Yesterday (this post was meant for 5/6/11 but AR was down) I wrote a blog post about tracking your mileage for tax recordkeeping. I mentioned using Excel as part of my process and some commented that it was a good idea. In a previous life I was an accountant, so I used Excel to track other people's many all the time. I am familiar with many advanced features of the program. So, when I decided I needed to keep track of my income and spending I knew using a tradition check register was out of the question...especially since I don't have a checkbook.
I had already started using Excel for my personal checking account, so it was just a matter of using that as a template. To track my businesses expenses, though, I had to take it a step further. In my spreadsheet there are five columns: date, payee, amount, category, memo. On the right side of the spreadsheet I created a summary to capture the totals of each category (i.e. advertising, subscriptions, training, etc). I start a new worksheet for each month. At year-end, the total of all 12 pages is captured on a single worksheet, making tax reporting easy.
Using this method gives me a snapshot from week-to-week and month-to-month on what I am earning and where my money is going. It also allows me to come actual income and expenses to my budget, or what I thought it would be for a particular month.
I have met a lot of people who roll their eyes at the thought of recordkeeping, but once you get started it's relatively simple. The key is to choose a method that works for you.
How do you currently keep track of your income and expenses?
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