Business Record Keeping For Entrepreneurs

No one finds accounts and business record keeping very fun. Unless you’re an accountant, record keeping will probably feel tedious, complicated and time consuming. A recent survey of small business owners found it was the second biggest time-wasting annoyance they have – after email.

But, we also know just how important it is to keep records too. If you lose key records, or don’t ever store them, it may well come back to haunt you. If you can’t prove certain expenses you might have to pay the IRS (or the tax service in your country) more in taxes, or could even end up with a fine if you fail an audit.

Record keeping is therefore sensible. So, what kinds of records do you need to keep?

Records That Entrepreneurs Should Keep

Any small business must keep the following two types of common records:

1. Income
You must keep a record of all income (profits and losses) the business generates. At the most basic, this should be kept in a spreadsheet, detailing how much the income was, what date it was logged and who the client was (there are also many accounting tools out there that make this process a lot easier).

You would also be wise to keep a record of all the invoices you’ve sent your customers, as proof of business. It’s wise to separate your invoices into separate folders for your different customers, and update these each time you complete a piece of work.

2. Receipts
You need to keep a copy of all your receipts, so you can accurately claim expenses on your annual tax return. This includes all bills related to your property, spending on equipment, goods or even lunch when you’re meeting clients to discuss business.

By keeping a record of all your income and receipts, you know that, once it comes to paying your tax, you will be able to easily access all the information you need.
At a minimum, you need to keep these records for at least three years, although in some cases it’s wise to keep them longer (read more on the IRS’s website here).

Why Should Entrepreneurs Keep Records?

Besides basic obligations for when you file your taxes, there are several other major benefits of keeping all your records. These include:

  • View business progress
    By keeping records of income, you can view the business’s financial health over time. Hopefully, you’ll be able to plot a continual upward chart of income and profits – but it will also tell you if there are any problems.
  • Identify sources of income
    The greater the variety of services you offer, and the more customers you have, it can be hard to work out where money actually comes from.
    For instance, if you have 20 products and 60 customers, it can be difficult to think strategically and decide which products or services bring you most value – and which customers are the most important. However, if you keep consistent records, you might decide that 10 of your products bring so little income that you may as well stop offering them, and focus instead on the higher paying work.
  • Remember deductible expenses
    Remember that table you bought for the office 11 months ago? Or the lunch you had with a new client last June? Many business owners short-change themselves by forgetting to state all the expenses they could claim on their tax return. Keeping all your records makes it ess likely you’ll forget, so you can claim the tax back on expenses.
  • Prove your finances to banks or investors
    If you go to a bank for a loan, they will expect to see proof of your cash flow and financial stability. Records help you prove that your business is financially sound.

How Can Your Business Track Records?

Many small businesses use some form of accounting software to log all their transactions, and this helps them work out their tax bills. Alternatively, that kind of technology might not be right for your business, and simply keeping all your financial data in a series of spreadsheets will be enough.

Whatever approach you choose, you also need to keep other documents – such as invoices – in a central place, and most firms now opt for a customer relationship manager (CRM) where they can accurately track all information they hold on customers, and all the services those customers paid for.

Once your record keeping practices are in place, you’ll be able to focus more of your attention on growing your business, and less time on paper work!

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Len is a tech and business writer who covers small business and startup advice and has appeared in many print and digital publications. He lives in London, UK, where he's also a sub editor on a national newspaper. He loves to travel and has lived in France, Spain, Senegal and Rwanda.

How to hire a remote team for your start-up

Utilizing the skills of a remote team can make a lot of sense for your startup. It’s usually a lot cheaper to hire freelancers who work from home, since you save on office space, bills and equipment. You also get access to the best talent anywhere in the world, because your team doesn’t have to live in the same city as you. These are just some of the reasons why start-ups hire a remote team far more than bigger companies.

If you’re looking to build a remote workforce – whether for full time employees, or just to access the skills of a couple of freelancers to fill out your team, the tips below should help.

Where to find them?

