Mind your own business

February 26, 2011

By AL BRILL

This is the first in series of articles about minding your business, whether your business is providing goods or services to others or even if your business is simply making sure that you and your family are keeping your head above water.

Whether it is for “business” or personal reasons, one of the best ways to stay financially solvent is by tracking your expenses and then analyzing them on an on-going basis. This provides the basics for a real working and viable budget. For most people a program like Quicken for tracking and Excel for analyzing will do the trick. I’ve used both for years and will tell you, “It Works!”

Let’s start by taking a look at personal finances. Early in the year (NOW!) is about as good a time as any to start managing your finances a little better than you have in the past.  The stream of W-2’s, 1099’s, 1098’s and other tax documents that have flooded your mailbox since the first of the year has now slowed to a trickle, your proverbial shoe box full of receipts for 2010 is probably a disaster and April 15th is not all that far away.  So let’s get going and let the fun begin.

You’re going to need some business size envelopes, a few file folders, some jumbo size paper clips, small and medium size binder clips, a yellow highlighter, a couple of pens and a note pad of some kind.

Step one: sort all of your receipts by vendor (WalMart in one stack, Costco in another, your dentist of doctor in another etc.) If you also use WalMart’s pharmacy, be sure to keep those receipts separate from the others. Use the yellow highlighter to highlight the dates of purchase and if there is a significant item on the receipt, highlight it as well. Sort your credit-card statements as well.

Now go through the vendor receipts and sort them by date, oldest to the bottom of the stack, looking for tax-deductable items such as prescriptions and any large purchases (refrigerators etc.) you may have made. Separate out the non-tax deductable receipts from each vendor (retailer) and put them all in one envelope. Along the left edge of the envelope, write 2010 at the top of the envelope with the name of the store below it so that it is on top if you hold the envelope at a 90 degree angle. When you’re done you will have several envelopes depending on how many different stores you shop at. Then take all of your receipts for medical related items (prescriptions, oxygen, doctors, dentists) and place then all in one envelope, again with 2010 across the left side and Medical just below. Do that for each type of deduction and you have taken a big step in doing your taxes.

As long as you are in the mood grab another handful of envelopes for 2011 and get started on separating and organizing right now.

I scan most of my receipts using a Fujitsu auto-feed scanner and sorting them using Adobe software as I go along.  We’ll discuss more of that next time.  I’ve also just heard about another device with some interesting software that I will try to take a look at and report back on it as well.

If you have any questions, comments, or ideas for future columns, please feel free to send an email to slobusiness@att.net.

Al Brill is life-long entrepreneur with years of experience in computers, marketing, and business consulting.