I really love running a home based business. I love the thrill, the joy, and entitlement. I love being my own boss. I love setting my own agenda and my own schedule.

And I love the smell of that new idea.

But I hate accounting. 

I know there are some people out there who LOVE accounting (and some even made careers out of it.)

And while I am sort of a geek and like numbers, and math to an extent, I just never got into accounting.

Which by all accounts doesn’t make sense, right? I mean, as a small home based business I should absolutely have my finger on the pulse of my business, where it is making money, losing money, my finances. After all, the cash flow is the lifeblood of my business.

One thing I am good at is trying to solve a problem. (Or at least identifying a problem.)

So here it is:

Home business accounting tips and tricks

1. Get decent accounting software

When I first started out, I kept track of finances using Microsoft excel or the free equivalent, OpenOffice Calc. 

It was a relatively simple setup for a simple home business setup.

I could create an infinite number of spreadsheets, print them off, lay them on my bedsheets…wait, scratch that last one.

Excel or OpenOffic Calc definitely has its uses. Basic accounting can be done.

The problem is, that type of solution does not scale well. It also lacks a lot of the features even a rudimentary budget or accounting software would have. Things like account linking, debiting from one account to credit another (the idea that money has to come from somewhere), tracking accounts payable, categorizing, creating end of year reports and tax reports like cash flow summary, profits/loss, etc.

The list goes on and on.

I’m stingy when it comes to purchases, and accounting software is no different. So when I look for software, I not only want it to be good, full of features, and free, but I also want it to be free.

I’m a bit of a nerd, so in the past I played around with something called GnuCash. It originally only ran on an Operating System other than Windows (Linux) but there has been a Windows version for several years now. It supports multiple accounts, report creation, and can categorize.

Bottom line – no matter what you choose, even if it is a paid one (such as Quickbooks, or another piece of software) – selecting one and sticking to it is definitely on the top of my home business accounting tips and tricks list.

It’s definitely a home business accounting tip that makes accounting suck much less.

2. Track weekly (if you don’t want to track daily)

Okay, depending on what your business is – tracking daily might be overkill.

I pick one day per week to spend a few hours going through my pile of receipts, emails, invoices, sales, and everything accounting and reconcile it all. I put it on my calendar. I set up phone reminders. I text myself.

ANYTHING to get myself in front of the computer to track expenses.

I’ve even used my phone to track using an app (expensify) or jsut used the camera to take photos of receipts.

3. Track and categorize ALL expenses

I started to maintain a log or spreadsheet to record expenses manually for a time. I listed each expense item, date, amount, and category.

EVERY TIME I incurred an expense (eventually) I would take a photo or write it in a log, THEN I would regularly update the accounting software.

I’m not going to lie, it is TOUGH if you don’t like accounting. But it’s worth it at the end of your fiscal year.

4. Separate personal and business finances

This one *should* be a no brainer, but I suffer from this one more times than I would care to admit. At the end of the year I’m doubling over all my expenses and can’t remember if an Amazon purchase was for business or personal use.

ONLY track business finances. And make sure you do it regularly. Otherwise you’ll have a headache at the end of the year trying to scramble through your personal bank and credit card statements and sift out business vs personal expenses.

Having separate accounts obviously helps 🙂