Placing ads for remote workers on the big job sites may not pay off – most people using those sites are looking for ‘regular’ jobs. Instead, head to sites like:
Flex Jobs
Remote OK
Skip the Drive
We Work Remotely
Go Remote
Posting your ad on these sites is usually free, allowing remote workers to find the job. You can also approach freelancers directly by searching for certain skills.

It’s also worth using LinkedIn’s basic search features to find people who may be interested in your remote working position.

What to look for

Now your ad’s live and you have applications coming in, what kind of traits do you want to look for in your new remote employees (besides evidence they have the specific skills you need)?

  • Good written communicator. Your remote employees need to be able to express themselves concisely yet clearly. You don’t want to wade through confusing emails, or deal with someone who offers one-word answers

Read our guide to negotiating over email for more tips

  • Motivated self-starter. You need to look for evidence that your new employee can manage themselves properly, without being constantly told what to do. If they’ve got remote working experience this might be enough. If not, ask for evidence of times they’ve worked well alone – perhaps during their studies
  • Trustworthy: you need to feel confident that your remote workers will stick to their contract and do the work you expect in the time allotted. When speaking to their previous employers, ask about times they’ve worked alone and their ability to do so

Set clear expectations

In a traditional office environment, it’s much easier to manage people face to face, using body language and verbal requests. Equally, misunderstandings can be cleared up a lot faster.

So, during the recruitment process for remote workers, you need to create job ads which are aligned with this. You need to make it super clear exactly what is expected of the remote worker – this means you avoid the risk of hiring someone who didn’t understand what you actually needed.

10 Survival Tips For Entrepreneurs (That Don’t Involve A To-Do List)

Whether you’re a budding solopreneur or the CEO of a Fortune 500 company, mindfulness is quite possibly one of the most important factors that can drive your company’s success. Awareness and control of your thoughts and emotion can help to improve your decision-making skills, decrease your anxiety over future goals, and alleviate the stress of day to day operations.

For entrepreneurs and new startups, every day is an adventure and every decision is a risk that we hope will bring us one step closer to changing the world in our own special way.

What can mindfulness do for us?

Over the past two years as a solopreneur, I’ve learned that running a business is about a lot more than just making to-do lists, checking off tasks, and getting paid. Here are 10 of the entrepreneur survival tips I’ve discovered along the way.

1. Be Present

When you aren’t getting paid a steady salary based solely on whether or not you’re sitting at your desk during allotted work hours, staying focused becomes a lot more important. Every interruption or wandering daydream can cost you valuable time. But focus is about more than just putting your headphones on, turning up some punk rock, and handling business. True focus is about making a commitment to your goals and working to ensure that every action you take moves you closer to your desired results. It’s about being present in the moment, no matter where you are.

True focus is something you should actively practice whether you’re at your desk typing away or you’re at home with your family. Being present in every moment is a commitment that you make to yourself to live a life of purpose.

Take time every morning to sit down, relax, and focus on your day. This can be a time of meditation, prayer, or just calm reflection.

2. Be Authentic

Nobody likes a copycat. Too many entrepreneurs try to emulate what their mentors or heroes have done to become successful, and it just doesn’t work. When it comes to your attitude, appearance, style, and behavior, what matters most is that you are authentically you.

Being yourself is the best way to attract your ideal clients and eliminate sections of the market that aren’t right for your services. Embrace who you are, play to your strengths, and you will attract a tribe that loves the real you.

3. Remember Your Why

Why did you choose to start your business? If the only answer that you can think of is because you wanted to make money, then you’re starting off on the wrong foot.

You were meant to do more than just pay bills and die. Success and fulfillment are about more than just making money. So why do you do what you do?

Do you want to change the lives of the clients you work with?

Is it because you want to give your family a better life?

Do you jump out of bed every morning because you just really love your job?

Your “Why” is the core purpose behind everything that you do, and it is the driving force that motivates your actions and your attitude. Take time on a regular basis to stop and remind yourself what that purpose is. Write it down if you need to, and keep it somewhere you can look at it often. Speak it out loud to yourself in the mirror.

This might seem cheesy to you now, but it can be a deciding factor in whether you succeed or fail. Every entrepreneur goes through a roller coaster of peaks and valleys, and navigating the low points will be a lot easier if you remember why you’re there.

