Organizing Small Business Finances for an Easier Tax Time
This shop has been compensated by Collective Bias, Inc. and its advertiser. All opinions are mine alone. #DymoandDone #CollectiveBias
After hobby blogging for several years, last year was my first year earning income. It was thrilling to see a hobby and a hope bring in extra money to help support my family. But, making money surprised me, and I had no plan for keeping record of blog income and expenses. My sophisticated record system involved tossing receipts and paid bill stubs into my top dresser drawer and flagging emails.
I’m paying for that system now, spending hours recording, organizing, and printing before filing my taxes.
As I get my paperwork organized, I’m thinking ahead to next year’s taxes and setting up a system to avoid this mess! Just a few minutes a week is all I need or organize my small business finances for an easier tax time next year. I came up with a simple system that keeps all my important papers and financial information organized. All it takes is a file box, file folders, a DYMO LabelWriter® 450 Value Pack, and several free printables which I’ll share below.
Every minute I spend fighting to organize my receipts, invoices, bills, and payments is less time I can spend on blogging- the thing that ACTUALLY makes money.
The DYMO LabelWriter® 450 Value Pack, will customize and print address, file folder and barcode labels, plus name badges and more straight from my computer with its own DYMO Label™ software. Its simple system and easy to use features saves my time and keeps me organized. Let me show you how I’m organizing my blog finances to prepare for an easier tax time next year.
First, choose a small file box. This box needs to be accessible. Keep it on your desk, or at least beside it. Wherever you tend to toss important papers to pile up, that’s where your file box should live! Staples has so many options for small file boxes, from a simple plastic box, to pretty boxes that will match your desk decor. I chose a slim, pretty turquoise box that matches the decor in my bedroom where I blog most often. I also picked up a DYMO LabelWriter® 450 Value Pack, extended capacity hanging file folders, and regular size file folders. Don’t forget that the DYMO LabelWriter® 450 Value Pack is now free when you purchase 4 LabelWriter label rolls!
Next, I labeled extended capacity hanging file folders using the DYMO LabelWriter® 450 Value Pack. I have folders for income, expenses, car & mileage, and to file & record. The DYMO’s thermal printing technology eliminates the need for expensive ink or toner, so I don’t hesitate to use the LabelWriter for all my organization tasks. With the LabelWriter I can create custom labels with over 60 layouts and styles.It also eliminates the hassle of printing sheet labels on a desktop printer, which is especially nice since my desktop printer lives across the house in the school room.
Extended capacity or expanding hanging file folders are large enough to hold regular size file folders, further organizing my paperwork for tax time.
My red folder organizes income.
For last year’s income, I’ve had to sift through all the flagged emails in my inbox, which include anything and everything I thought important for the past year. It’s not even all blog related! I’m wasting so much time that could have been saved with a better system.
Using the DYMO LabelWriter® I labeled a regular size file folder for each source of income. I keep separate folders for sponsored posts, affiliate income, review products, and ad networks. Other sources of income filed here might include freelance writing, physical or digital products sold on your website, or guest post income.
Each folder has an income printable paper attached to the front flap, where I record income before filing the paid invoice or check stub in the folder. Download the free income printable here.
My yellow folder organizes all business expenses. This is the folder with the potential to really get out of hand. Breaking my expenses down into smaller categories (and folders) helps keep everything organized. Just use the LabelWriter to label each folder with your expense categories. Categories in this section might include:
- website maintenance – hosting and domain costs, blog template and design, etc
- education- classes, conferences, books on business topics
- utilities- internet, household bills for a dedicated office space
- photography- stock photos, editing software and subscriptions, photography equipment, props
- post supplies
- office- computer related costs, envelopes, stamps
Attach a printable expense sheet to the front of each folder. Download the free expenses printable here.
My purple folder keeps mileage forms and qualifying car expenses. I just use a regular size hanging folder for this section, as I don’t have much to file for this category. I keep a mileage printable in my car, and fill it out each time I drive for business purposes. Once I fill a printable I transfer it to the hanging folder in my file box. Download a free mileage printable here.
In the front of the file box I keep a hanging folder labeled To File & Record. It’s easy to forget what I’ve recorded or not recorded when I file receipts, invoices, and bills. To avoid that, I decided to always record each item on the correct printable before filing it in the correct folder. But, often when I come in from the store, or receive a payment it’s not a good time to record and organize. I quickly found myself with a pile of papers getting shuffled around on my desk. Adding a to record/file folder to the front of my file box ensures nothing gets lost or forgotten. I keep a color coded folder for each category in this file, red for income and yellow for expenses. As soon as I come home from the store, or print a receipt it goes in the yellow folder. And any income documents I receive go straight into the red folder.
Just put papers in the file and forget about them until office day.
Speaking of office day- one of the most important changes to my organization this year is adding two office days a month to my calendar. I am committing to two days a month as ‘office’ days. Look at least two weeks ahead at the calendar and chose a clear day as close to the 1st and 15th of each month and mark it ‘office’ day. Having time clearly marked on my calendar means I don’t suddenly realize its been months since I took care of the necessary financial organization. During my office day I work through my ‘to file and record’ folder, reconcile my bank statement and take care of all paperwork related to the blog.
With my new filing and organization system, office day doesn’t take very long!
