My guest is bookkeeper extraordinaire Katherine Pomerantz. She has amazing perspectives on money and how business owners can completely change their relationship with money. When you own your own business you are not only the CEO but you’re also the HR department, the accounting department, the mail room, the office manager. It’s time to outsource and ask for help when you need it. The books – meaning the record that tracks inflows and outflows of your business are the heart of the matter. If categorizing transactions and spreadsheets don’t excite you, it’s time to hire help! Katherine walks us through a slew of free and inexpensive tools that can save a small business’s life. We talk about how to price your art, how to maximize your time as a business writer, how to be your own bookkeeper and why creative people are better business owners.
Tools Katherine Recommends
Stage 1
Make a budget for your business and track your expenses. A notebook or rudimentary excel spreadsheet is perfectly acceptable. It’s important to track your expenses and measure them against your budget. That’s the only way to measure how you’re doing.
Stage 2
At the basic level, you need to be paid for your work. Invoicing is a pain but with software like Freshbooks, it’s easy. The software also tracks income and expenses and can be very helpful in building your business.
Stage 3
Use a free accounting software called Wave that has expense tracking, bookkeeping and invoicing all in one place.
Stage 4
Invest in yourself and get Quickbooks. If you’re serious about growing a business that will help you reach financial independence, learning quickbooks (any likely paying someone to teach you)
Other Tips From Katherine
- Get a free EIN number from the IRS so your business can be separated from your personal social security number. You’ll need it to open a business bank account.
- Your business will also have its own credit score! Katherine reminds us that credit cards are not the only option when you need to invest in supplies. Small business loans can have better terms and much lower interest rates. She highly recommends Nav.com.
- Quickbooks Online Self-Employed is a helpful resource for small businesses. It’s a lighter version of the full accounting software that costs less than $100 per year. It’s great for invoicing and cash flow and there’s not as much of a learning curve.
Moneysplained 