Keeping records is VITAL to your business. It helps you measure your growth (or decline), see what is costing you the most, and give you an idea of how much money you have at a given time. Record keeping can be an entrepreneur’s least favorite part about owning their own business. A business owner must think about how they can best keep records to ensure the system will be useful. Below are three types of systems you can choose from or blend together.
Cloud-based Software: If you need to update numbers on the fly, or have multiple users access the same files from different locations, cloud-based software is a great solution. Examples of these programs are Google Sheets, QuickBooks Online, and Microsoft Excel Online. Excel is not an accounting software like the rest, it is used to create spreadsheets where data is laid out in columns and rows. You can use it for other records as well, such as sales, harvest, planting, and timesheets. All of these programs allow data to be accessed and updated using the device’s internet connection. If no connection is available, data is stored on the device until a good connection can be reestablished with QuickBooks Online.
Desktop Computer Software: If you operate out of one office, or have one bookkeeper in charge of recordkeeping, a software that is downloaded directly on one device may be a good option. Reports detailing the business’ performance can be created and shared with outside entities, but all income and expense data would be input using one device. Examples of these programs are QuickBooks and Quicken. Microsoft Excel, as previously discussed, is also a desktop software that can be used for recordkeeping.
Paper Ledger: If putting your information into a spreadsheet or accounting software is not going to work for you, use a paper ledger. It will still allow you to keep track of all income and expenses in one physical location but requires more work to do any analysis and makes it harder to share with people inside or outside an organization. A paper ledger can be purchased at a local office supply store or you could create your own using a simple notebook. You can also pick up a paper ledger from your local cooperative extension office and your farm credit office.
For all systems presented, it is important to back up your records by making physical and/or digital copies. Consistent recordkeeping will not only come in handy when tax season approaches, but you will also be able to track and analyze the financial health of the business throughout the year. If you would like help setting up a recordkeeping process, tailoring your existing process, or if you have questions, please reach out to KCARD at (859) 550-3972 or via email at kcard@kcard.info.