How to Simplify Your Bookkeeping for your Photography Business
Is your bookkeeping a hot mess?
Does your bookkeeping even exist?
Do you spend hours and hours going through paperwork and files and downloading transactions to put everything together for tax time just to file each year?
Today I will share with you the ONE simple thing you can do right now to start getting control of your bookkeeping. It's going to make your life so much easier.
So, let's dive in.
Open a Bank Account
What's the one simple thing you can do right now? Are you ready for this?
It's pretty simple: OPEN A SEPARATE BANK ACCOUNT (easy, right!?)
To open a business bank account, most banks will require you to have a DBA, registered LLC, with a Tax ID/EIN
Separate Bank Account for Business
If you're not ready to register or photography business as a DBA or LLC or obtain a Tax ID yet, all you need to do is set up a separate bank account. This can be a bank account with your name and social security number (a personal account) that you're going to use only for business transactions. Even if you have to deposit a little bit of your own cash into this account to get things rolling, this is going to make your life so much easier. Any cash you deposit into this new business bank account is called an owner contribution and any money you take out of this business bank account is called an owner draw.
How Does a Separate Bank Account Help?
When you open a separate account you'll have everything running through one account. So at the very least, at the bare minimum, at tax time you can go to this bank, login, download the activity into a CSV file, then you can sort that out in Excel or Google sheets with your income and expenses, and have what you need to file taxes pretty darn quickly. Even better download it each month so you can start to see how your business is doing on a monthly basis.
Integrate and Automate Your Bank Account
You can start using QuickBooks Online. You can easily connect this bank account with QuickBooks online and start pulling transactions right into the software and categorizing them to the appropriate income and expense accounts so that you actually have a profit and loss statement and a balance sheet. You could look at this profit and loss monthly to see how your business is growing, to see what your expenses are, to see how much money is coming in and where it's going out. Then at the end of the year, you can SIMPLY pull a profit and loss for the entire year to file taxes with a click of a button.
Pro Tip! I know sometimes getting started with the business might require a little bit of an investment and maybe a little bit of debt. If you're going to use a credit card to fund your business at all even if it's a personal card, you need to have one dedicated to just business transactions.
Whether that's opening a business credit card, opening a personal card that you're going to use just for business, or taking a card you already have, paying it off and starting fresh and using it only for business.You can then go to that credit card website, download the transactions into Excel or Google, sort them out for tax time. Or, you can simply connect these accounts to QuickBooks Online as I explained above. Because you have only business transactions flowing through this account everything will stay super organized.I know these are kind of simple things, but, they truly will make a world of difference because now you have everything flowing and you can actually start putting it together. You can stop spending hours going through all of your personal accounts, highlighting or taking out the things that are personal versus what's business.Now you have a place to get started to finally get control of your bookkeeping once and for all.
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