Bookkeeping Training Wheels for Your Creative Business

Remember when you learned to ride a bike? Those training wheels sure helped didn’t they? They made you feel more secure and kept you upright a few times. They gave you a simple, secure place to start riding your bike. Let’s put some training wheels on your bookkeeping system and get you started with a simple paper system!

Why Training Wheels?

Paper and Pencil are just as good as using a computerized system, sometimes way better. Here’s why:

  • Ease of Use – Yes, a simple paper system is easier to use than a software package
  • Easier to Learn – You already know how to use a pencil, right? A new accounting program takes hours to learn properly
  • Fewer Errors – Mistakes are much less common in paper systems
  • Easier to Correct – Mistakes are easier to fix: Erase and Rewrite
  • No “File Corrupt” messages – Data isn’t likely to go missing or be scrambled unless you spill your coffee on it. Even then, it’s pretty robust

Now, all this isn’t to say that paper is better, sometimes you really do need to move up to the big bike, but it’s a great way to start and may be all you ever need.

Bolt ‘Em On!

First, get your paper ready. If you’re the DIY type, here’s what you’ll need:

  • Loose leaf binder
  • Paper – any kind will work but the lined accounting pads with at least two columns will make you all official
  • A set of twelve divider tabs – one for each month
  • A simple calculator

A faster way to do this is get one of the Dome Monthly Bookkeeping Books
I’ve used and recommend them. You can find these in larger office supply stores, on their website, and at Amazon.*

I’m assuming you have a working pencil but if not, get one. Mechanical pencils with a decent eraser work well. The point is fine and you don’t have to keep sharpening it. But, old school Ticonderoga #2 works too.

Don’t use ink! It usually ends badly with line outs and write-ins and scribbles with arrows so that you can’t read anything on the page and it looks like a calligraphy convention gone bad.

Go for a Ride

At the top of the first page, write “Receipts” and the Month and Year then number down the page, one per line, for each day in the month. Label the tops of the columns for the date, description and the amount received.

At the top of the second page, write “Expenses” and the Month and Year. Don’t number the lines yet – you’ll do that as you write expenses in and will likely use lots of lines. Label the tops of the columns for the date, description of who was paid, the check number and the amount.

As you make sales, write the day’s total in on the Receipts page, one entry per day. Make a note of bank deposits in the description space with the amount on date you made it.

As you spend money, write each that down on the Expenses page on a separate line for each one. Fill in who it was to and what it was for, the check number if you used one, and the amount. On the next day, go to the next line and keep filling in new lines with the current date.

At the end of the month, you can use the lists to balance your checkbook and see how your cash flow is holding up.

Now You’re Cruisin’!

Congratulations! You’ve taken your first spin around the bookkeeping block and you’re a natural. Now that you’re collecting your business’s data, there’re ways to make it talk, but we’ll get into that later. For now, enjoy the ride!

Details, Details

I use a paper system for my own business – what do you think of that? For the volume of transactions and hassle of the packages I’ve tried, it’s the best choice for now. Tell us about your shiny new bike in the comments or a note.

Oh, and I never had training wheels – my cousin taught me to ride his (much too large) bike by running behind and holding it up. I eventually got the hang of it but the wheels would’ve really helped.

Next week, we’ll look at some of the software packages that are available, so hang in there!

*(Yes that’s an Amazon Affiliate link, but this is the product I would make if it didn’t already exist!)

Creative Commons License photo credit: josef.stuefer

Learning to Ride

2 thoughts on “Bookkeeping Training Wheels for Your Creative Business”

  1. Excellent post! Another reason why folks should start out doing the bookkeeping by hand is because it actually makes it easier to understand what the software is doing once you switch to a computerized system. When I first began learning accounting and bookkeeping, I found it immensely helpful to complete my projects the manual way. And once you get the hang of it, it’s actually kind of fun to look at the finished product and see how much you’ve accomplished (and how much money you made)!

    1. Hi Jennifer and thanks for stopping by and leaving such a thoughtful comment.

      You’re right, there’s a lot of learning in the manual/paper systems. It’s too bad so many folks don’t get that chance, but any system (as long as it’s sorta’ kinda’ correct :)) is better than none!

      I checked out your site – very nice! I’d like to know more…

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