Getting My Money Organized, Again
February 11, 2007 by Anne Wayman
Filed under Jobs
I spent years ignoring my money – money would come in and go out and I’d have only the vaguest notion of where it came from and where it went. Small wonder my income was less than stellar.
About 3-1/2 years ago I started to turn things around. Part of this effort includes tracking my income and expenses on a daily and fairly detailed basis. Amazing what a little clarity will do to improve things… my income has more than tripled.
I use Quicken and last week my tax man suggested I start all over again for 2007 and make my categories way simpler. I got started on that project this morning.
This also involves running all my income and business expenses through a new checking account devoted to my business. I’m still not sure why my business and personal life should be separate in terms of how money is handled, but I’m into following instructions at the moment.
So, according to my tax guy, income is income, period. With one exception, and that’s royalties. Royalties are income too, but (maybe) the United States government treats them a bit differently.
When it comes to categorizing expenses, I’m using the cheat sheet the tax guy – his name is Kyle – gave me. Of course, it doesn’t match Quicken’s categories, at least not exactly. After thinking about it a bit, I decided to make mine match Kyle’s – after all, he’s the one who’s advising me.
Setting up the business account in Quicken was pretty easy… it’s done. Next I’ll tackle my personal checking account and its categories. I will simplify, a lot. Maybe that will make reconciliation easier down the road.
Paying attention to my writing business, I’ve found, is an absolute necessity if I’m to grow my income.
Write well and often,
Subscribe to Abundant Writing News
Quicken is great. I have used QuickBooks for the past 10 years.(In a non-writing business) But remember a software program is only as smart as the information you input. It can’t read in between the lines or know that the last deposit you made was the one that represented the completion of a project as you turned cartwheels.
Unfortunately Quicken and QuickBooks do not have a way for you to post !!! or smiley faces or WTG remarks in the margins. However, as you say, paying attention to your business is an absolute necessity.
lol… the real reason I went to Quicken is I know, beyond any shadow of a doubt, that I can’t add and subtract reliably… it can.
It’s very difficult to match your personal finances and the way your mind works to someone else’s financial categorizations. You’re much better off just keeping track of ~everything~ you spend for a few months, then grouping all of them by categories that make sense to you.
yep, that’s how it’s working for me… with some input from my tax guy to keep filing from getting too complicated.
I’ve been using Quickbooks(QB)for the last five years and I just love it. I do my own payroll, monthly and quarterly filings to the state and government. Also, QB is a great tool because you can print P & L statements and other various financial reports from the collected data you entered. My personal accountant is a wonderful person who taught me how to use QB and I have saved thousands of dollars by doing the bookkeeping myself. I’m not sure how Quickens works, but I’m sure it will serve your business well as QB does.
Personal and Business accounts need to be separated because of tax return filing and potential audit purposes. In the case of audits, if the accounts are combined, then auditing would be extremely time consuming and may lead the auditor to unnecessary suspicion. From a tax-return standpoint, a separate K-1 form is generated from your business tax return which is then applied to your personal tax return. Some people do not use the same accountant for both their personal & business tax returns, so that’s where a K-1 form would be justified.
As you become accustomed to Quickens and what it can do for you, you will appreciate it more.