It’s been your dream since you were old enough to use the oven without Mom watching over your shoulder. You swoon at the aroma of fresh vanilla bean extract and you bask in the feel of flour slipping between your fingers. You’ve just embarked on your first entrepreneurial venture: a small-town cupcake bakery that serves 12 flavors, 7 days a week.
If I had to guess, I’d say that you prefer being behind a rolling pin rather than behind an Excel spreadsheet. Numbers are intimidating—especially when they have the potential to show declining profits. In short, you are more interested in deciding next week’s Spotlight Buttercream Flavor than you are in book-keeping.
This is not unusual; few people open a small business because they have a desire to crunch numbers and file receipts. With this in mind, I’d like to spend today discussing three habits that you can adopt to make bookkeeping a breeze—even if you haven’t taken a math class since freshman algebra.
1.) Don’t be afraid to outsource: Begin with the mind-set that you don’t have to carry the entire book-keeping burden yourself. No one expects a baker—an architect, a hair stylist—to also be an accountant. Don’t be afraid to seek assistance with some of the trickier aspects of financial management. Filing taxes quarterly? Consider hiring an accountant with the appropriate expertise.
2.) Track those receipts! It might be tedious to keep a receipt for every business expense, but a little effort now will save you time—and money—later. Whether you are taking a potential supplier out for lunch or booking a flight to a New York tradeshow, you will likely be able to categorize those expenses as tax deductions come April.
3.) Learn a little jargon: While I encourage you to seek the help of a financial professional for services with which you are not yourself familiar, I also suggest learning some industry-specific terminology. Here’s an easy one—and maybe the most important: “profit,” often referred to as your “bottom line,” describes the amount of money your business takes in after all expenses are paid. Some other vocabulary words to master include “profit per customer” and “accounts receivable.”
With a little practice, and the steady incorporation of these habits into your daily business routine, you will soon find that book-keeping doesn’t have to be intimidating. You might never derive the same fulfillment from filing receipts and quantifying expenses as you do from booting up your KitchenAid. However, I hope that this post has, at the very least, mitigated the anxiety about numbers that might have originated in 8th grade math class.