4. Give Yourself Time To Think

Don’t let yourself get overloaded with menial tasks. Taking time for introspection is just as important as crossing the next task off of your to-do list. If you find that you simply don’t have enough time to think about the direction your business is going or come up with new ideas, it might be time for you to hire an assistant. Whether you hire someone in-house or get yourself a VA, they can help you offload lower level tasks and clear your plate so that you can have time for the things that require your personal attention.

5. Don’t Make Decisions When You’re Emotional

It’s extremely important that you make upper-level decisions with a clear head. If you’re upset, anxious, or even excited, you could make a decision based solely on that emotion that could change your entire life. If you’re not in the right emotional state to make important decisions logically, you owe it to yourself and to your business to table that decision for another day.

6. Keep Your Desk (And Your Head) Clutter-Free

Your primary workspace might be a private office, the spare corner in your laundry room, or the comfiest chair at your local Starbucks. No matter where you work, you need to keep your office area free of distractions.

Make sure that the space around you is populated only by things that you need for work. Cluttered papers, stacked books, and cute figurines are tempting companions, but they won’t do you any favors when it comes to productivity. The inside of your computer should mirror this mindset, and you should only have software and files that are necessary on any device that you use for work.

The fewer distractions you have around you, the easier it will be to think clearly and stay focused on what’s in front of you.

7. Don’t Get Buried In Email

Email is perhaps the greatest invention of our time. There are many entrepreneurs, including myself, who simply wouldn’t be able to do their jobs without it. However, email can also be a devilish thing that steals your attention and leads you down a rabbit hole full of bright, shiny objects.

You can avoid this temptation by keeping your inbox organized and only keeping priority emails in your main folder. These are the emails that you need to answer immediately or by the end of the day. Don’t sign up for an email list that you aren’t actively going to read, and if you find yourself getting pulled into an email series that isn’t providing you value that will advance your business, don’t be afraid to unsubscribe.

8. Don’t Be A Hermit

For many entrepreneurs, the natural state of affairs causes us to sit for hours glued to a computer screen and slowly pecking away at task after task. It’s important to remember that life is about experiences, people, and interactions. Life is about your “why”.

Take time every week to get out of your office and away from your computer. Take a trip to attend a summit, network with local business owners, or just have lunch with an old friend. Whether your outing is business-related or not, your business will be more successful when it’s run by someone who is happy and takes time to actively be a real person.

9. Don’t Be “That Guy”

Let’s face it: if you’ve made the decision to throw off the mantle of 9 to 5 expectations and become an entrepreneur, you’re probably someone who feels like you can do anything you put your mind to. This mindset is part of what makes entrepreneurs tick, and it’s also part of what makes us successful.

Unfortunately, this makes most of us terrible at asking for help. Whether you’re stuck on something and need advice from someone who has already been there or you’re just stressed out and need someone to talk to, it sometimes feels like a failure to admit that you’re not a superhero.

But if you’re not willing to ask for help, you can’t grow. So don’t be the guy who goes it alone and drives himself batty with a problem he just can’t solve. Don’t be the girl who works herself sick because there is too much on her plate. If you reach out and ask for help, you may be surprised how many people are happy to step up.

10. Get Plenty Of Rest

It’s true that there is a magical subsection of the population, known as the sleepless elite, who can easily function on 4 hours of sleep or less each day. Unfortunately, they only make up about 2 percent of the total population.

The sad truth is it’s much more likely that you, like almost everyone else, need to get plenty of sleep if you’re going to function at your best. It’s tragic, I know. If you’re like me, you’d much rather be able to spend those 8 hours nailing out another day’s work.

Please, don’t do it. I have tested this theory on your behalf. It’s a bad idea.

Sleep deprivation can cause serious impairments in cognitive ability, and studies have proven that lack of sleep can affect you in much the same way as being drunk. Your decision-making skills suffer, productivity drops, and the overall quality of your work takes a major nosedive.

Go to bed early and give yourself plenty of time to get at least 8 full hours of uninterrupted sleep. Wake up early and face the next day refreshed and ready to tackle anything that comes your way.