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calculator with tax forms representing manage finances

When I first became a professional organizer and started Metropolitan Organizing®, one of my biggest challenges was learning to manage finances for my business.

I’m good at saving, sorting, and documenting my expenses and income, but putting it all together in pie charts and graphs, calculating percentages, and researching when and if to charge sales tax was stressful.

Financial Basics For New Professional Organizers

For new organizers, it’s intimidating to not know what you don’t know because you’re never sure where to begin or who to ask. Starting your own business should be fun. After all, you’re embarking on a journey to do something you love. Unfortunately, the “not so fun” part can be enough to make you want to avoid the journey altogether.

The administrative and accounting side of starting an organizing business can be boring and mundane. Still, it’s the pulse of your business, and it’s important to regularly measure and track how it’s doing financially.

My best advice is never to trust anyone exclusively — no matter how fast your business grows. Always stay involved and do so frequently. Accountants and bookkeepers can help you manage finances, but there are many things you can do on your own to save money and stay informed. Here are some of the basics (and I do mean basics!) for a professional organizer starting an organizing business.

Get Organized

Seems obvious, right? Pick one day of the week and set a reminder to dedicate time to accounting. If you do it in small increments and frequently, it will be much more palatable. Plus, you’ll get a weekly update on where your business stands financially.

If you prefer the “shoebox” method, designate a container where you will keep receipts. Some accounting software, like QuickBooks, allows you to scan documents right into the program as you record the expense (whoever thought of that must have been part organizer).

Separate Your Money

Start thinking of yourself as two completely different entities — a business and a person. If you start this way, you won’t have to do it later. The structure of your business is important — sole proprietor, LLC, corporation, etc. Do your homework to determine what suits your lifestyle and which structure best fits your long-term plans for the business.

The best way to separate your business finances from your personal finances is to open a separate bank account. Use one charge/credit card exclusively for business expenses — travel, conference registrations, books, subscriptions, and office supplies. If you accidentally charge a business expense on a personal credit card, reimburse yourself. 

Invest in Accounting Software

QuickBooks is an excellent, stable program for recording all financial transactions. You can purchase it at your local office supply store, or you can sign up for a monthly subscription to QuickBooks Online.

It’s very user-friendly. If you can keep a check register, you can handle QuickBooks. The best part for those new to accounting is it’s almost impossible to make a mistake. You can fix every error you make in QuickBooks. If you’re ever unsure of a transaction, assign it to “Ask the Accountant.” Intuit’s help forums are very helpful, and you can find just about any answer through a Google search.

Square accepts credit card payments right from your smartphone and immediately deposits the funds into your bank account. Sales receipts are emailed to your customer — talk about convenience.

Excel is a useful tool to manage finances, but it can be a challenge. Again, use the Internet and watch a few tutorials on YouTube.

Create a Financial Dream Team

There are three types of financial and accounting professionals you should consider hiring.

Certified Professional Accountant (CPA): This is the person who will do your taxes. Interview them. Find someone trustworthy, easy to talk to, and available.

Bookkeeper: This is the individual who does payroll and data entry in preparation for the CPA. If you have the time and become proficient enough in QuickBooks, you may be able to fill this position yourself.

Financial Analyst or Financial Planner: This is the strategist for your future plans. Call a financial planner once your business is up and running and you have excess funds you want to use as capital (money you plan to reinvest into your company).

Travel Advice

The IRS’s write-off rate is typically updated annually, so put this on your list of things to do at year-end. To find the new rate, visit the IRS website. Any time you use your personal vehicle, reimburse yourself. Keep a written or virtual log of your travel. Tax forms require you to answer the question, “Do you have written evidence?” You want to be able to say, “Yes.” Other travel expenses are reimbursable. Just make sure you document where you went and why.

Expert Advice to Manage Finances

Colleen Schiess, an accountant in Cary, NC, offers her best tips for new organizers.

GT: Are any Apps available to help keep track of expenses?

CS: Most people have Excel, so that would be a good start.

GT: What’s the most important piece of technology for accounting?

CS: A scanner. Invest in a printer with a built-in scanner to save money. There are also several apps for your phone that use the camera as a scanner.

GT: Do you have any advice for new professional organizers?

CS: Starve yourself in the beginning. Let cash build up in your business. So many people start and think they need to pay themselves as their company makes money — big mistake. Let your company’s cash reserves increase. It puts you in a position to succeed and do more as your company grows. It’s tempting for people to take more as time goes on — don’t.

Also, listen to the pace of your business. Don’t jump ahead. Businesses are like children — they have to learn to crawl before they can run. When companies grow at a healthy pace, their foundation is better, and they can sustain more. Sometimes people try to do too much, and the business suffers.

Many thanks to Colleen for sharing her advice. Learn more about Colleen Thornhll Schiess.

Read more articles related to budget and finance for your professional organizing business.

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