215: Accurately Categorize Your Transactions Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant, Business Owner
215: Accurately Categorize Your Transactions Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant, Business Owner, Or Self-Employed
When you are utilizing a computerized software system to do your bookkeeping, it will save you time if you are taking advantage of all the bells and whistles it has to offer, but how do you know that everything is getting classified in the proper accounts? One of the tradeoffs you have when you are using functions such as bank feeds and automatic data entry is that you need to make sure you are reviewing all of your transactions for accuracy. In today’s podcast episode, I cover one of the most important reports you can review to ensure all the transactions you have going into your financial statements are categorized in the right accounts. This is a simple report to generate, and it won’t take you too much time to review, especially if you are able to work on your bookkeeping on a monthly basis so that you have accurate financial statements to review. You know I always recommend you keep up with your bookkeeping and reconcile your accounts on at least a monthly basis. When you do this, you are able to make smart business decisions in real-time for your business rather than having this information months after the tax year has ended, and you no longer have the ability to be proactive about your business decisions. Whether you are a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, having the knowledge of this easy-to-generate report and understanding how simple it is to spot errors will give you even more confidence that you are doing your bookkeeping accurately. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
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Show Notes:
When you are utilizing a computerized software system to do your bookkeeping, it will save you time if you are taking advantage of all the bells and whistles it has to offer, but how do you know that everything is getting classified in the proper accounts? One of the tradeoffs you have when you are using functions such as bank feeds and automatic data entry is that you need to make sure you are reviewing all of your transactions for accuracy. In today’s podcast episode, I cover one of the most important reports you can review to ensure all the transactions you have going into your financial statements are categorized in the right accounts. This is a simple report to generate, and it won’t take you too much time to review, especially if you are able to work on your bookkeeping on a monthly basis so that you have accurate financial statements to review. You know I always recommend you keep up with your bookkeeping and reconcile your accounts on at least a monthly basis. When you do this, you are able to make smart business decisions in real-time for your business rather than having this information months after the tax year has ended, and you no longer have the ability to be proactive about your business decisions. Whether you are a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, having the knowledge of this easy-to-generate report and understanding how simple it is to spot errors will give you even more confidence that you are doing your bookkeeping accurately. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
Welcome Back…When I am working with clients who are doing their own bookkeeping, I often hear that they feel like they are doing everything correctly…they enter all their transactions, they reconcile their accounts, but they still want the satisfaction of knowing that everything is accounted for correctly. This is when I introduce them to the General Ledger Detail Report. This report gives you all the details for every transaction that is recorded in your bookkeeping system and which account it is listed under.
You are probably aware of your financial statements, and I am hoping that you are reviewing your Balance Sheet and your Income Statement or Profit And Loss Report on a consistent basis, but this General Ledger Detail Report takes each and every account you have listed on these two reports and lists out each transaction that is recorded in each of the accounts within the dates you are reviewing the report. The report will start with your Assets, Liabilities, and Owner’s Equity accounts and then continue to report the details of your Revenue and Expense accounts. This report will also help you get even more familiar with your chart of accounts. Your chart of accounts is really the backbone of your accounting and bookkeeping system. You should understand what each of the accounts are for in your chart of accounts, and if you have accounts you don’t need, I recommend you delete or inactivate them. If you have accounts that you are using but are unsure what the account is for, I recommend you ask your tax preparer, CPA, or bookkeeper, or you can even contact me, and I can help you as well.
Whenever you book a transaction in your bookkeeping software, there is always a debit and a credit entry that keeps your books in balance. Most of these entries take place behind the scenes and happen automatically when you record a transaction, such as creating an invoice or entering a check or bill payment. When you take a look at your general ledger detail report, you will select the dates in which you want all the information to be reflected in that report. For example, you could select the dates for the General Ledger Detail Report that reflect the last month or period that you are reconciling your accounts for. Your General Ledger Detail Report will list the date, type of transaction, the name, amount, and even the memo if you have one entered for your transactions. You will be able to see if there is a beginning balance or a zero beginning balance, depending on your account’s history. You will be able to see all the transactions for the period you are generating the report for and then an ending balance for each account. This allows you not only to see what all the transactions are for that period, but you can also quickly view what the balance is as well.
When you are reviewing your General Ledger Detail Report, take a look at all the transactions for each account. You want to look for accuracy and be able to spot any unusual transactions, errors, or even fraudulent transactions. You should be familiar with which transactions should be in each category. For example, if you see your favorite restaurant’s latest expense under your rent expense, you know this is incorrect, and you can make the necessary changes to put it into the correct account. In most bookkeeping software solutions, you can easily double-click on the entry if you are viewing it on your computer, and it will take you directly to the original transaction so that you can correct your transaction efficiently. You might also be looking into a specific account thinking that you have an error, but you may find that the information is correct, and it is good to know why there is such a significant change. Take, for example, you are looking over your telephone expenses, and you notice the costs have increased significantly over the prior month. Just by looking into the details, you may find that there was a new phone purchase which is increasing the total telephone expense amount considerably. In this case, everything is recorded accurately, and there are no corrections that need to be made, but you are now aware of the increased amount. By taking this bird’s eye view, it is relatively simple to spot errors and become familiar with your finances.
This report also comes in handy when you are looking over your budgeted numbers and comparing them to your actual amounts. If you are off by a significant amount, you can quickly view the transactions that are included in that specific account and decide your next steps to maintain or adjust your budget accordingly. You can spot large transactions that may be throwing your budget off and utilize this information for the next year when working on your budget. If you are looking for a quick way to view all the transactions in your checking account, you can use this report as well. You will simply generate the report for the dates you want to review, and then you will see your checking account in the asset section of the General Ledger Detail Report. You could also customize your General Ledger Detail Report so that it will only show the specific account or accounts you are inquiring about.
