Are you one of those practitioners who hates looking at their bank statements?

Have no fear: you’re not alone. Money is a huge stressor for many Reiki practitioners and business owners in general, in part because they get confused over the bookkeeping aspect of business.

However, the only true way to plan your business and to earn your wealth is to know and understand your financial statements. Avoiding your bank statements will not make your financial problems disappear.

Tip #1: Choose a Bookkeeping System

You have a choice of handwritten ledgers, computer software, or hiring a bookkeeper. Unless you have a degree in Accounting, handwritten ledgers can become confusing and difficult to update if you fall behind, so I would recommend researching the multitude of bookkeeping software titles available (ex: quickbooks). If you want to hire someone, take your time to plan an interview process and check references, even if you hire a local firm who will assign someone to handle your records.

Tip #2: Do Your Bookkeeping on a Regular Basis

If you’re not ready to hire a bookkeeper, choose one day a week or twice a month to log your receipts. For those with online businesses, your expenses can be easily imported into your software; those with physical locations will have more in the way of physical receipts, which makes regular, accurate bookkeeping even more important.

Don’t wait until two months before the tax deadline to take out a shoebox of receipts and start entering them.

Also, reconcile your bookkeeping records with your bank statements on a monthly basis. Keeping a regular bookkeeping schedule also diminishes the chances of duplicate entries, or entries being logged into multiple or wrong accounts. All this wreaks havoc at tax time to so do it right from the start.

Tip #3: Know the Jargon

Whether you’re using software or a real life bookkeeper, knowing what the different accounting jargon means will further your understanding of how profitably your business is running.

Know the difference between Accounts Receivable and Accounts Payable. Keep accurate inventory counts of your physical products (very often this is the only way to know if you’re a victim of theft). Knowing the difference between Employee and Independent Contractor means a world of difference when it comes to calculating Payroll Taxes.

Tip #4: Make Detailed Notes

For every transaction that is entered into your books, add a detailed note. No more guessing games at tax time. Enter the reason for the expense, person or company, etc. Also avoid using acronyms in the notes. While it makes sense to you now, it may look like a foreign language in the future, or to a new bookkeeper or employee.

Tip #5: Keep Personal Expenses and Business Accounts Separate

This may seem like common sense but I can’t say it enough. If you use PayPal for your business payments, do not pay personal expenses with that same account. The same is true if you have a business checking account at your local bank. Don’t use that account to pay your gas bill.

Knowledge is Power

The more you know about your company’s financials, the more power you have to fix any problems and to steer the ship toward more earnings. You might be surprised at how the expenses add up, or how much time you are actually spending in your business when you keep track.

Your business was built to be profitable-you need to have an income to continue to help others. Embrace the bookkeeping practice so you can better understand your profit margin and run your company more smoothly.

Discover More Tips for Changing Your Money Mindset

If you feel like you should be making more progress and profits in your business but you’re not sure where to make changes, join us.

Your mindset means everything when it comes to working with the energy of money.