You have probably heard this before “Cash flow is King”. That is precisely why you want to operate in real time. Otherwise how do you know if you can afford to make that big purchase? Or how do you know if you have enough money to cover payroll this week? And here’s how you do it…
1. Get A System That Is Streamlined to Save Data Entry Time
I can’t stress this enough. If the system you are using is not streamlined you will be wasting lots of time entering data and ultimately you won’t do it. You need an effective bookkeeping program such as Big E-Z Bookkeeping that requires minimal input on your part.
2. Choose Your Categories Carefully
If you’ve been in business a while you can look to your last tax return to see which categories to track. If not, you can use the standard business categories found in the “Schedule C” or go to our Category Corner for suggested categories for your organization type.
3. Enter data when it happens
This means when you write that check, record it. When you make that deposit, record it. When you transfer that money from PayPal, record it. Now you are operating in real time. Congratulations!
Now you are in charge of your finances. You know exactly where you stand and can make better business decisions.