When you are using a computerized bookkeeping solution, one of the main benefits is to be able to record transactions one time and have the ability to view those transactions in multiple different ways. The General Ledger Detail Report is another example of how you can easily capitalize on this information so that you can stay on top of your financial statements. If you are utilizing a manual bookkeeping system, you can still get this same detail reporting by using your spreadsheet. Overall, a General Ledger Detail Report accounts for all your accounts and transactions and ensures everything stays in balance with your debits and credits.
Whenever I am working with my clients, whether it is for bookkeeping, business strategy, or coaching, we are always looking for ways to simplify processes and help them understand and manage their business finances so that they are efficient and confident in everything they do in their business and their personal lives. Having my clients utilize their General Ledger Detail Report is just one example of this.
Imagine having a system in place where you spend less time buried in paperwork and more time doing what you love. That’s where I help my clients. They are able to have proper processes in place, understand why they are following through with these processes, and they have more peace of mind when it comes to their business. Striking a balance between the demands of running a business and maintaining a fulfilling personal life is an art; it’s about creating an environment where you can thrive and support your lifestyle. By being proactive and setting up efficient processes, you can ensure a smoother, more enjoyable year-end, and you’ll be prepared to file any necessary filings with the IRS. By working with me, you’ll change more than just your bookkeeping processes. Like many of the clients I’ve worked with, you’ll go from not knowing how to get through all the stressful situations or being unprepared to being totally in control of exactly what you are choosing to get done at the time you want to have it accomplished by, all while knowing you are doing enough and you’re able to enjoy your business and your personal life. I help clients just like you with strategy, mentorship, and coaching. When you work with me, you’ll show up much more differently than you do today, and, after all, this is what you ultimately want in your life, right? You can be stress-free in both your professional and personal life. Come join me. When I work with clients throughout the year, they are able to reduce their stress and overwhelm, understand how to master their small business finances, develop solutions to grow their bottom line, and create a work-life balance they truly enjoy. I encourage you to take the next step by signing up for a free consultation where I’m going to teach you the first step in my process so that you can eliminate stress, overwhelm, or overworking in your professional or personal life while you continue to get done what matters so that you can live your life with joy, purpose and a more fulfilled life. Feel free to reach out to me with any questions you have; I’d love to help you on this journey. You can schedule your free consultation or sign up for a coaching session today at www.FinancialAdventure.com. As a Certified Public Accountant and Certified Life Coach, I can help you set goals and develop a plan that will allow you to lead a happier and more sustainable life in your business, career, or your personal life. I’m here to guide you through the financial aspects of your business as well as help you focus on the strategies you need to follow to reach the success you want to achieve in your professional or personal life and stay committed so that you can continue to keep pushing forward and relieve the stress, anxiety, or overwhelm you are currently feeling. Having an accountant and certified life coach like me can provide you with valuable insights and ideas to help you simplify your life, which enables you to go back to enjoying your professional and personal life. I work with business owners, accountants, and other financial professionals to create the actionable steps they need to take to ultimately achieve their goals while getting relief from the stress and overwhelm they feel from the pressure of owning a business, deadlines, and the workload they face every day. If you are struggling with this as well and would like some help developing a solution, help strengthen and maintain your emotional health, increase your well-being, create a more positive, happy, and joyful life, set and achieve your goals, and manage your relationships, I’d love for you to join me in my Balance Life Coaching program so that you can live a more purposeful life. Each week, we meet privately one-on-one, and you get to bring whatever is on your mind on any given week. I also have a daily coaching program where you can talk to me whenever it works best for you, 24/7, any day of the week. In either program, you get to work on your highest priority, whatever you want more of in your life, or if there is something that is weighing on you heavily that you need coaching on, and we’ll work through it together. Having a certified life coach like me helping you through all of this allows you to feel so seen and cared for, and the results are amazing. Everyone benefits when they work with a certified life coach. After every session, you feel energized, and you know exactly what to do for the day or week to come, and relief knowing we will meet again to go over anything that comes up after your session. You’ll gain self-awareness while you take each step toward your goals. The investment in either of these programs is an easy yes for you. I’ve set these programs up in the most supportive way. If you are ready to join the Balance Life Coaching program, you can go to www.FinancialAdventure.com and click on the work with me button. You’ll see the link to join as well as additional information about the programs. Sign up now. There are limited spots available for these programs due to the one-on-one aspect, and they do sell out. If the payment link is gone, you can get on my waitlist to join the programs when additional spots are available. I help people get results and live a more joyful life. I coach everybody on everything. I know there is something you want in your life, and I can help you get it. I know this is something you’ve been waiting for. I’ve been asked by many of my listeners to create these exact programs. The faster you get access to the program, the quicker you’ll see the possibilities available to you. I also have a risk-free guarantee. I believe so strongly that everyone benefits from coaching that when you sign up for the Balance Life Coaching program today, if for any reason you are not satisfied with your first session, you can send us an email, and we’ll refund you immediately. Are you ready to enjoy your life now? Why would you want to wait? Make this investment for yourself. Take the journey with me…make it happen for yourself. Ask yourself why you need this program in your life right now. Are you ready to make bigger, bolder, stronger life goals? I’m looking forward to meeting with you soon and digging deeper to see where you currently are in your business or career and start creating actionable steps so that you can reach your vision and goals for the future, not only in your business or career but also in your personal life. I’m ready to work with you, see all of your successes, and watch you thrive in your business or career while creating your best work-life balance. I’ll post links to this and other valuable resources for business owners and accountants where you are listening to this podcast.
And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.
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