. (Yes, you can take Friday off! Or, use Friday to do other bookkeeping-related work like reviewing your reports). With this option, I like being able to quickly batch things; it feels faster and you can handle a lot more data. But you do end up with a week’s worth of entries sitting in a pile, which can sometimes feel daunting.
Option 2: Input the previous day’s bookkeeping. If you have a lot of entries, you might want to use a CSV file but if you only have a few entries it might be faster to just enter them into the bookkeeping system’s interface manually. With this option, you feel totally up-to-date and there aren’t papers sitting around for very long. However, if you miss a day or two, it’s easy to get behind quickly.
So, to summarize, here are my 10 minutes-a-day bookkeeping best practices:
- Get up to date as quickly as possible with a good online bookkeeping solution
- Automate as much as possible
- Sync business processes
- Stay on top of your bookkeeping and keep strictly to 10 minutes a day
Bookkeeping doesn’t have to feel as painful as many people think it is. It’s just a matter of minimizing how much work you have to do and staying on top of the rest.
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