This post may contain affiliate links, which means I may earn a small commission if you make a purchase through them — at no extra cost to you. I only share products and tools I truly love and recommend!

Whether you're just starting out or looking to gain a better understanding of your finances, this blog post will give you the bookkeeping basics foundation you need to understanding exactly what you need to be doing when it comes to your boutique bookkeeping.

Picture this: You've got racks of stylish clothing, shelves filled with accessories, and a boutique that's an absolute dream come true. But here's the thing – running a boutique isn't all about fashion and flair. It's about making sure your financial house is in order too. That's where bookkeeping comes into play!

So, What Exactly is Bookkeeping?

In the simplest sense, bookkeeping is the process of tracking all the money in your business. It's essentially sorting all the money that you spend into different buckets – inventory, software, debt payments, etc…

On the flip side, it's also recording all the money that you're bringing into your business – whether that's from product sales, sales tax you collect, shipping income, or from any other source.

Bookkeeping is the process of tracking all of the above, and the end result becomes reports that will summarize all of that for you.

Why is Bookkeeping Important for Your Boutique Business?

Bookkeeping is important for a number of different reasons:

1. It helps provide financial Clarity: Bookkeeping helps you understand how much money you're making, where it's coming from, and where it's going. This clarity is essential for making informed business decisions.

2. It Makes Tax Season Easier: Come tax time, having well-organized financial records makes it a breeze to get your taxes done. No more last-minute scramble!

3. You can spot trends & patterns: Bookkeeping allows you to identify trends in your boutique's sales and expenses, helping you plan for the future and make adjustments as needed.

The Bookkeeping Basics:

If you're brand new to bookkeeping, here's a quick run down of what you really need to know & do in your business…

1. Separate Your Personal and Business Finances: Create a separate bank account and credit card for your boutique. This separation makes it easier to track and manage your business finances. Plus, if you have an LLC, this is actually a requirement so you don't void that legal protection.

2. Choose a Bookkeeping System: In the early days, you can probably get by with a customized spreadsheet like this one here. But, once you start having a lot of activity, you'll really benefit by using a bookkeeping software like QuickBooks Online, or even hiring a virtual bookkeeper. Find a system that works for you and your budget, but make sure you have SOME type of system in place.

3. Record All Your Transactions: Every single penny that flows in and out of those business accounts needs to be tracked. This is often referred to as “categorizing” your transactions, when you note what that transaction was for – buying inventory, paying rent, sales deposit, etc…

4. Reconcile Your Accounts Monthly: The word “reconcile” means to compare your bookkeeping records to the statements provided by your bank, credit cards, and payment processors to ensure that you actually have every transaction recorded. If you use a software like Quickbooks, this process is relatively simple. If you're using a spreadsheet, it's a little more of a manual process.

5. Keep Everything Organized: Beyond the actual “bookkeeping” itself, you want to make sure that all the receipts, invoices, and financial documents that support the bookkeeping is organized as well. This will save you time and headaches later if you ever need to look back at something, and you may need to provide these documents if you are ever audited.

That's the Bookkeeping Basics!

Remember, bookkeeping might sound daunting, but it's like any new skill – it takes a little practice, but once you get the hang of it, it'll become second nature.

To wrap this up, bookkeeping is the necessary foundation to help you make sense of your money. If you need a little extra help making sense of the money-side of your boutique, then I want to invite you to register for my free, on-demand masterclass, “Make Your Money Make Sense”, and feel free to reach out with any questions!