Keep your records organized with these charts

Running your own consultancy requires you to wear many hats. One key to keeping your business running smoothly is keeping organized records. These charts, sent to us by an independent consultant, can help you track business activities quickly and easily.

Maintaining organized records is important for any business. But when your livelihood depends upon having the information at your disposal to bill and collect for the services you provide to other companies, organized record keeping is absolutely essential.

My company, MDE Enterprises, is a sole proprietorship that provides IT management training and consulting services. Being an independent consultant means that I must do most of the administrative work myself. Until my company is large enough, it is better for me to avoid additional labor expenses.

Some may think that the effort involved in keeping organized records is too time-consuming, but in my case, I believe that having my records in order saves time because I can find information when and where I need it, especially at tax time.

In this article, I'll share with you some of the tactics I use to organize my records, which may help you be more prepared when it's time to put your taxes together next year.

Basic resources
Before we get into the specifics, here are a few details about my approach to organizing records:
  • I use QuickBooks for business checking and Quicken for personal checking. QuickBooks has many useful business reports and is a great resource for analyzing your business. It is invaluable at tax time.
  • Whenever possible, I charge my business expenses during the year with American Express. AMEX provides a detailed annual statement that categorizes all charges, and the AMEX Membership Rewards points that come with every purchase are also beneficial.
  • I keep all miscellaneous purchase receipts in a file folder so that I can input them into my QuickBooks business account every three or so months. At this point, a monthly P&L statement isn’t necessary for my business, although I could produce one if needed. A quarterly input of the transactions seems more productive for me right now.
  • I track revenue closely every month. More on this later.
  • I use Sidekick for a client database. Until a prospect becomes a client, I track it separately, so I have included a prospect table below that you may find helpful.
  • I still use a daily pocket calendar for items like appointments and mileage. I have a nice PDA, but I just can’t get to the information I want as quickly with it as I can with my pocket calendar. I print a copy of MDE’s client contacts from Sidekick and reduce it to fit the pocket calendar.

In my business, I categorize information into the following groups:
  • Clients and prospects
  • Revenue
  • Expenses

Here’s a look at how information for each category is broken down.

Clients and prospects
I maintain two separate databases for client and prospect information. Clients are kept in a Sidekick database, and prospects are kept in a Word table. Prospects are identified at MDE as a company or contact to whom I have presented some type of a proposal (see Figure A). I keep a handwritten list of possible prospects in a notebook for later follow-up. When a prospect becomes a client, it is added to the client database.

Figure A

For a consultant, revenue includes several components:
  • Billable time and expense
  • Product sales
  • Billing for services
  • Accounts receivable
  • Revenue trends reports

Each of these is vital for maintaining a successful consulting business. MDE provides consulting services at hourly rates and for fixed prices, depending upon the service. I also sell training materials over the Internet for which I must account. I can easily track each revenue component either in a Word table or an Excel spreadsheet.

Figure B

The billable time and expenses table (Figure B) helps you maintain detailed records of all time and expense items that should be billed to your client. By keeping records in a table or spreadsheet, it is easy to sort, for example, by company or by date as needed.

The “Billed?" columns provide a simple tracking note so you know what was billed to your client, and the “Paid?” column lets you identify any open items quickly. Put billing dates in the cell and you have an easy method to track delinquent payments. For those that do not use a tool like QuickBooks for billing their services, this can be a valuable tool.

If you sell products, as I do, you'll want to maintain records of each sale and the client base generated from these sales. Follow-up sales are an excellent revenue source as you develop additional products. I keep records on MDE’s Internet product sales in the format shown in Figure C.

Figure C

Here are some suggestions on how you can organize services billing, accounts receivable, and revenue trends:
  • Billing for services: Develop an invoice in Word, QuickBooks, Excel, or any other application with which you can create a professional-looking document.
  • Accounts receivable: Don’t allow your accounts receivable (A/R) to grow. The longer the A/R ages, the harder it is to collect. The simple billable time and expenses table (shown in Figure B) can help you quickly identify A/R that needs attention.
  • Revenue trends report: I have several revenue categories that I track monthly to analyze what is working and whether I’m trending in a manner that will meet current-year goals. The report (Figure D) can also be used to develop a quick revenue forecast or budget for your practice.

Figure D

For tax purposes, you need to save receipts for all expenses billed back to a client as well as for expenses incurred for your company.

Every week, I transfer the week's business-expense receipts to a folder or a large envelope at my home office until I get a chance to update the QuickBooks database. I dread the update process but, for now, I choose to do the job myself.

You can also maintain a simple expense log, if you prefer. The sample log shown in Figure E shows what you need to track for taxes, and it also doubles as a travel mileage log.

Figure E

Bottom line
Researching and doing a lot of administrative work later on always takes more time than tracking things as you go along. The tools I've mentioned help me stay organized so that I can continue to be productive in my work. They're also a great way to get a quick look at what’s going on in your business.

Mike Sisco is president of MDE Enterprises, an IT management training and consulting company based in Atlanta. Check out MDE’s IT Manager Development Series for more of Mike’s advice.

What helps you keep track of your business?
Obviously, there are a variety of ways to track your business activities. Are there forms that you’ve developed that work for you? If you would like to share them, send them our way. We’ll publish them in future articles.


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