Have you been falling behind on the money side of running your business? Do you wish you were more consistent with how you keep track of your finances? If so, then it’s time to seriously get into a weekly income and expense tracking routine.
I’m a routine person. The more consistency I have in my life, the better I am at sticking to things. I’ve been following the same income and expense tracking routine for years and guess what? My finances are ALWAYS up to date. I love my routine because it’s simple and takes me less than 30 minutes a week.
So, without further ado, here is my weekly income and expense tracking routine.
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Step 1: I Download my Transactions.
I’m a QuickBooks Online user so the very first thing I do is log into my account and click on the Update button. When I click on this button, it tells QuickBooks to download all of my recent transactions from the bank. I love this because I don’t have to type anything in or log into a bunch of accounts.
If you’re not using Quickbooks but still using a digital bookkeeping program like Wave or Xero, you probably have a similar button. If you’re using a spreadsheet then this step will be you logging into your bank accounts and pulling up your recent transactions for each account. By account, I mean any account associated with your business, like checking accounts, savings accounts, and credit cards.
The goal of this step is to pull up your financial data. You’ll do this either through aoftware automation or through logging into your banks.
Bonus: If you haven’t decided on a bookkeeping system yet, you can check out this guide that’ll help you decide on which system is right for you.
Step 2: Log and categorize transactions
This step is the most important part of my entire routine. Transactions are income, expenses, transfers, and owner draws. Basically, anything that happens in your business bank or credit card accounts needs to be logged. In QuickBooks, this is pretty easy because the system has already downloaded my transactions and some key details.
How I collect transactions in Quickbooks
When I press the update button, QuickBooks downloads the date of the transaction, the amount, and the description in the bank. The description is usually what shows up on your statement. All I have to do is enter in the Payee, that’s either who I paid or who paid me, and assign the category. Then I press Add and that adds the transactions to QuickBooks.
Categorize your transactions
Categorizing the transaction is the most important part because the category relates to your tax deductions. When you file your taxes, you’ll report how much money you spent in each tax deduction category. You actually need to assign a category to every transaction because it’s not enough just to log that you spent the money.
Beyond taxes, having clear income and expense categories helps YOU understand your financial patterns and where you’re making and spending your money.
If you’re unclear about your tax deductions, check out my video What is a Tax Write Off?, which goes over how tax deductions work in your business. Then download my Biz Finance Survival Kit, which has a tax deduction cheat sheet that you can use to figure out what your expense categories are.
If you’re using a spreadsheet, the process is the same except you’ll also need to manually enter your transactions and information like the date, who you paid, the amount, and of course, the category. Logging and categorizing transactions are REALLY the bulk of my income and expense tracking routine.
Step 3: Apply Payments to Invoices
There are a few other things I do every week, like applying payments to invoices. If you have an invoice-based business, applying your payments to your invoices and marking them as closed on a weekly basis is super important to ensure that you’re getting paid on time.
You definitely want to keep track of who is paying you and who hasn’t. But, if you’re not in a routine of applying payments to invoices, then it’s going to take you forever to figure out who’s paid and who hasn’t and you’ll lose track (and money!).
Invoicing through QuickBooks Online
Since I do all my invoicing through QuickBooks Online, marking an invoice as paid is pretty easy. I go to where it says “Receive Payment,” and enter in the name of the person who paid me, the payment date, and where I will deposit the payment. Finally, I select the invoice that was paid. When I do this, the invoice shows up as closed and will not appear on my open invoice list.
This process is pretty much the same for any digital invoicing program that you’re using. The point is to make sure that every week you’re notating which invoices have been paid.
If you don’t use a digital invoicing program then I recommend you create an invoicing tracking sheet that allows you to keep track of which invoices have been paid. You can just make a simple spreadsheet and every time you send an invoice you add it to the spreadsheet. Then, when it’s paid, you’ll update your spreadsheet with the payment date and method. Boom, you’re done!
Bonus: Receive payments for your invoices on the go- the perfect way to kill time and use the QuickBooks Online App. Check out How to Use the QuickBooks Online App to Stay on Top of Your Bookkeeping.
