You wouldn’t be the first person to get to the end of the tax year and realise that you have put off looking at your books since last April. You wouldn't even be the first person to see January 31st approaching and feel the deadline for filing looming in your not very distant future, and still be putting off looking at your books.

Do your bookkeeping monthly may sound like the kind of sensible but boring advice that goes along with ‘eat your vegetables’ or ‘take off your makeup before you go to bed’.…something you know you should be doing but just haven't found a system that makes it painless, or dare I say it, even enjoyable.

But I promise you that staying on top of your finances feels super satisfying. When you know how much money you’ve made each month it will change the way you operate your business, pay yourself and even make you more money! Stay tuned and I’m going to tell you how!

Save Time

When you save up your bookkeeping to do all in one day at the end of the year it can feel really overwhelming.  Where do you even start?  You’ll spend time feeling stressed, looking for all the documents you need, just making one more cup of tea and then you promise yourself you’ll start! 

If you have a pre-prepared spreadsheet. like my Sole Trader Bookkeeping Template, or some kind of accounting software, like Quickbooks or Xero and it’s part of your monthly routine you won’t feel like this.  It will take you maybe an hour a month. Which sounds much less stressful than one whole 12 hour day, doesn’t it?

Catch Any Issues

When I do my client’s bookkeeping at the end of the month I make sure that all the invoices have been paid. We have a record of all the invoices that went out and we match them up with all the payments that have come in and it’s easy to see if anyone hasn’t paid their invoice.

This is much easier if you have a dedicated business bank account, which is my number suggestion for everyone. (In fact if you don’t have one, stop reading this and go and open one immediately, I’ll wait!)

If you aren't checking this on a monthly basis it’s really easy to think all your clients are up to date when actually this isn’t the case. The sooner you can address this the less awkward conversations you are going to have down the line, and you’ll lessen the likelihood of too much time passing to be able to address it at all!

Notice your Income Cycles

You will notice that some months you are earning less money than others.  Commonly this will be in August and December as clients are away, or busy preparing for holidays or you simply don’t want to be as busy yourself! But if it's other months, and you are doing your bookkeeping monthly, you will notice this trend and it will help you prepare and budget better for those less busy times.

You can keep more money in your account because all of your expenses will be the same, but your income may not.

See Where You Are Overspending

We have all done it! Signed up for a subscription to something and then forgot about it. Or loved using it for the first few months but then didn’t find it useful going forward. Or signed up to a directory which isn’t bringing us any new clients. Or accumulated more audible credit than we could possibly use without a three week holiday by ourselves! (maybe just me on that last one?)

If you let these things go by without noticing you could spend hundreds of pounds a year unnecessarily.

Make Informed Decisions

If you need to buy a new laptop, printer or fan for your therapy room how do you really know if you can afford it? Maybe you’re considering getting some help like a virtual assistant but feel really unsure about making this financial decision.

The number in your bank account doesn’t tell the whole story and doesn’t let you know HOW MUCH you actually have free to spend.

By doing your bookkeeping monthly you’ll be able to make real, informed decisions about what to spend your money on, how much you can take for yourself and how much you need to save for the dreaded tax bill.

It may also help you make decisions on your session fee, how many low fee clients you can accept and what you can commit to financially each month.

Conclusion

You can’t just trust the number in your bank account to tell the whole story of the financial health of your business. Keeping on top of it monthly is better for your bank balance and better for your state of mind!

Download my bookkeeping template here and if it’s before the end of April 2023 you’ll get access to a free workshop on May 8th 2023. You'll be able to come along and get everything set up with me and process your first month's expenses!

If this was helpful watch my YouTube video where I discuss Bookkeeping Tips for Private Practice in more depth!

Why you should do your bookkeeping monthly!