Welcome to our #AskACPA feature where we answer financial, accounting and business questions.
Question: I’m a side hustler and small business owner? How can I keep track of the expenses in my business?
One of the most frequently asked questions by small business owners is how to keep track of expenses, so as keep them from getting out of hand and better control them. If you’re a small business owner, whether you are side hustling or working on your business full-time, you know how important this can be. Not only is it crucial for you to account for what you’re actually spending, but having an accurate record of your expenses also comes in handy at tax time when you’re reporting these and potentially getting some related deductions.
Here are a few ways that can help:
Open a business bank account
Having a separate business account dedicated exclusively to business transactions makes it easier to track your business expenses and record them accurately. While you may use your personal account in some (rare) instances, you will eventually need a business bank account.
Set up your accounting system: Cash or accrual accounting?
Cash or accrual accounting?
Cash accounting consists of recording transactions when cash is exchanged. As such, you would only record your expenses when you pay for them in cash, and would record revenue only when received. Cash accounting is often used by very small businesses, as well as freelancers and sole proprietors, because of its simplicity and ease of use. However, this simplistic accounting method quickly becomes inadequate as the business grows, uses other forms of payment than cash, or needs more detailed bookkeeping.
Accrual accounting, on the other hand, requires that revenue or expenses be recorded when the transactions generating either actually happen, not when cash is paid or received. As such, you would record revenue when selling a product or service, not just when you’re paid for it. Similarly, you would record an expense when incurred, not just when you pay for it. This system of accounting is more accurate, and more suited to growing businesses.
It’s essential that you set up your accounting system properly based on your business goals and outlook.
Manage your records accurately
Last but not least, manage your receipts properly so you have accurate records for your expenses. While this can be done using a manual system such as folders and envelopes, it is more practical to do so using an application you can easily access through your phone or compute. Quickbooks offers a convenient way to scan in your receipts or download them as part of their bookkeeping suite.
In addition, make sure to promptly record your expenses in the system of your choice. While you may also use more of a manual system such as Excel spreadsheets for instance, using an accounting software that allows you to electronically record and keep track of your expenses can be more beneficial. Quickbooks not only allows you the convenience of scanning in your receipts, but also helps you record these expenses as part of your bookkeeping.
All in all, tracking your business expenses is central to your business. Without properly recording and managing your expenses, you put your business at risk and endanger your hard-earned revenues.
If you ask most working women and moms, time is not only a hard commodity to come by, especially in the advent of the COVID-19 pandemic. It’s also a fluid concept that doesn’t necessarily abide by all, or most of the official time management techniques…Not when interruptions are par for the course, and last-minute crisis management becomes a given on any day…
Managing time for working women and moms is far from being an organized, disciplined, scheduled day-to-day sequence of events and choices. Rather, it’s a spontaneous, change-laden, transition-filled and evolving process on the best of days. On the worst of days, it’s managed chaos under somewhat of a sense of serendipitous control.
The reason behind this is the long-lost realization that for working women and moms, time management is less of a choice than it is a constant, regular trade-off between what’s most important and what’s less important, what has to be addressed now versus what can wait another minute, what cannot be planned yet still happens and what happened without ever being planned…The COVID-19 pandemic was a harsh reminder of this fact, exposing the whole world to the fragile subjectivity and utter subordination of women’s time, energy and devotion to unending, unpaid and often un-rewarded, endless caregiving…
In her book “Year of Yes: How to Dance is Out, Stand in the Sun and Be Your Own Person”, Shonda Rhimes says it well: “That is the trade-off. That is the Faustian bargain one makes with the devil that comes with being a powerful working woman who is also a powerful mother. You never feel 100 percent okay, you never get your sea legs, you are always a little nauseous. Something is always lost. Something is always missing. And yet. I want my daughters to see me and know me as a woman who works. I want that example set for them”. Yet, it’s this constant, often heart-wrenching trade-off, that also teaches our daughters and sons about not giving up on who they are while still giving of themselves. It’s this trade-off that has allowed the world to benefit from the indispensable contributions of women to all fields of work and life. Most importantly, it’s on the harsh yet generous foundational shoulders of this trade-off that so many of us stand today, to accomplish the work of our lives and leave the legacy of our existences.
Don’t get me wrong, time management is crucial. However, the traditional idea of time management, the one constructed around the history, traditions and schedules of a patriarchal system, are no longer reflecting the realities of a working population made up by half of working women and mothers. We must re-think antiquated concepts of time and ways to manage it, as part of the now accelerated process of change and renewal our society is finding itself in the midst of. Part of this, maybe the most important part of this, is the realization that for working women and mothers, time is but a trade-off.
Do you agree that time management is a matter of a trade -off for working women and moms?
We’ve all heard about the conventional time management advice out there. From breaking down your tasks into manageable bits, to creating new habits in 21 days, most of us have, at some point or another, thought about and even implemented ways to be more strategic with our time. Yet, as working women and moms, time management tends to take a life of its own complexity and nature. From attending to caregiving tasks, to last-minute parenting events, not to mention facing social and professional stigma and lack of gender equity, managing one’s time in a career context is a beast of its own. That’s where the IDEAS framework, anchored in the “Pay Yourself First” principle, comes in…
For working women and moms, managing time strategically and efficiently does not stop at allocating tasks to blocks of time, or creating a well-organized schedule and calendar. Time does not exactly flow on a continuum when one carries the mental load of managing a household, nurturing relationships, parenting or caregiving. Instead, time tends to be a fluid construct integrating the need for flexibility, adaptability and replenishment while allowing for self-compassion and grace, all the while getting things done as efficiently as possible. Talk about a conundrum….
