Last week, I talked about why we each need to track our income. Today, let’s go over how we can track our income. It’s nice to have all sorts of fancy software that can roll over, sit up and track your income. It’s not absolutely necessary, though. There are plenty of simple options, that can work off of software you already have, or you can even go low tech and track it on paper.
As long as you’ve got a shoebox full of receipts somewhere*, all you really need is a system to track some very basic variables. You can use a ledger book, an Excel spreadsheet or any system of recording information you like. Personally, I advocate a spreadsheet (Excel, Open Office, Google Spreadsheets, whatever), because it’ll do all the math for you and there’s less of a chance of mistakes creeping in. The only necessity is keeping your system up to date.
Once you’ve decided what recording method suits you, set up columns and track the following:
- Who paid you
- How much they paid you
- When they paid you
Personally, I like the idea of eliminating extra files, so why not add a couple of columns for when you invoiced the company in question, and how much you invoiced them for. This can help you get an idea of when you should be receiving income, and who you need to be chasing after to collect your money. But keep it simple. If it’s simple, you’re more likely to keep up with it.
*Sort your receipts, if you like your accountant and don’t want them to think of you with rage come tax season.