Office day is also a perfect time to send inquiry emails, apply to blog networks and campaigns, network, and send prizes to giveaway winners. I’m loving my DYMO LabelWriter for so many things on office day. With several size labels I can send mail and packages to giveaway winners. The DYMO LabelWriter® 450 Value Pack includes a roll of LW Appointment Card Labels, LW Shipping Labels, LW File Folder Labels and LW Multi-Purpose Labels. Since I rarely send out mass quantities of letters or packages the DYMO LabelWriter eliminates the waste and hassle of printing sheet labels since it prints precise quantities without difficulty. I can even print my postage straight from the DYMO LabelWriter!
Are you ready for tax time this year? Check out other great ideas for tax season here.
My filing system leaves just a little to be desired. I love what you’ve put together and how it’s pretty so it can stay “out” rather than being hidden away. #client
Your organization is so impressive. I’m a new blogger and so grateful to have this kind of input to help me get started on the right footing. Thank you!
Ugh… I am so not ready for tax season! Because hubby and I are both self employed tax time takes on a whole other meaning for us. Some months I feel like I am drowning in papers. Love the beautiful blue box..that would go well with the decor in the office 🙂
My husband would be so impressed if I did this with my expenses. I was just thinking I have receipts in my purse I need to bring in.
Oh I need this. I am working on my taxes right now and I am mess! Thank you for the idea. Going to go invest in this now.
I definitely need to do this. I also had no system and made a substantial amount of money. I figured it out but man it was super stressful
It sounds like you have a great system. I am married to an accountant, so he does his own thing when it comes to our taxes.
As a real estate agent, I know the struggles of keeping tax info organized. I normally keep track of this info in excel spreadsheets because it it easier to send off to my accountant but feel like I wait until last minute to send it off! Maybe keeping track on paper will help??
I know I just cannot do it on the computer- I’m a paper and pen person when it comes to financial organization.
These are great tips for tax time to prepare all year long. I use a filing cabinet I have sitting in my living room. Receipts all go in one big tub sitting on the filing cabinet. i think Like the way you organize better.
I think all bloggers can relate to this. I love the organization systems you have in place for tax time. This is an area where I struggle.
As I move to self-employed I am hoping to start organizing my tax returns but there is a lot I don’t understand. At what point would you consider yourself self-employed?
I’m no tax expert, but you can be both self-employed and employed by another person. Any income that an employer isn’t paying part of your social security would be self-employed income.
These are great tips. I think my husband would be shocked if I did something like this!
Such an important and relevant list at the appropriate time of the year. Tax time/season can be so stressful for a variety of reasons but you’ve helped lay it out so simply helping us all rethink our strategies during this time!
Great tips. Staying organized all year makes tax time so much easier. Pretty colored office supplies are a must!
great organization tips! Paperwork piles can be so overwhelming, and in this case, it literally will save you money to be organized! Thanks for the tips!
Great tips! I own a pilates studio and need to organize it better.
I hate tax time with a passion. I put everything into a spreadsheet to stay organized.
This is great! I love labels, and need to do something about my small business and record keeping – and I was an accountant before a blogger so you would think I would know better!
I know the feeling of having a hobby you truly enjoy turn into a career that can support your family. I just recently made that switch myself. Congrats!
Congrats to you too!
I need to get organized like this. I have 2 small business and paper everwhere.
this was extremely helpful to me! My husband recently became a small business owner and his office/desk area is a mess. He has a filing cabinet, but papers are everywhere. I think I’ll persuade him to invest in a DYMO printer to help him stay more organized. Thanks for writing this!
You have a great system there! I love it. I need to start being more organized with my finances. I started making a list of monthly income to start.
I like the system you use, very well organized. My husband do the most part when organize our tax, but your tips are very helpfull.
This is great! Thank you for this wonderful post. I pinned it to Blogging to refer to it in the future.
This is the first year I’m having to this and I have been scared of it. You post made it seem so easy I’m actually looking forward to it!
Labels and organization makes me happy. I so want one of these label makers!
I am on the let’s shove this in the first drawer category. But in my imagination, I am a super organized person. Great tips on reconciling my multiple personalities!
I love your idea of a dedicated office day. I need to have one of those so bad. We have a filing system, and I use that term so loosely, but it is in a world of hurt. Maybe if I could try out your office day suggestion I might make a little sense out of it!
It’s made all the difference for me- before I’d definitely say I only ‘loosely’ had a system!
One of my goals this year is definitely to start monetizing my blog! I’ve read a ton about taxes + filing in preparation for that. I definitely don’t wanna get stuck freaking out come next tax season!
Best of luck! It can be overwhelming, if you let the paperwork get out of hand- but if you start organized you’ll have no problem!
Must be wonderful to have a good label maker like that. Keep it up!
I’m so happy that I got my taxes over and done with earlier part of this month. Therefore, I’ll definitely have to keep this advice in mind for the next tax season!
I’ve seen those label writers around and always kind of wanted one. Now that I know exactly how it works and how useful it is, Ill have to look one up!
These are some great tips! This was the first year I really had to file real taxes with my blog, all years pasted it was easy since I did make $, it just wasn’t a ton. Nothing to really worry about expenses ect about….This year Ughhh…. I now know what to do different next year lol….
This year, one of my goals is to start monetizing my blog. I’ve been reading a lot about taxes and filing in preparation for that, and I don’t want to get stuck freaking out come next tax season! I’ve found some great resources to help me, and I’m excited to start putting them into practice.