(Editor's note: Today we're excited to feature a post from guest contributor Stephanie Thacker of Steadfast Bookkeeping Co. Read more about Stephanie at the end of the post!)
Your wedding business is going great! You’re booking clients, collecting payments and making good profit margins, right? Or, wrong? Or, you don’t know? That’s okay - I’m here today to tell you why you should care about good bookkeeping and why it makes a difference in your business.
So why do I even use the term good bookkeeping? Well, because unfortunately bad bookkeeping exists. We’re not really here to talk about the bad bookkeeping but let’s just say it falls along the lines of inaccurate, not complete or pretty much non-existent. Good bookkeeping on the other hand provides accurate reports, it’s completed in a timely manner and it even plays a part in the success of your business.
I know that sitting down at a desk and doing bookkeeping is not what you went into business for. It’s not fun for you and frankly it might even be a little intimidating. Would you believe me if I told you it could relieve some stress from you and your business though? It really can. Let me show you how.
Income: Have you ever wanted to look back at your business and figure out where most of your revenue for the year came from? How much income came from those side jobs you took or the corporate events you planned? Tracking your income and categorizing it properly can easily answer these questions. If you have everything recorded, you can run reports that will detail all of this information for you.
Expenses: Where did all that money you made go? Seriously, it’s like it’s here today and gone tomorrow sometimes, right? This is the same scenario as the income. It’s really important to track every expense and categorize it properly so you can see where that money went. You’ll be able to see how much was spent on Labor, Cost of Goods Sold, Advertising, etc without having to pull out a calculator and a box of receipts every time.
Profits: Once you have all of your income and expenses recorded, you can see what your profits were - just subtract your expense total from your income total and this will give you your net income. This is a great way to determine how profitable a particular product or service is too, especially if you’re considering whether it’s worth it to keep offering that particular product/service.
Budgeting: A good budget starts with a look back at the past few month’s numbers. By having real, accurate numbers to look at you can easily make projections based on the facts + any goals you’d like to make on top of that.
Reports: What’s a report without any solid data? Useless, that’s what. If you’ve got all your income and expenses entered though, your reports will be full of useful data. Tax accountants especially like to see Profit & Loss and Balance Sheet reports when tax time rolls around. If you can easily run the reports they ask for, they’ll be super happy and tax time will be stress free for you!
So, even though it’s not fun to sit at your desk and actually do the bookkeeping, it’s totally worth it and you need good bookkeeping. When you are well informed about your business finances and you know where your money is coming from, where it’s going and what your future is looking like you are setting yourself up for success. You’ll make better decisions regarding expenses like labor, advertising and education when you know how much is in the budget. You’ll also be able to figure out how many clients and/or what gross revenue amount you need to bring in to meet your salary goal for yourself. All around, you’ll just feel better informed and confident in your finances, which makes a huge difference in the way you run your business.
If this all sounds pretty good and you’re wondering where to start, I’d recommend really thinking about whether you want to handle the bookkeeping on your own or whether you want to outsource it. It does take time and commitment when you are doing it on your own so take that into consideration. Once you are committed, I recommend using a cloud based software like Quickbooks Online so you can access your books anytime, from anywhere. Schedule time every week that is just for your bookkeeping and stay on top of it.
For a list of tasks that need to be done weekly, monthly, quarterly and even annually, you can download my free bookkeeping checklist here!
Stephanie Thacker is the founder and head bookkeeper at Steadfast Bookkeeping Co. She loves working with creative entrepreneurs and her passion is making bookkeeping a breeze for business owners. She doesn't deny the fact that she's a little nerdy when it comes to accounting, as she loves spreadsheets, loves crunching numbers and reconciling accounts always brings a smile to her face. Learn more about Stephanie and Steadfast Bookkeeping Co. on her website or on Instagram!