The basics of bookkeeping have been the same for centuries…

Until about 10 years ago.

Since then, there have been more changes to bookkeeping than have occurred in the prior two centuries.

Here’s the prime reason why the practice of bookkeeping has totally changed nearly overnight… and one huge trend that will continue for the next 2 decades.

Bank technology has improved the speed of transaction reporting dramatically.

Banks are basically becoming software companies.

It’s only in the last couple of years that our banks’ data flow into accounting systems like Quickbooks Online is now actually highly reliable, consistently functioning, and thus useful.

But what this actually means is that Software is EATING bookkeeping alive.

Yes… in the near future, the old processes bookkeepers have used will become far less useful, and software will handle nearly all of it.

That said, here’s a question to ask yourself:

Is your bookkeeper working with this shift? Or fighting against it?

Working with this shift means your bookkeeper is providing clean, accurate data for your business, and on a much faster cadence. Not monthly reconciliation and quarterly reports — but daily reconciliation and weekly reports.

A bookkeeper who’s fighting against this shift, however, will clog your business with unnecessary and antiquated methods for reporting and reconciliation.

Here’s the huge trend you need to know about: this shift from slower data to faster data is not going to stop or slow down.

We’ve moved on from mailed statements to digital ones. We’ve moved over to a system of daily reconciliations for bank feeds.

But financial transaction data — the stuff that bookkeepers handle — is on a trajectory toward instantaneous reconciliation.

Which is to say: shared knowledge, in multiple locations, of high accuracy, of any transaction, at any time… with no wait, no escrow, and no holding times.

I suspect it will take 20 years to get there, but it’s distributed ledgers that will get us there.

This is what’s called Blockchain technology.

(Perhaps more on “Blockchain” tech in a future post.)

For now, the only thing you need to know about Blockchain is that it’s a technology that is going to rise over time and make transactions between parties immediate.

That means instantaneous reconciliation.

That literally means no bookkeeping as we know it today.

And that’s why we do Everything Every Week.

It’s a nod to the reality that bookkeeping had better speed up… and well before we hand the baton complete over to Software, little by little, over the next couple decades.

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Some bookkeepers approach Sole Proprietorships as if they were corporations.

This is a mistake.

Why? It results in the wrong kind of bookkeeping approach.

Specifically, your bookkeeper ends up doing TOO MUCH.

Which means they will charge you too much.

And they will restrict you too much, in the name of unnecessary compliance.

Imagine you hurt your ankle.

The doctor takes x-rays, confirms it’s sprained and not broken, and then says:

“We’re going to put a cast on your ankle, as if it were broken.”

“A cast??” you protest. “But then I won’t be able to walk without crutches… I thought casts were for setting broken bones?”

“They are,” says the doctor. “But it’s better to be safe than sorry.”

Many accountants and bookkeepers do this to Sole Proprietors, in a different form:

They treat your Sole Prop like it’s a corporation.

When you ask “Is that all totally necessary for me? Just as a Sole Proprietor?” — they might say something like: “Strictly speaking, no… but it can’t hurt.”

It can’t hurt?…

We aren’t talking about bullet proof glass here. This is a small business. It’s highly fragile — you’ve sunk resources and time into it. And statistically, most businesses like yours FAIL.

So whenever I hear “It’s better to be safe than sorry,” I tend to think:

It’s actually better to be precise about what’s best, and then do it.

Other accountants and bookkeepers really struggle with this.

That’s because most of them learned bookkeeping through apprenticing with others, and it’s simply easier for them to do what they’ve always been doing.

Here’s another issue…

Your bookkeeper and accountant are likely keeping all their clients’ books in the same way, even though your business is different and has less requirements.

Which means they will prescribe the most rigid compliance needs to ALL of their clients — including those who don’t need it (i.e., Sole Props like you).

In other words:

They put casts on your legs, slow you down, and possibly cause your business to fail.

But they will tell you that it can’t hurt.

A final thing to keep in mind…

Your accountant makes most of their money on more complex clients, so your specific needs are less visible to them.

The reality is, they expend more work but earn less money if they focus on your Sole Proprietorship instead of their bigger, more corporate clients.

It’s like taking your sprained ankle to a doctor who really only makes their money from putting casts on people.

And look — now you’re wearing a cast, too!

Well… that’s because it’s the most efficient way for HIM to treat every patient.

And not because it’s what you need.

If you want to get exactly what you need and only what you need for your Sole Prop, schedule a free consult with us at Everything Every Week!