Step 4: Send Overdue Invoice Reminders
Every single week, I send overdue invoice reminders. This is crucial to maintaining healthy cash flow in my business. If I don’t send out regular reminders, then it could take weeks or even months to get paid.
People get busy and things slip through the cracks. That’s all well and good until it affects my finances. So, every single week I look through my list of overdue invoices and send out reminders.
I also like to send reminders out to people who have invoices due in the next 3 days. I like to give them a nudge because
1) I want to make sure I get paid.
2) I charge a late fee. Most people appreciate me reminding them so they don’t get charged the fee and it builds goodwill with my clients.
Sending invoice reminders in Quickbooks Online
In QuickBooks Online, it’s really easy to send invoice reminders. I just go to the Sales button, then Invoice and open up my list of invoices and look for anything that’s overdue, or due soon. Then, I click Send Reminder. What appears is a reminder template email that I’ve already set up. I can edit my template or simply just press send. That’s it- it takes me less than 10 seconds to send a reminder but it makes a HUGE difference in my cash flow.
If you’re using a spreadsheet to track your invoices, then you’ll just look for anything that’s overdue and send your customer an email. I highly recommend that you keep a canned response in your email program or in a doc that you can easily cut and paste.
One of the biggest reasons that we don’t get paid on time is because we’re not proactive about following up with customers. And, one of the reasons we’re not proactive is because we get too overwhelmed by all the things we need to do. So the easier you make it, the more likely you are to do this step.
Step 5: Review my financial reports
Most people like to review their numbers every month but I actually REALLY enjoy looking at my numbers every week. If it’s the beginning of the month, I’ll review my numbers for the previous month. If it’s mid-month, then I review my numbers for the month-to-date and see where I am. Sometimes I’ll compare it to where I was at last month around the same time, which helps me see if I’m on track this month to hit my goals. Or I’ll compare it to the previous year to see if my business is growing.
The way I review my numbers is by going to the Reports section of QuickBooks Online and choosing Profit & Loss. Then I adjust the report period based on what I want to know.
I do have a video that’s an in-depth look at Profit & Loss reports called How to Read a Profit and Loss Statement for Small Businesses. I highly recommend you watch that video, and check out this post on Profit & Loss reports, for more information about how to run, read, and use these reports in your business.
If you aren’t using a digital accounting program where you can easily run a report then you can download my free Profit & Loss Report template, which is a spreadsheet that makes it super easy to create your own monthly Profit & Loss report.
Bonus: Want even MORE on Profit & Loss reports and how to read them? Check out my post on how to increase your income by using Profit & Loss reports.
Step 6: Categorize my business mileage
The very last thing I do in my weekly bookkeeping routine is categorizing my business mileage using my favorite mileage tracking app, Mile IQ.
Let me tell you a little story about the many years that I didn’t categorize my mileage every week. Instead, I did it at the day before I filed my taxes. That sucked. So now I am really conscious of categorizing my mileage weekly so I don’t have to spend hours doing it.
How I track my mileage
Mile IQ is my absolute FAV because it automatically tracks when you drive and then you just swipe left or right to categorize drives as business or personal. It’s kinda like Tinder for your mileage. The app is free for up to 40 drives a month and I highly recommend using it if you do take the standard mileage deduction.
If you go over 40 drives, then you can still manually enter in your mileage on your Mile IQ dashboard and use the app for free. If I’m toward the end of the month and have gone over my free drives, then instead of categorizing my mileage in the app, I go into my dashboard and manually log my mileage.
That’s it! That’s my entire weekly income and expense tracking routine, which is pretty painless. If you want additional help with your bookkeeping, you can check out my workshop, Essential Bookkeeping Tasks for Your Business, and Catch Up Your Bookkeeping in 10 Days.
Now, these are the things I do weekly but there may some other tasks that you need to do for your business. My free Biz Finance Survival Kit has a complete list of small business bookkeeping tasks and a list of healthy financial habits for your business. You can download the free survival kit below.