Track Your Medical Transcription Income and Expenses
You don’t need to run out and learn double-entry bookkeeping in order to manage your own medical transcription business finances. It’s not like you’re going to hire employees, lay in supplies, and start building widgets and shipping them to China.
More likely, you’ll start out with one or two transcription clients. You may expand your client base from there or keep it just like that.
Although you could track your business income and expenses using a handwritten ledger and a shoebox, there are better ways to go about it. The table lists them and summarizes the pros and cons of each.
|Handwritten ledger or notebook||It works even when the power is out.||It’s slow, inflexible, and went out with the Stone Age.|
|Computer spreadsheet||You probably already have a spreadsheet application (such as Microsoft Excel) on your computer. It does the math for you.||You’ll have to set it up and enter formulas. Unless you’re a whiz with spreadsheets, you won’t get many useful reports out of it.|
|Personal finance software||It’s inexpensive, and you already may be using it for personal finances. You can automatically download transactions from your bank and credit card accounts to the software.||It doesn’t provide much in the way of invoicing and client tracking functions. It wasn’t designed to keep track of clients and receivables.|
|Small business bookkeeping software||It works a lot like personal finance software but includes better invoicing, business reporting, client and cost tracking, and lots of helpful reports.||It’s more expensive than personal finance software, and you may find all the features and options confusing at first.|
|A professional accountant/bookkeeper||You can focus on transcription and keeping your clients happy. Meanwhile, your paperwork and business finances are being managed by a pro.||You won’t have intimate knowledge of your finances. There may be a lag between when things happen and when your bookkeeper enters them into the system. It’s also the most expensive option.|
Unless the thought of managing your own income and expenses triggers an urge to run screaming down the street, a software package is usually the best bet.
Just because you do your own bookkeeping doesn’t mean you have to prepare your own tax return. Hand over the reports from your bookkeeping system and let a tax-prep person have at it!