Back in the days when I kept the books for my husband’s small business, I did it by hand. Businesses that could afford a mainframe computer might utilize bookkeeping software, but it wasn’t something that could be done on our Commodore 64. I got myself an adding machine, attended an IRS class for small businesses and enjoyed the chance to put my accounting classes to practical use. Income and expense records were the main focus. The business had no employees, excepting the unpaid bookkeeper, so I didn’t need to worry about payroll. Selling a service removed the inventory concerns associated with product sales.
Despite the simplicity of our needs, the system proved quite useful. Although I had set it up with tax reporting in mind, it also helped to troubleshoot changes in cash flow. Were clients requesting fewer services? Had certain expenses risen since the previous year? A quick look at well-kept records quickly gave the answers. I found it so useful that I was motivated to setup a personal budget.
My personal budget tracking was less successful. Monthly expenses, such as utilities or mortgage, were easy to track. But receipt items like grocery purchases didn’t always make it to the office for recording. Cash withdrawals were the worst. I never could account for the entire amount withdrawn. As debit cards and POS systems expanded everywhere, it got a bit easier, but I never totally got a handle on personal expenses until the internet came to the rescue. My bank’s software did most of the work, automatically classifying most expenditures and offering every kind of analytical report and graph that my heart desired.
When I became disabled and my income took a nose-dive, I was happy to have a system that gave such a great financial picture. I reviewed expenditures and started some ruthless weeding. Unfortunately, some of the expenses that had to be cut were the fees charged by my bank! I found a bank with an over-fifty account and no fees. No nifty software, either. Things have improved over time and my online account now provides basic categorization and reports. It’s probably enough, since I don’t have nearly as many expenditures these days, but I sure do miss those fancy graphs.