In Part 1 of How to Manage Your Business Finances, I discussed a simple notebook and envelope system for keeping track of income and expenses. I recommend that you read that article first (it will open in a new window), as I’ll touch on issues from that piece here.

For this article, Part 2, I’ll discuss a slightly more complicated, but much more powerful, method of keeping track of these items. This will involve the envelopes from before, but this time we’ll substitute a spreadsheet program for the paper notepads. My personal favorite is Microsoft Excel, and it’s what I used before upgrading to my current system (I’ll explain that in Part 3.) If you don’t use Excel, then some of my instructions below and sample spreadsheet may be different for each respective program.