Friday, October 30, 2009
One of the quickest ways to loose track of your expenses is to comingle your funds into all one pot. Pretty soon all of your good planning is messed up and you just can't figure out why. How much did I pay for food this month? Why is the business not making a profit? There are as many ways to keep things straight as there are people but some of the most common are the ledger book, excel, color code your check register, or separate envelopes for various cash expenses. Figure out what works for you and if it doesn't, try something else. Unless you can keep track you don't have a clear picture of what's going on. This gets even more tricky when two people are dipping into the pot and have different priorities and habits. Above all, keep business and personal expenses separate. This is imperative as it affects not only your record keeping but tax preparation and other legal matters. This may seem obvious but it is so easy in a small business to have money in one account and not the other and the mixing begins.