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Today I want to provide an answer to the question that most accountants fail to answer: Why?

This question comes in a hundred different forms:

• Why can’t I call this thing that thing in my bookkeeping?

• Why do you want me to do it differently from what makes sense?

• Why is this so complicated and stupid?

And most accountants will answer your Why? with something like:

“That’s just how you have to do it.”

This is not true.

I will give you a better answer to the question of Why? because I have a broader perspective than other accountants.

I have a broader perspective because I became an accountant accidentally.

I accidentally learned accounting from a Zoomed-Out Perspective, and then from a Zoomed-In Perspective.

Zoom Out:

I worked at a startup with a CFO who used confusing accounting terms to hide some weaknesses we were experiencing as a company.

I realized I needed to learn accounting in order to understand (and possibly to counter) some of what the CFO seemed to be doing.

Eventually, I ended up managing most of the CFO’s former reporting lines… and $50 million of revenue as the Chief Revenue Officer.

This was when I first learned accounting. It was very Zoomed-Out, “high level” stuff.

Zoom In:

Years later, I was hired to consult for a busy Tax Accountant.

Her heavy workload was a mystery to me, because she had very bad business practices. But she also acquired tons of business.

So I wanted to understand the x-factor that makes this equation work:

• Bad Business Practices + x = Tons of Business

I did an intensive apprenticeship under her and learned what that x-factor was.

You see, most accountants provide confusing answers when asked for advice. But this accountant always told her clients exactly what to do. In fact, she would sometimes scream it at them and throw them out of her office if they didn’t listen.

I was lucky to learn from such an intense leader, because she kept me on the ball—just like she kept her clients on the ball.

In that time, I gained perspective while she taught me to do the accounting her clients needed in order to prepare their taxes.

This was very Zoomed-In, “root-level” accounting.

Back to the question of Why?…

Something you should know is that people who become accountants on purpose specialize in one small point on the Zoom In <-> Zoom Out scale… because that’s just the best way to build a career in accounting.

So when you ask your accountant Why? they tell you the only answer they know:

“This is how it’s done in my little corner of accounting.”

“That’s just how you have to do it.”

The correct answer to the question of Why? requires a broader view of the Zoom In <-> Zoom Out scale.

So…

Ask an accountant like me Why? and I’ll say:

1. Because Your Business Will Probably Fail

2. But… Doing it This Way Reduces the Likelihood of Failure

Point 1 is very simple — Most small businesses fail.

More than likely, you will be back working for someone else to pay off the debt you will have incurred in the failed effort.

Point 2 is much more interesting — Accounting decisions, made well, increase the likelihood of SUCCESS and decrease the likelihood of Failure.

This is simply true of every business decision you will make:

• Large decisions: Should I become an S-Corp this year? or an LLC?

• Small decisions: Should I spend for personal things just this once on my business card?

• Arcane decisions: Should I take the 179 deduction on the computer I just bought, or should I depreciate it some number of years?

Which that brings me back to EEW’s 4 Rules.

Why?

Well, now you know the answer:

1. Because Your Business Will Probably Fail

2. But… Doing it This Way Reduces the Likelihood of Failure

So let’s remember Everything Every Week’s Rules #1 - 4!

EEW Rule #1:

• Pay These Only 1 Time Per Week — yourself, your bills, and your taxes

I created Rule #1 so you will learn over time to think comfortably and strategically about your money, which reduces the likelihood of failure.

Moving your money properly each week gives you a feel for your numbers and reduces your anxiety about them, enabling you to think more strategically about how to grow and thrive.

EEW Rule #2:

• Open Two Accounts — one for Income, one for Expenses

I created Rule #2 because it will make it far easier to maintain your books, thus maximizing your bookkeeping accuracy at the lowest possible cost.

Great bookkeeping enables loans or investments for your business, it tells you when and how to change your business structure, and it makes taxes a low-cost snap.

EEW Rule #3:

• Three People You Never Lie To — the IRS, your Bookkeeper, and Yourself

I created Rule #3 because it will cause you to recognize and solve profitability problems earlier, and will recruit at least one advisor (your bookkeeper) to help prevent you from making reckless decisions.

Being radically honest forces profitability problems into the spotlight. Remember — your business issues are not to be blamed on Taxes. Those taxes were already there when you started this thing.

