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Business Accounting How to Create a Budget *SIMPLE*

welcome to business accounting how to

create a budget this is really geared

towards smaller businesses and I'm going

to show you a daily tracking worksheet

that I have behind me Amanda here from

the business finance coach and in this

video I'm going over business accounting

and how to make a budget my goal in this

video is to really simplify business

accounting and budgeting into one task

that you can do and a habit that you can

build for your business I give this

spreadsheet template out with my

business spreadsheet template but this

worksheet is specifically to keep track

of your business accounting as you're

earning and spending instead of

something that you would use if you're

trying to go back and catch up your

records quickly at the end of the year

now here's the thing business accounting

records they're supposed to be kept

regularly this is required for taxes and

legal purposes it's really a benefit to

us as business owners if you don't know

your money and when I say know your

money I mean really know your money

because you look at your money every day

and you know where every penny is going

and coming from and when it just gives

you an amount of information that gives

you more power over your experience

money is freedom right and often times I

think I find that business owners think

that they know their money when they

don't really know their money from my

own personal experience like I am in

business finance that was my industry

day and I was really an expert in that

industry but when it came to my personal

money I avoided it didn't want to look

at it I didn't keep my personal or

self-employed business records at first

updated regularly and I didn't think

that I had a problem like I thought it

was fine you know I know this stuff and

I just didn't think I had time for it I

didn't think that I could do it right

then like there was just more important

things over the years I have learned

that really knowing your money

prioritizing your money and organizing

it and knowing it it just shifts

everything because as humans we have

relationships with everything and we

have a relationship with money and the

more I've gotten to know successful

business owners they always know their

money as well and so now I can really

see that connection clearly that's part

of the reason why I'm passionate about

this video and about a course I'm doing

that helps people build this habit so

now let's jump into the spreadsheet I'll

be walking you through the steps that

you would actually take to keep track of

your accounting records as you're

earning and spending and then how you

can do a budget in here as well and know

what your bank balance will be in the

future this is gonna be like the most

basic way to do this so the first tab

you can see it says self-employed daily

tracker

this one says LLC or if you just want to

use it this one is a reconciliation this

is reconciling your bank account as you

go and you're gonna know what your bank

balance will be in the future but this

is only gonna be really useful to you if

you actually primarily use your bank

account and as an LLC you should be

using a bank account in your LLC name

and having a complete record like this

spreadsheet to reconcile everything that

comes in and out of the bank account

because an LLC is a separate business

from your personal self this first one

is just keeping track of income and

expenses and that gives you your net

business income per day and then for the

month at any given time right here you

can see we have a column for each day

1st 2nd 3rd 4th 5th all the way to the

31st and pending cuz at the end of the

month you might have some things pending

so here you will list your income items

and here you'll list your expense items

use whatever makes sense to you you

might just have one one column income or

you might want to keep track of things

in different ways it might be more

convenient for you to say like Joe or

Suzie who pays me in cash or company X

who I do some jobs for occasionally like

whatever makes sense label it that your

expenses

label them whatever you call them you

can use my business spreadsheet template

to sort these categories at the end of

the year and automatically total them up

into the tax categories for during the

year while you're keeping your records

you want these things to be what makes

sense for you in the right column you

can see the totals in the darker color

totally not for the month so once you've

been keeping track as you go doing one

column each day entering what you earned

and spent then you have the totals that

you're actually earning and spending and

you can use these to start to budget in

the future now I'm gonna explain this

process of keeping your accounting

records as you're earning and spending

and budgeting for the future

on the second LLC worksheet with the

bank reconciliation because I find it

most helpful to be able to know what

your actual bank balance is going to be

more than what this worksheet tracks

which is just your net business income

so it's really up to you now when I

first started keeping my records I kept

two worksheets one for my self-employed

business and one from my personal

spending and then I would keep track of

the amounts I moved from my business

bank account into my personal bank

account so I kept two of the worksheets

I'm going to show you next the bank

reconciliation knowing what your bank

account is going to be in the future

based on how you earn and spend is

really useful so that you can actually

use the information because that's where

so many people get stuck is having the

accounting be meaningful and something

that they can actually use to make

decisions when you get started on this

spreadsheet you enter the month that

this worksheet is for and you start out

on with the first of the month you're

