There are a number of things to keep track of as teacherpreneurs. Do you feel like you’re drowning in your bookkeeping? If so, you may simply be making a few mistakes. I’ve written about things you should keep in mind whether you’re going to do DIY bookkeeping or hire a bookkeeper.
If you are just starting out, it’s a great time to read through this list and put these things into practice. If you’ve been selling awhile, but not really worrying about keeping track of your financial records, it’s possible you’re making some rookie bookkeeping mistakes. Here are some of the most common bookkeeping mistakes along with ways to avoid them.
1. Ditching receipts.
I cannot emphasize this enough: KEEP ALL RECEIPTS. Not doing so is a definite bookkeeping mistake. Keeping receipts is so important that it bears repeating in nearly every post! You should not throw your receipts away because they’re literally the only thing you have to cover yourself in the event of an audit.
2. Mixing the personal in with the business side.
This one is probably the hardest!! It’s great that you’re able to be a teacherpreneur and make extra money from the products you’re already making for your students! Really, that’s fantastic and more teachers should try doing the same for a little extra cash.
Nonetheless, it is essential that you not mix your personal expenses up with your business expenses. All those trips to Target you’ve been making because you’ve had extra cash will only allow you to deduct things you’ve purchased for your business.
So be diligent in keeping your business expenses separate. Have the cashier ring up two separate purchases if necessary.
3. Failing to reconcile regularly.
Just as it’s important to keep all receipts, it’s also crucial that you reconcile your accounts on a regular basis. Part of this is being organized and staying on top of that paper pile! Make sure your accounts receivable (money you make) and your accounts payable (bills you have to pay) for your business balance out against your credit card and bank statements.
[clickToTweet tweet=”Part of being a teacherpreneur is organizing your paperwork…or delegating that job to someone who can!” quote=”Part of being a teacherpreneur is organizing your paperwork…or delegating that job to someone who can!”]
Compare your receipts to your statements you’ve received in the mail or through email and make sure everything posts. You don’t need any “surprises” later on when your funds are super tight.
4. Not hiring a bookkeeper.
As much as we teachers like to think we can handle it all, there are times when we have to pass the torch! Hire a bookkeeper to do your taxes and save yourself the grief. It’s very easy to send your receipts on to someone who has the time to enter them, categorize them, and then reconcile all your transactions.
This will put you ahead come tax time! As a teacherpreneur, you will want to hire a bookkeeper who specializes in teacher-authors who sell online. He or she will best know what common deductions you can take that you may have overlooked.
5. Missing deductions.
Again, a bookkeeper who specializes in working with teacher-authors and online businesses will know about deductions you may not. Remember that the deductions you may be counting for yourself as a teacher are separate from those for which you file your business taxes. Your business entity is different from your work as an employee/teacher. Let a bookkeeper who deals with teacherpreneurs on a regular basis help you out!
6. Not backing up data.
While technology is amazing, it does have its pitfalls, namely crashing and eliminating all data. If you’re relying on technology to keep track of your records (because perhaps you’ve been scanning all receipts), make sure you have a backup history of everything.
7. Classifying employees and independent contractors incorrectly.
If you’re doing well enough as a teacherpreneur to hire out help for various things, that’s fantastic! That means your hard work is truly paying off! However, it’s important that you remember to file taxes on behalf of your employee or independent contractor. Those are two separate things, and there is a difference. Make sure you classify them properly to avoid paying too much in taxes.
Teacherpreneurs are in a class all their own! They’re rock stars in the classroom and avid businesspeople outside the classroom. No matter how awesome you are, you need to get a handle on your bookkeeping strategies, so you don’t make any bookkeeping mistakes. You can ensure that you’re on the right path by hiring a bookkeeper who happens to specialize in teacherpreneurs.