3 Steps for Creating a DIY Bookkeeping Routine

Table of Contents

(Quick-jump to any step by clicking the bullet points below.)

If you’re having trouble setting up a bookkeeping routine, here are 3 steps for you to take so you can feel more confident in actually getting your bookkeeping done.

Create a SIMPLE system

Well, at least as simple as you can! As the saying goes: a system should be as robust as it needs to be, but no more so. If something is overwhelming, you’re much less likely to do it. Therefore, keep your bookkeeping system (like, the actual software you use) as simple as possible.

If your business finances are relatively simple (you have a single checking account, a credit card, and have all your revenue flow through Stripe or something similar), you don’t NEED full-blown accounting software. (Can you use it if you are generally good with software and are confident you can learn how to use it? Of course!! I’m just saying you don’t HAVE to if you don’t want to.)

When your finances are simple, you can easily use spreadsheets for your bookkeeping. Will other people argue against me on this? Yes, yes they will. And are there some legitimate drawbacks to using spreadsheets? Yes, yes there are. (Ex: if you delete/edit a cell you’re not supposed to, it can throw things off, it’s a bit more prone to duplicating or leaving out transactions by mistake, and you can’t automatically sync a spreadsheet to your bank.)

But all that said, I FIRMLY believe that spreadsheets are a GREAT option for a lot of business owners. Business owners who:

• Are just starting out and don’t have complicated finances

• Are trying to keep costs down and don’t want to spend $15/month or more on bookkeeping software

• Get overwhelmed by the idea of having to learn how to use bookkeeping software

So if simple spreadsheets are a good fit, don’t let anyone bully you into “upgrading”! (Hey, I’ve even made one for you, that’s how much I love simple spreadsheet bookkeeping!)

If you want simple-to-use software but ALSO want your transactions imported directly into said software (not possible with spreadsheets), take a look at Wave. You’ll have to be on their paid plan ($16/month as of July 2024) to sync your bank accounts, but it’s the simplest bookkeeping software to use for the non-accountant. Note: it doesn’t sync with PayPal or Stripe, so if you use those extensively, Wave might not be a good fit for you. (If you’re not sure what software is the best fit for you, I made a quiz to help! You can take it for free, and the best part is that you don’t need to input your email address in order to get your results!)

Specific software aside, though, here are some other ways you can help keep your bookkeeping simple:

Find a happy medium for the number of categories you have.

You want enough so everything makes sense, but not so many categories that you can’t remember where to put things! For example: if you’re a branding photographer, you might want a category for props you use for photoshoots. But you probably don’t need one category for kitchen props, another for office props, and a third for lifestyle props. On the other hand, you might not want to lump Stripe and PayPal transaction fees in with bank or credit card fees (ex: late payment penalty on your credit card, or an insufficient funds fee from your bank). This way you can keep an eye on those bank fees!!

Bottom line: make sure the categories you’re using actually make sense for your brain and the business you have. The generic list of categories that came with your software (or spreadsheet!) might not be the best fit for you.

Cut down on the number of bank accounts and credit cards you have.

As much as possible, keep the number of accounts you have to a minimum. Because as I’m sure you can imagine, bookkeeping for 3 accounts (1 checking, 1 credit card, 1 Stripe account) is a LOT easier than trying to categorize and reconcile transactions from multiple bank accounts, 4 or 5 credit cards, and 3 PayPal accounts! (Although I will say that sometimes ending up with more than one Stripe account is simply unavoidable!)

Note: this is one reason I’m not the hugest fan of the Profit First method - there are just SO many bank accounts!! What do I recommend instead? My personal favorite is using YNAB. You can do everything Profit First talks about with ONE bank account, and it’s SO MUCH EASIER to navigate using a credit card (which most of us do, if only for security reasons).

Keep your finances SEPARATED

I know, if you’re just starting out it seems silly (and possibly a bit overwhelming!) to separate your business and personal finances. But PLEASE know that IRS rules aside, it truly is the simplest way to do things in the long run.

Picture this: you haven’t separated your business and personal finances. You go to do your bookkeeping and are faced with a month’s worth of transactions. How do you know which Target runs were for office supplies for your business, and which were for, I dunno, socks! And that charge from Google - is that for an app you bought for your personal phone, or cloud storage for your business files? If you have things separated, you KNOW that all those charges and payments are for business purposes.

And I know it doesn’t need mentioning, but I’ll mention it anyway: the IRS requires you to separate business and personal money. If you don’t, they won’t look kindly on it. And it honestly makes sense. If everything is combined, how are you to prove that the snacks you bought at the grocery store were to have on hand during a client photo shoot and not for you while you’re catching up on Netflix?

Here are a few tips for separating things:

• If you’re a sole proprietor, you DON’T need a checking or credit card in your business's name, and it doesn’t even need to be an official “business” account. Simply open a checking account in your own name and designate it as your “business” account. Find an old credit card you opened for the $200 bonus that you don’t really use, and designate it as your “business” credit card. Easy peasy.

• If your business is an LLC, my favorite online banks for business checking accounts (at least here in the US) are Relay and Mercury. Both have no monthly fees or minimum balances. They also let you have multiple checking accounts per business (super helpful if you’re into Profit First). Chase Business Ink and Capital One Spark cards are awesome as well.

• If you’re first getting started, move some seed money into your new business checking account (remember: It can be a regular personal account if you’re still a sole proprietor!) and operate from there, using those funds to pay your business credit card bill. Once you’re ready to start paying yourself, move funds from the business account back to your personal account. Easy peasy!

Last up:

SCHEDULE your bookkeeping

Here’s the thing about bookkeeping: it’s important, but not usually urgent Meaning, there are no built-in deadlines throughout the year. (You know, until April hits, then it’s ALL HANDS ON DECK!) And especially for my neurodivergent friends, deadlines can be a MUST for getting things done.

But it’s ALSO true that trying to do an entire year’s worth of bookkeeping at once is NOT the best idea, even for me, a professional bookkeeper. It makes me wanna 1. Tear my hair out, then 2. Go take a nap.

How to solve this? I mean, if I could solve everyone’s time management problems I’d be running a MUCH different business than I am! 🤣 So, you know, there’s the tried and true: put it on your calendar. Get an accountability partner. Hire someone to nag you until you actually do it. (A friend of mine uses this service and swears by it!)

Whatever works for your brain is what you gotta do. Because while it’s not sexy and it’s certainly not earth-shattering, doing your bookkeeping on an ongoing basis is REALLY going to help. (Bonus: if you don’t go months and months between sessions, you won’t forget how to do it!)

Shameless plug: If you’re someone who thrives on co-working and body-doubling, check out my Love Your Numbers club. It’s only $9/month and (among other things) there’s a monthly co-working/body-doubling session specifically so you can get caught up on your bookkeeping. I’m always there and available to answer questions, give pep talks, and celebrate successes.

One more tip to actually scheduling your bookkeeping and keeping that date with yourself: know what “doing your bookkeeping” means before you sit down. I know for myself that if I’m not exactly sure what a task on my to-do list entails, I’m far less likely to do it (because I can’t picture myself doing it!) If that’s the case for you, here’s a free checklist for you! It lays out the steps to follow each month when you sit down to do your bookkeeping - just sign up below!

There it is my friend, the 3 steps to creating an effective bookkeeping routine:

-> Create a SIMPLE system

-> Keep your finances SEPARATED

-> SCHEDULE your bookkeeping sessions