It's essential that you have a separate checking account for your business AND that you have a method to keep track of both your income and expenses on a monthly basis. I use Quick Books. And believe me, it is quick! I paid a friend to teach me how to use it and after only an hour and a half, I was able to enter my income and expenses, run my own financial statements, and use the convenient invoicing system. I haven't had any additional traning since then. Though I know the software is more powerful than what I'm using, it meets my needs.
At the end of each month, I run an income and expense statement so that I can look at one simple piece of data: did I spend more than I earned this month? Often, I have. In that case, I look at the year-to-date numbers. Have I earned more than I spent for the year? If so, I'm in good shape. If not, I know I have to watch my expenses more carefully.
I'm surprised at the number of at-home entrepreneurs who don't take the time to look at their numbers--or to interpret what they have to say. As I've said before, it isn't what you make that matters. It's what you keep. Who cares if you're making hundreds of dollars per month if you're spending thousands?
What do your numbers say about your performance so far this year? You do have your numbers, don't you? Set aside 10 minutes this week and let them speak to you. You may be surprised at what you see. And if you are, don't ignore the warning signals. Do something about it NOW, before it's too late. If you manage your business right, you'll have money left over to put in a SEP-IRA, which I'll discuss in the next post.
Financially Yours,
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