cancel
Showing results for 
Search instead for 
Did you mean: 
About the Author
After freelancing for nearly a decade, Ean Murphy started Moxie in 2003 with just one other bookkeeper (who is still with the company). Ean knew she wanted Moxie’s focus to be on small businesses run by creatives and nonprofit organizations - companies run by people deeply engaged with their work, but frequently not comfortable with numbers, or aware of the systems required to be successful. Moxie’s core offering is the organization of financial information, informed by Ean’s own first-hand knowledge of being a small business owner. The difficult, and at times complicated, tasks of budgeting, hiring, managing staff, and picking software are all understood by Ean and the Moxie team. Ean is Quickbooks certified since 2004, Xero certified since 2012 and a certified business coach as of 2010. Originally from the San Francisco Bay Area, she came to NYC to get her BA from The New School and has lived in Williamsburg, Brooklyn since 1990.

Take Charge of Your Business Finances

New Member - Level 1
0 0 151

Most business owners I talk with have started their own businesses to do what they love. And that thing they love? It’s generally not bookkeeping.

 

These people are talented artists, web designers, and all kinds of entrepreneurs who are incredibly good at what they do. They can walk into pitch meetings and present their ideas without breaking a sweat. They can deliver top-notch work and build world-class products like it’s no big deal.

 

But put them in front of an accounting ledger, and all that confidence flies right out the window.

 

Without a solid handle on your bookkeeping, you can miss important things. Missed bill payments result in late fees, forgotten invoices lose you money, and unnecessary expenses siphon money out of your account unnoticed.

 

If you don’t understand your cashflow, you’ll always feel one step behind – or get hit out of the blue with a big expense. Plus, it’s almost impossible to make informed decisions about whether you can afford to invest in your business without confidence in your business books.

 

We can turn all that around.

 

You don’t need a degree in accounting to tackle your bookkeeping confidently – you just need some simple mindset shifts.


Mindset 1: Each transaction needs a label that makes sense

 

When you track your income and expenses in a chart of accounts, it lets you get a handle on your cashflow and make smarter decisions about spending. But when you’re trying to shove your business’s transactions into pre-existing categories, it can feel like the chart of accounts gives you less visibility into your finances, not more.

 

One of the first things I do during a new engagement is go through the books with the client and ask if they like the categories in their chart of accounts. Most of the time, they tell me those are the default categories the software or their accountant uses.

 

All too often, those default categories can seem like another language. Maybe you don’t actually know the difference between categorizing something as “Office Supplies” versus “Business Expenses.” (I certainly don’t!) Maybe you think of your retail sales as “Trunk Show” or “Online Sales” rather than “Product Sales.”

 

But so many business owners get trapped thinking they need to use the “correct” default categories, even though they don’t feel right.

 

Here’s the thing. The vocabulary around how you categorize expenses and income is unique to your business. You don’t have to speak your accounting software’s language –you can make it speak yours.

 

Remember, your chart of accounts should work for you. And if it doesn’t, it’s totally fine to change it.

 

Honestly, it’s fine. You can’t break it! Don’t worry about making the wrong choices, because as long as you don’t delete something (and back up your data), it can be fixed.

 

Mindset 2: Each dollar needs a job and a home

 

How do you know if you can afford to upgrade your office space, buy a new computer, or hire a virtual assistant?

 

Many business owners I talk to simply don’t know. They hear the word “forecasting” and picture multi-tab spreadsheets or expensive software, and they run screaming the other direction. They figure they’ll trust their gut to make a decision but lack any feeling of confidence and certainty.

 

If that sounds like you, I’ve got good news.

 

I love the cash management system called Profit First, based on the book of the same name by Mike Michalowicz. In a nutshell, with Profit First you assign a job and a place to live to each dollar that comes in.

 

For example, how do you know if you can afford to rent a US$500/month office space? Start by opening a separate bank account and transferring $500 a month into it. If you can do that while still meeting your current obligations, then you confidently know you can afford to pay that much monthly.

 

(Plus, then you have a buffer account to pay rent out of in lean times.)

 

When each dollar has a job and a home, you can plan for future purchases and understand your budget without mastering spreadsheets or waiting for your accountant to run a report. Simply look at your bank account.

 

Mindset 3: Bookkeeping is way easier than you think

 

The biggest myth people believe about bookkeeping is that it is hard – but it’s really not.

 

It’s so simple, especially these days when accounting software is convenient, affordable, and automates everything. Your transactions all import automatically. You can upload receipts in a snap through an app on your phone.

 

Once you get the basics set up, your bookkeeping tasks shouldn’t take you more than an hour or so a week.

 

Stop thinking of your business bookkeeping like it's going to be an enormous to-do list item and give yourself permission to take baby steps. Poke around your accounting software for a few minutes. Take an app for a test drive. Categorize a few transactions here and there.

 

Just get started. It’s going to be way easier than you think it will.


Fight fear with knowledge

 

People are afraid of the unknown – and for many business owners, bookkeeping falls squarely into that category.

That’s why one of the biggest ways to start chipping away at the fear of your finances is to spend some time learning what you don’t know from someone you like and trust.

 

I have more good news here. There are a ton of new voices who can teach you the basics of finance.

 

Some standout books are:

 

(The first two are both more personal than business, though when you’re an entrepreneur those are pretty interdependent.)

Find experts who resonate with you and start approaching learning about your finances from a place of curiosity rather than guilt or shame.

 

And it’s so easy to find help. Whether that’s talking with a friend who also runs a business, hiring a virtual bookkeeper to check in once a month, consulting with your CPA, or emailing the support team for your accounting software. Reach out if you have questions, and these people will have answers.

 

You’ve got this.