Thought I would share a little bit on how I track my business income and expenses. My business income is not very high yet, so I don’t need to worry about things like charging GST. How I keep track of my business finances is very simple. I have an Excel spreadsheet for income, and another spreadsheet for expenses. It’s divided up into each month of the year on one page, and another page for yearly amounts. Each time I pay for something for business use, like a networking event or art supplies, I enter the amount into my expenses spreadsheet. I also scan the receipt to keep a digital copy (because the darn things fade so fast), and put the physical receipt in my expenses envelope. At the end of the year I sort thru all my receipts and divide them into categories and add them all up for my tax person.
For my income, every time I get paid I enter the amount into my income spreadsheet, and keep a digital and physical copy of my invoice in my income envelope. My tax person doesn’t always need the physical invoice copies, but I like to keep them for my records. I also use PayPal to keep track of my invoices, and who has paid me and who is unpaid. I use PayPal to send invoices, and it also keeps a digital record of all your invoices and when they were paid. I find this very handy at tax time.
So there you have it, my extremely simple income/expense tracking system.