EEW Rule #4:

• Forward Your Receipts to Yourself

  • Digital Receipts —> Forward to yourself via email

  • Paper Receipts —> Snap a photo and send to your email

I created EEW Rule #4 because it’s the optimal balance of risk reduction in both directions… and it’s simple enough for anyone to do.

Following tax compliance reduces the risk of a disruptive audit or tax bill from the IRS. Being too rigid may increase your personal risk of business failure by paralyzing you.

Taken together, following the EEW Rules inevitably teaches you what the numbers in your bank account actually are:

A resource at your disposal, to be leveraged by you for growth… and never to be feared.

You cannot learn the power of this from a book, or this newsletter.

You learn how money works by moving it.

Do you get it?

Leave a comment

If you don’t, bookmark this post… and put a note on your calendar to come back in 3 months. Follow EEW’s rules perfectly until then.

Now do you get it?…

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Remember Everything Every Week’s Rules #1 - 4:

1. Pay These Only 1 Time Per Week: yourself, your bills, and your taxes

2. Open Two Accounts: one for Income, one for Expenses 

3. Three People You Never Lie To: the IRS, your Bookkeeper, and Yourself

4. Forward Your Receipts to Yourself:

   • Digital Receipts —> Forward to yourself via email

   • Paper Receipts —> Snap a photo and send to your email 

Holding to these simple rules will change your Sole Proprietorship. 

Once you adopt them, however, you’ll notice the impulse to break them… usually out of convenience.

By rejecting the impulse to break EEW Rules #1 - 4, you will improve where you are weakest in your financial operations.

Let’s get more concrete…

Impulse to break EEW Rule #1: 

You’ve already paid yourself this week, and spent your OPEX account down to near zero on paying planned business expenses.

You open an email from an important vendor… they are asking if you can pay their small invoice, because it was due ten days ago.

Feeling silly, you decide to transfer a tiny bit from your Income Account (which is full of new money your business earned over the past few days) over to your OPEX account, so you can pay the invoice.

😱😱😱😱😱!!

RULE #1 BROKEN

Remember: You’ve committed to pay your Expenses once per week. 

Same scenario, but following Rule #1: 

You email the vendor and apologize for your oversight of their invoice and explain that you will pay the invoice next week. 

And that’s it!

So what exactly does Rule #1 do for you, the Sole Prop, in this scenario?

A) It ties the consequences (in this case, embarrassment) more directly to your actions (poor expense planning)… thus increasing the likelihood that you’ll improve that action next time around (better planning!).

B) It causes you to pay bills on time, and look forward to doing it… because you will notice how much better that feels than sending your vendor an “I can’t pay you” email.

and lastly…

C) It gives you a clear opportunity to evaluate the true cost of the vendor’s services… and increases the ease with which you will adopt frugality in future vendor purchases. 

If you think you can succeed long-term as a Sole Proprietorship while breaking EEW Rules #1 - 4, you’re wrong. 

But you can learn to resist the urge. 

I’m reminded of a friend who was a professional Blackjack player. He counts cards — which gives him a very small statistical edge over the casino.

One tiny mistake means he loses that edge. 

I asked him about tipping the dealer (it’s 100% customary to tip dealers when you win hands in Blackjack). It seemed to me that doing so would hamper the statistical edge. 

“Yes,” he said, “When you’re a professional Blackjack player, you constantly feel the urge very strongly to tip the dealer… The solution to that problem is: resist the urge.”

That’s how you follow Rule #1.

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Everything Every Week Rule #4:

Forward your receipts to yourself. 

And forward them to yourself right away.

Doing that covers 80% of your tax compliance with 20% of the effort. 

How do I follow Rule #4 on the regular?

It’s super easy!

-Digitally Received Receipts —> Forward to yourself via email.

-Paper Receipts —> Snap a photo and email them to yourself. 

Don’t worry about: 

• Keeping paper copies

• Organizing receipts into specific files

• Writing a bunch notes

• Filling out forms that describe what’s in each receipt

• Downloading / paying for complex “smart” software to read receipts for you — you don’t need it

Again… Doing it exactly like this covers nearly 80% of your tax compliance, and requires 20% of the effort you’re used to.

As a Sole Prop, why do I need to follow Rule #4?

Rule #4 is about Tax Compliance.

Tax Compliance just means “following the rules” — specifically the IRS’s.

Now, the IRS has two kinds of compliance rules: those that govern your behavior, and those that prove your behavior.

We’ll call these Behavior Rules and Proof of Behavior Rules.

