First Step in Making Money: Send the Paperwork to Your Worker Bees
November 13, 2008 by Elizabeth Potts Weinstein
What’s the #1 concern of small business owners?
How to manage up’s and down’s in business income each month. 
What’s the #1 concern of individuals?
How to save more money & have more money available to spend on improving their lifestyle.
Either way, it’s all about managing cash flow.
Whether you put it under the category of budgeting, cash flow management, pro forma’s, financial planning, or balancing your checkbook, it all comes down to creating a system to achieve your goals by managing and strategizing the cash coming in and going out each month. On The Wealth Spa I’ve talked about the 4 Step System to Manage Cash Flow. You can use this system for your household finances, your home business, or a multi-million dollar corporation — the same universal principals apply.
The first step in managing your cash flow is to get the details out of your way. One of the details is all the paperwork and records we are required to maintain for tax purposes. I’m talking about all the documentation to support tax income and tax deductions. On the personal side, it’s salary information, investment records (both purchases and sales), and deduction records (i.e., property tax, mortgage interest, charitable deductions). On the business side, it’s income records (invoices and deposit slips) and expense receipts and cancelled checks.
Whether or not you use this original data to prepare your tax returns (we’ll discuss that next week), you do need to keep all of it in case you get audited. But you must not get bogged down in these details, because it dose not help you manage you cash flow.
How to Keep Records: Personal records may be kept in files by year, along with the tax return for that year. Business records may be kept in 4 monthly expanding files — one for income, one for deposit slips, one for cancelled checks, and one for receipts. You may combine travel, automobile expenses, entertainment, and dining records with the receipts (just write notes directly on the back of the receipt), or keep logs in a separate file or journal - whatever is easier for you.
You can keep these documents as electronic files. But, I find that scanning the documents takes more time then throwing them into files. And who cares about having a pdf of a Starbucks’ receipt from 1998 on your computer?
How to Maintain Records: If at all possible, delegate to your Worker Bees! Have your Virtual Assistant, Personal Assistant, Professional Organizer, spouse, responsible teenager, stay-at-home-mom neighbor, or babysitter take over this job. (And yes, not only rich people have VA’s and PA’s - you can get someone for just 2 hours a week.) All they need to do is sort the paper by year or month, label the files, and stick the documents into the files. There is no reason for you to do it, except to manage that it gets done regularly (at least monthly).
The Wealth Spa Minute
Do you have a pile of receipts? Cancelled checks? Notes and logs? Stop dealing with this paper and get it off your desk into a simple expandable file. Even better - delegate this task to your Virtual Assistant or Personal Assistant.
Tags: bookkeeping, Cash Flow, checkbook, delegate, Finance, making money, personal assistant, records, virtual assistant, Wealth
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