Who knew this little tool could make such a huge difference in the success of my business!
In the beginning stages of my business, I was floundering around making small amounts of money. But once I started accounting for the income I was making and where it was coming from, it gave me a bigger picture of what was going on in my business.
I have helped many people go from broke and completely scared about their finances to celebrating because they have retirement investments, paid off all their debts, and own assets. There are a few key things I shared with them and those things made all the difference. These are very simple tasks and habits to incorporate into your everyday life. One of those things is becoming more aware of your money through recording every dollar spent and every dollar made. Think of this as your very own income and expense report.
What happens when you record your money flow?
When you track income, you suddenly see what is working for you so you can do more of that. And you see what isn’t working for you so you can eliminate those things or clients. I have found that debts seem to get paid off more quickly, and my income increases faster when I am tracking my income and expenses in this manner.
A simple Excel spreadsheet makes tracking income and expenses a breeze. There is something oddly satisfying from being able to compare one month to the next easily and to be able to say, “I need to cut back on doughnuts for the office,” or “I need to focus more of my efforts on this kind of client.”
Tracking income and money in this way was really the first step in my success. In the beginning, it gave me a snapshot of all the things I was doing so horribly wrong and so incredibly right!
Related Articles:
11 Reasons You’re Broke and Have Trouble Saving Money
Income Report 2018 How I Made Money Online
Why Tracking Income Works
1. Tracking your income shows you who your ideal client is.
It gives you an idea of what you need to keep doing to attract your ideal client and how to get more clients like them. Once you start recording your income, you will start to see who repeatedly orders from you. Then you can look for a trend in the types of people who place repeat orders, and you can hand pick the ones you favor!
2. It shows you what products or services are performing best
This is a no brainer! Possibly the greatest information you will receive from tracking your income is seeing which products or services are outperforming others. Once you get a snapshot of highest performing products, you have validation about what your customers want. I don’t have to tell you what to do next!
3. You can also get an idea of time and energy spent
Wouldn’t you love to know if it’s better to spend 40 hours a week making $20 an hour or 10 hours a week making $100 an hour? Of course you would! You don’t want to work harder for your money! Tracking your income along with how many hours you spent will tell you right away where you need to make adjustments. With time, you can hand pick which orders to fill and reject the ones which are more time consuming!
4. It shows you where you can delegate
If you are tracking your income along with the hours spent, you can also decide which orders or clients need your special attention, and which can be delegated to others. Delegating could be a huge help to your client because you can hand them off to an expert who can help them with their problem. It is wise to take a look at your expenses as well and decide if you need to get more help or cut back.
5. Release the clients who complain, need tons of special attention, or never pay on time
It makes no sense to keep clients who are a drag. Tracking your income and time will allow you to assess which clients are consuming your valuable time and ENERGY. There may be clients who spend a lot of money purchasing your products or services, but then they end up calling you all hours of the day. Focus on getting clients who need minimal care-taking. Provide them with expert, quality care when they need it. If they become needy or dependent, simply let them know you don’t think this is a fit.
6. Tracking income encourages you to hit your new goals
Recording your income gives you a monthly total to celebrate! And having this on paper encourages you to hit that mark or do better the next month. I’ve noticed if I record my workouts on a calendar, the same holds true. Simply tracking your daily, weekly and monthly income gives you a new number to overcome. I can’t tell you how exciting it is to start out and see your initial numbers and then watch as each month goes by and your numbers double or triple. Hitting your income goals should not be your only motivation for being self employed, but it sure does encourage you to keep going.
7. Tracking Income Effectively
When I first started my business, I simply used an Excel spreadsheet. I listed the date, the name of my customer, the sales total, the hours spent on the work, and whether payment was received or billed. I quickly realized I needed to also record expenses and ended up purchasing an accounting record book like this one. Anything you spend for your business will need to be recorded so you can make the proper deductions at tax time. After about a year in business, I purchased Quickbooks Desktop Pro and that’s what I’ve been using ever since. You can produce income reports, receivable reports, as well as easily bill customers by email. There are also great mobile payment processor programs available like Square which allow you to take credit cards on the spot. They also produce reports which you can have emailed to yourself or your accountant daily.
My Best Tips for Tracking Income
- Don’t spend a lot of money on tracking software in the beginning. A simple record book works!
- When tracking income, record the date, customer name, product or service purchased, hours spent, and whether they paid.
- Keep it up. What you are going for is a comparison over time when tracking income.
- Spend time assessing your report each month and see where you need to make changes with clients or products.
- Celebrate and reward yourself and team when you break records or outperform prior months!
What are your income goals and how might tracking them help you?
Leave a Reply
Your email is safe with us.