Small Business Bookkeeping: How to Make Your Wedding Business Finances a BreezeBy
If there was ever a responsibility you perpetually put off as a wedding business owner, it’s probably your bookkeeping. Whether you feel intimidated by it because you’ve never done any accounting numbers simply aren’t your thing, we understand that it can feel daunting when you absolutely have to get it done. We’re here to tell you that not only can you do it, but you can also excel at your bookkeeping!
Let’s dive into the topic of small business bookkeeping so you take charge of your business finances and feel confident as you do.
What is bookkeeping?
Bookkeeping is the process of tracking and organizing the financial transactions that happen in your business. That means recording what money is coming into your wedding business, what money is being spent, when it’s happening and why. And despite the fact that many wedding pros procrastinate on it (or maybe skip over it altogether), bookkeeping is an essential part of owning and operating a business because it creates a financial record for your business, allows you to understand how healthy (or not) your business finances are, and helps you prepare for tax season.
“Bookkeeping is data entry. And, while the tracking can be boring, there is a lot of power that comes from the data.” – Michelle Loretta of Be Sage Consulting
Pro-tip: One of the best ways to make bookkeeping easier on yourself is to make sure you have separate bank accounts for your business—even if you are a sole proprietor. The reason is that having your personal and business money “co-mingling” and keeping things in two different places makes the entire process much smoother.
What you need to do your own bookkeeping
As we said earlier, our goal today is to help you feel confident on your journey to do your own bookkeeping. But if after reading this article, you don’t feel comfortable with it (which is okay!), we strongly suggest you hire a bookkeeper to make sure it’s still getting done. That being said, should we continue? Here is what you need to do in order to start doing your own bookkeeping.
Step 1: Have somewhere to track your income and expenses
Tracking your business income and expenses is the core function of bookkeeping, so deciding where you are going to do it is the first step. You can start by creating a spreadsheet (on Excel, Numbers, or Google Sheets) or you can subscribe to software (like Quickbooks). Either way, our advice is to pick the way that feels easiest for you.
“You don’t need to overcomplicate bookkeeping when you begin. Keep it simple and you’ll learn along the way. If your business is new and you don’t have many transactions, you can set up a simple spreadsheet. Keep one tab that lists all the money in (your income) and a second tab that shows all the money out (your expenses). Every month compare the profit, or the income minus the expenses.” – Michelle Loretta of Be Sage Consulting
Step 2: Categories for organizing receipts
Whether you are keeping physical or digital copies of your business receipts, you need to create categories to organize them—this helps you categorize them when you are managing your transactions as well as in the case you need to refer to or find them in the future. You can consider using these categories (while being mindful to separate them by tax year and month):
- Charitable contributions
- Medical bills
- Traveling and transportation receipts
- Weight-loss program bills
- Smoking cessation program bills
- Prescription receipts
- Sales tax receipts
- Mileage logs
- Gas receipts
- Student loan bills
- Tuition bills
- Mortgage bills or rent receipts
- Childcare bills
- Office expenses
- Self-employment insurance receipts
- Utility bills
Pro-tip: Organizing your receipts can become a big to-do before tax season if you don’t stay on top of it. So, to keep you on top of it all, here is an article with a tax checklist!
Bookkeeping tips to help you stay on top of it
Technically, you can think of this section as Step 3, but we wanted to call it out in case you were looking for these tips! Because steps 1 and 2 are the easier ones to complete—it’s the continual need to be working in your books that a lot of wedding pros struggle with. So here are a few bookkeeping tips that outline what you should be doing on a monthly basis.
- Organize your receipts
- Categorize your transactions
- Download your bank statements
- Reconcile your accounts
Pro-tip: If you want to learn more about reconciling your accounts, Quickbooks has a great article to help.
“Bookkeeping is like yoga. You need to practice periodically to reap the rewards. Make a plan to read your P&L (profit and loss) report monthly. The more practice you get at reading the P&L, the more knowledgeable you’ll be about your business.” – Michelle Loretta of Be Sage Consulting
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