Let's talk about how to keep track of your money on a daily basis to make your life easier later on. It's really easy to put these tasks off, but trust me when I say that you will be SO happy at the end of this tax year if you keep them up... Here's what you should be doing every day...
1. Save Your Receipts! On the top of the receipt write the deduction category of the receipt that matches with your chart of accounts. (Not sure what you should have listed? Check out our budgeting video for help! Or you can look here for a list courtesy of Quickbooks,) If this was a dinner or drink to talk with someone that meets the business expense threshold, be sure to write who you met with on the receipt as well as what you talked about.
For instance, if I'm spending $10 on lunch while getting a case consultation, I'm going to write "Dr. Helpful" on the top and the client's initials "case consultation: E.S." so if I get audited, I know exactly why I was there. Technically, most receipts under $75 don't need to be kept, but it's a great habit to save them all, especially since it's so easy these days. Want more detailed help? Here's what the tax-man says.
There are so many easy ways to do this now-a-days! Here are a couple options.
2. Track Your Mileage! Check with your accountant to confirm the rules, but here are some general guidelines for tracking your mileage:
I highly recommend downloading an app to make this easier. There are TONS to try out and choose from. If you use Quickbooks, there is even a Quickbooks self-employed app to use to help you track these expenses.
I'm currently using MileIQ and I love it because it tracks EVERY drive. That means I don't have to remember to turn it on! Which... I always forgot to do even after buying a decent app... but, MileIQ saves the ride, and then you just swipe right if it's a business expense. MileIQ is free to try, but costs a subscription fee to use regularly. Want a discount? Here's the link to my code to get one. (I'm not an affiliate, just a fan.)
Got a favorite? I'd love to hear!
3. Track Your Client Payments Tools like Simple Practice automate this but there's nothing wrong with a paper ledger, or an excel sheet. As long as you are staying on top of it and know who owes you what, you're good. Not staying on top of it? Time to dig into your history with money and asking for what you deserve (or believing you deserve money!!) with your therapist.
Bonus points: Got two seconds? Open up your business journal or calendar and jot down when you are going to touch base each month with clients who have month still due.