going to enter your beginning bank

account then remember this is day by day

by day as well and then we have our

totals for the month totaling up down

here we have the same income section and

the expense section but instead because

we're reconciling a bank account we have

an entire section for bank increases if

as an owner of your LLC you put money

into your business bank account May

because you need to pay some business

bills maybe a client hasn't paid you

whatever the case you need to keep track

of those contributions that you made

into your business because that's not an

income you don't want to pay taxes on

that so that's what this line here is

for and then down here we have Bank

decreases so any amounts we pay us that

goes to a capital account let's say we

did some personal spending out of our

business account that would go here

under other personal spending and then

we have all of our business expenses and

so we have our total bank decreases and

total bank increases which includes our

income and our expenses down here but it

also includes those other categories so

that we account for everything but we

have our net business income or loss

just like on the other worksheet total

income - total expenses but we also have

our ending business bank account and if

we click in here we can see that this

starts with our beginning adds our bank

increases subtracts our bank decreases

and that gives us our ending balance so

today's the 13th and we're going to

reconcile our bank account or let's say

it's a twelve to get started you need to

get out your receipts or wherever you

wrote down what you've been earning and

spending you need to come in to your

spreadsheet and in this case we use our

bank account so we're gonna open up our

business bank account log in on an app

on your phone or on your computer maybe

you like to print and then you want to

go through and you want to enter all the

income you've received and all of the

expenses that you've paid and you can

see here I put a note when you're

keeping track as you go you can keep

track of more detail and you can put

that in by going right clicking and

selecting insert a note and then you can

type in to keep some extra information

handy once we're done we're caught up

you can see down here enter your ending

bank balance because we're reconciling

our records on the 12th we can enter

what our ending bank balance is today to

make sure that we're correct so let's

say our bank balance was two three four

four oh my goodness look we're two

six dollars off we actually had a 206

dollar expense let's put that right here

and there we go now look we're even on

our bank reconciliation so ideally to

build the habit of maintaining your

records regularly since getting this all

caught up for the first week and a half

gonna take it sometime tomorrow to build

this habit we want to come back and we

want to say okay did we earn anything

and did we spend anything today oh we

spent $600 we earn 200 okay we got that

in so what is our bank balance now now

our bank balance is one nine four four

okay

we're reconciled and see how now you can

see oK we've we updated our records both

of these days and we entered our ending

bank balance that's how you keep use

this to keep track of your records now

to use it to budget you can see we have

some numbers over here on the right what

are these these are the amounts that we

think we're gonna earn for the rest of

the month these are the expenses that we

think we're gonna have for the rest of

the month 40 44 and 44 the things we

have to spend on so if we come down here

to our bank balance we can see first of

all what our net business income is

total income minus expenses for the

month even though we're only over here

on the 13th we can see what we think

it's going to be for the month and what

our bank balance will be I want to spend

$1,000 on a new computer because my

computer died what will happen if I

spend that thousand dollars and also 600

on XYZ on this day okay now we can see

what our bank balance will be it's gonna

be lower of course but I hope you can

see how this can help you and then

tomorrow on the 14th when we come back

to update our records again we're gonna

come to this column and enter any income

we have we're not expecting any but

maybe we end up getting some so we could

put that in and any expenses we have

we're not expecting any but maybe we

decide to pay this $40.00 expense

earlier so we would put it in here you

see how this works

then we'd come down here and enter our

bank balance accordingly

and voila we're maintaining our records

as we go and we're keeping a budget so

on whatever day we have the time we

could also create a copy of this

worksheet name it our April records and

then click duplicate to make another

copy of it and we would already have our

income and expenses our common ones in

the worksheet and then we can clear out

everything in the worksheet by just

highlighting everything and clicking

delete

I'm gonna undo that and we can plan for

next month and go ahead into the future

now my business for Tait template that I

give away for free includes this

worksheet and it also includes an income

statement by month so it looks just like

this only it has all of the months on

one worksheet now you could link your

totals from here for each month these

would be April's to that worksheet so

that you can see month by month by month

and that's something that you can do if

you're keeping track of your records as

you're earning and spending I hope this

video has been helpful for you if you

want the spreadsheet head over to my

website the link is in the description

below when you sign up there I'll also

be telling you about a course I have

that helps you build this habit which is

live online with me in a virtual meeting

room otherwise I'd love to hear from you

in the comments below or I'll see you in

the next video