After decades of applying traditional principles of time management, what I, and other women I’ve talked to have found, is that strategic time management for working women and moms is all but traditional or conventional for that matter. What it is, is an ever-changing, fluid construct that can adapt to each working woman and mom’s situation, context and environment. To help in the building of this construct, I’ve outlined what I call the IDEAS framework for strategic time management for working women and moms. This framework is based on the principle of “paying yourself first”, or investing in our most important, career and life-defining long-term goals first and foremost. For example, if your long-term, most important goals include writing a book, paying yourself first would mean investing your time strategically and consistently towards achieving this goal.
The IDEAS framework is as follows:
Identify your most important professional goals:
What are your most important, lifelong professional goals and aspirations? These may even be dreams you’ve had since you were a child, like starting your own business, ascending to the top of the corporate ladder, or research an important cause or topic to you?
Define the tasks to reach these goals
What tasks are needed to reach your goals. In order to write a book for instance, you may have to begin with defining a specific idea, mapping the content of the book, vetting your ideas with trusted advisors or friends.
Establish a time map of your process
Once you delineate the various tasks involved in accomplishing each goal, estimate how long each task is going to require. As a general rule of thumb, double up or multiply your time estimate by 2.5 to get as close as possible to the actual time it will take you, especially as a busy working woman and/or mom. Place these time estimates on your calendar to visualize how and where these would fit along with your everyday other tasks.
Act on it!
Placing your tasks on your calendar in the allotted time slots you’ve defined in the prior step will also allow you to treat these as full-blown appointments with yourself. Treat each task as an appointment for which you have to show up on time, and deliver the expected results. For instance, if you’ve allotted yourself one hour each day to write, make sure to actually show up and execute on a daily basis!
Support yourself and be accountable!
One thing that is often overlooked as related to strategic time management is the amount of support and accountability required. This is especially relevant for working women and moms who have a lot on their plates day in and day out. Finding like-minded women and moms on the same or a similar path can help provide the support needed, and keep you honest throughout this process, as you can also do for others as well!
Would you be interested in applying the IDEAS framework of strategic time management as a working woman and mom? Email us at corporate@thecorporatesister.com for more information.
Welcome to this week’s News Roundup, where we chat about what happened in the news around working women and moms’ careers, businesses, parenting and lifestyles. Read up…
Entrepreneur presents its 2021 100 Women of Impact, and we’re here for it…
In the news this week, Women’s Agenda writes former Facebook employee Frances Haugen’s interview reveals compromising truths about the online giant;
Have you heard about the Pandora Papers? This blockbuster report exposes how the world’s richest individuals conceal their fortune through tax schemes;
Does your company have a returnship program from caregivers getting back to work after a career gap? Forbes tips us off on how to build one;
Are you a small business owner? Black Enterprise lists 5 ways Artificial Intelligence (AI) can help you thrive in this new normal:
Facebook and Instagram were down for a few hours this week, and Business Insider reminds us of the threat this poses for small business owners;
Working mothers are hitting a wall during and as we slowly emerge from this pandemic. Millions among them are exiting the doors of their hard-earned careers for lack of adequate childcare and support. Many more are silently caving under the pressure of wearing too many hats while still having to uphold the very fabric of our families and societal structures. In the midst of all this pressure, the very concept of mothering has been made incredibly more complex than ever, what with the forced necessity to homeschool children while in quarantine, the instability of schools, educational institutions and governments, and the ever-looming threat of economic precariousness, political volatility, and health scares…
The beautiful gift that is mothering has become fraught with uncertainty, pressures and distractions of all kinds, from social media debates on the validity of vaccines to the need to do it all for our children, families and careers without ever skipping a beat…The result? Working mothers are exhausted. Not from the exhaustion that requires a day (or a month) off, or a nice vacation in a far-away tropical location with exotic beaches and strong cocktails…Rather, working moms are in dire need of a simplified, more balanced, less mentally, physically and emotionally tyrannical idea of what parenting ought to be in the 21st century…An idea that demands re-imagining the concept of motherhood down to its essential basics, rather than up to unattainable ideals of performance.
How do we re-imagine, then, a simpler idea of working motherhood than the one we’ve been grappling with for the past 18 months, and frankly, for years before that?
The first step here is admitting to ourselves that we’ve pushed ourselves, often through no or little fault of our own, way past the brink of over-exhaustion. In sometimes desperate attempts to prove we can have it all, so many of us have, consciously or not, subscribed to an elusive idea of performative motherhood anchored in perfectionism, guilt and laced with heavy hints of imposter syndrome.
The second step is to realize at the end of the day that although we can have it all, we can’t have it all at the same time…That everything is a trade-off… That some seasons might have us trade our purpose and fulfillment for our families, while others may have us stepping on the gas of our calling as our little ones learn to fly off the nest on their own…That all in all, even as we may count some as losses and others as gains, nothing is wasted in the building of the unique mothers birthed and grown out of our unique experiences and callings…
Last but not least, simplifying the idea of modern motherhood requires us to make peace with and embrace the uncertainty and change that are not only at the core of motherhood, but has also been our reality for the past 18 months. Understanding that change is the only constant, especially as working moms navigating a precarious global health crisis, not only helps us keep our sanity; but also helps us model a nimbler, more flexible and adaptable way of working and living.
Are you re-inventing a simplified approach to work and life?
