Bookkeeping basics, one habit per page
The twenty-four habits that take you from a shoebox of receipts to books you understand.
A diagram, the classic mistake, and one thing to go try. That's a page.
Bookkeeping basics, one habit per page
The twenty-four habits that take you from a shoebox of receipts to books you understand.
Set in Space Grotesk, Inter and JetBrains Mono (SIL Open Font License).
Habits checked against the QuickBooks and Xero education centres, SCORE small-business guides, CISA data-backup guidance, and IRS record-keeping pages as one clearly labelled example jurisdiction.
General bookkeeping hygiene only, not tax, legal or accounting advice. Rules differ by country. Confirm anything tax-related with a local accountant.
Your purchase is for personal use only. You do not have redistribution rights: please do not share, resell, or republish this book or its pages.
© 2026 Steve Hodgkiss. All rights reserved. Personal use only; no redistribution rights.
Edition 1.0 · stevehodgkiss.net
Contents
Money hygiene
Every painful year-end starts the same way: business money and personal money in one pot. Four habits that keep the two apart and make everything after them easier.
- 01The separate account
- 02Capture receipts same-day
One account that only business money touches. Not a clever system, just a wall between two pots.
The separate account
Let's say the business money and the grocery money have shared one account since day one, and you can't say which card paid for the laptop. The fix is boring: a second account only the business touches.
Mixed money turns every question, from a tax office or a lender, into archaeology.
QuickBooks' rule: separate checking, a business card, receipts apart. Then every bank line is a business line.
Two pots, one wall. Open the wall never.
Open a second account and move every business payment and card to it. One sitting, done forever.
A receipt photographed on the day it happens. Twenty seconds now, against an hour of memory archaeology later.
Capture receipts same-day
Let's say the taxi receipt from Tuesday is under the car seat by Friday and gone by January. Photograph it the day it happens, into one folder.
A cost you can't document may as well not exist when proof is asked for.
The photo is dated, readable, and findable on the worst day of your year.
The receipt takes seconds. The memory takes guesses.
Make one folder called Receipts, then photograph the very next receipt you're handed. That's the whole start.
Getting paid
You did the work. These are the habits that turn finished work into money in the account: an invoice with everything on it, numbers that never tangle, a polite ladder for late payers, and cover for the big jobs.
- 01The invoice anatomy
- 02The reminder ladder
An invoice is a small machine for getting paid. It works when every part is on it, and jams when one is missing.
The invoice anatomy
Let's say you sent "payment for the workshop, cheers" in an email, and it stalled, because their accounts person can't process what they don't have. A real invoice carries every part: who, a unique number, issue and due dates, itemised lines, the total, how to pay.
Anything the payer has to query costs you a fortnight.
Xero's guide counts about ten elements. Keep one complete example and copy it forever.
A complete invoice answers questions before they're asked.
Find your best-ever invoice, or build one from the diagram. Save it as the template with every part present.
A fixed set of steps, written before you're annoyed. Each one polite, each one dated, each one a little firmer.
The reminder ladder
Let's say an invoice went quiet two weeks ago and you've spent them drafting an angry message in your head. The ladder is decided once, in advance: heads-up, resend on the day, firmer note at plus seven, then a call.
Chasing by mood means silence reads as "whenever", and the day-twenty explosion costs the client.
Polite and predictable gets invoices paid and relationships kept. Late fees can be stated up front, but what your country allows is local: check first.
Write the four messages now, while nobody owes you anything. Save them with the ladder dates.
Seeing the numbers
You do not need accounting to know where you stand. Four habits that turn scattered transactions into three numbers you can act on, and stop you confusing profit with money.
- 01The simple ledger
- 02Cash flow as a tank
A ledger is less than it sounds: a list of dates, money in one column, money out the other, and a running total.
The simple ledger
Let's say the word ledger made you picture a Victorian clerk. QuickBooks defines it more gently: the hub where every transaction gets recorded. At its simplest: date, in, out, what's left.
A head-ledger always rounds in your favour, and it's invisible when it's wrong.
One row per movement, backed by the paper trail, and the bottom line becomes a fact. Software just automates these same four columns.
Write it down and the ledger does the remembering.
Make the four columns and enter this month so far. One row per movement, receipt number in a notes column.
Think of your account as a tank. Money pours in at the top, drains out at the bottom, and the level is what everything depends on.
Cash flow as a tank
Let's say your best month ever, two big invoices out, and the card still bounced on a subscription. The tank explains it: in and out are different taps, and only the level pays a bill.
A busy month is not a full tank. Work invoiced is not water in until it's paid.
Draw an amber line at a month of outflows; dipping under it is the signal to act. Cash flow is just money moving in and out over time.
Add up one month of fixed outflows and write that number next to your balance. Buffer line drawn.
The day money lands, a slice moves to a pot you don't touch until the bill is due. The habit travels; the percentage doesn't.
The set-aside habit
Let's say a strong year ended with a tax bill and an empty account, because every payment felt spendable. The habit splits every payment the day it arrives.
What slice differs by country and situation; even in one country advisers give a range. US guidance there says 25 to 30 percent, a rule of thumb to confirm locally, never import.
Separate pot, move on arrival: the mechanics are universal.
Open a savings account named Tax. Move a slice from the next payment, then ask a local accountant for yours.
Three copies of everything that matters, on two kinds of storage, with one copy somewhere else entirely. That's the rule.
Backups, 3-2-1
Let's say the laptop with every receipt photo and the whole ledger died an hour before a deadline. The 3-2-1 idea makes that afternoon annoying instead of catastrophic.
It's CISA's published rule for small businesses, not internet folklore, and QuickBooks lists backing up records among its core practices. One copy isn't a backup, it's a bet against hardware, spills and ransomware at once.
Make it automatic: cloud sync plus a drive copy, and the third copy exists without anyone remembering.
Turn on automatic cloud sync for your bookkeeping folder today. Five minutes.