Some examples…

• Behavior Rule: Don’t try to call a personal expense a business expense.

• Proof of Behavior Rule: Keep receipts in order to prove you are not claiming personal expenses as business expenses.

The most important rules here are the Behavior Rules.

Why? Because a habit of breaking them will sink your business — even if the IRS never catches you.

The Proof of Behavior Rules are important, too…

But not doing sketchy things is more important.

Since you are already following EEW Rule #3 from last week’s newsletter, forwarding your receipts to your email will cover a large portion of your total tax compliance, while requiring a fraction of your previous efforts.

Okay, I’m about 80% in compliance… What about the other 20%?

It’s true — this forwarding scheme is not 100% in compliance with the IRS.

But keep in mind, Good Compliance is not the enemy of Perfect Compliance.

Forward your email receipt for Good Compliance.

Then you can then climb towards Perfect Compliance with two additional steps:

1. Reply to your forwarded email receipt — this will create a time-stamped thread.

2. In your reply, include a sentence like: “Paid to Jenny Smith for Marketing Campaign $1404.00.” That sentence includes a vendor (Jenny Smith, who you paid), a business purpose (Marketing), and the receipt’s value with a dollar sign and cents included. 

You now have a searchable receipt database in your email.

So start having Good Compliance today.

Snap a photo of that paper receipt, send it to yourself… and then throw it away!

Forward that digital email receipt to yourself right when it hits your inbox.

Then, when you have time, take those last two steps towards Perfect Compliance — reply to your forwarded email receipt with a simple sentence… one that includes Vendor, Business Purpose, and Value Amount. 

My clients forward or photo-and-send receipts to expenses@gilmoreconsultants.com (my consultancy). 

Try it, and I’ll send you back a nicely documented, contemporaneous record… so you can see how I help my clients step up into Perfect Compliance.

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Everything Every Week Rule #3:

Don’t lie to these 3, ever:

1. Yourself 

2. Your Accountant/Bookkeeper

3. The IRS

I’ll save the details of why you shouldn’t lie to Yourself or your Bookkeeper for a later post.

Here, I am going to explain why you must never lie to the IRS if you want your business to succeed.

And it is not what you’re thinking…

The reason isn’t well understood by most accountants.

Most accountants will say that you shouldn’t lie to the IRS. But if you listen carefully, most accountants are actually saying: “Don’t get caught lying to the IRS.” 

This is because most accountants are thinking of the risk of IRS-imposed penalties for tax fraud.

Do IRS penalties matter? Sure. But that’s the same type of advice as “Don’t break the speed limit because there are laws against it, which results in fines and criminal penalties.”

But the far more important reason you shouldn’t speed is that it is unsafe to do so. 

So what’s the real reason you shouldn’t lie to the IRS?

Lying to the IRS enables you to make bad business decisions without seeing the consequences in the short term, thus dooming your business in the long term.

Remember—the IRS taxes things that are GOOD for your business. So accruing taxes means you are doing the things successful businesses do.

All successful small businesses have a tax problem.

Rule #3 asks you to commit to being honest with the IRS because it’s bad for your business to do the types of things that make you want to lie to the IRS.

Honesty will improve your business behavior. It will clarify the true weaknesses in your business. And you won’t be tempted to blame the government for what are actually gaps in your business strategy or execution.  

Commit not to lie to the IRS and you’ll end up with more money from your business. 

That’s what Rule #3 is about. 

Many of you reading won’t take this rule as seriously as I believe you should. 

But very successful small businesses never break Rule #3.

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Everything Every Week Rule #1:

Pay yourself, pay your taxes, and pay your bills 1 time each week. 

1 time means ONCE.

No more, no less.

How does a Sole Prop like me follow Rule #1?

Pick a day of the week. This is payday.

On that day, send all the money in your INCOME account over to your OPEX account1.

Next: 

1. Pay Yourself: Take money out of your OPEX account and transfer it to a personal account.

2. Pay Your Taxes: Send money out of your OPEX account to a savings account that you’ll build up over time to pay for federal taxes.

3. Pay Your Business Bills: Leave enough in your OPEX to autopay any bills due in the next 7 days.

Do it all again next week. And the week after that.

The most important part of Rule #1 is not how much you send to where, but that you actually follow the rule.

If you follow Rule #1 and change any habits that hinder your ability to follow it, you will completely transform your business.

How much money do I transfer each week?

I tell my clients how much money goes where, each week, based on their prior week’s income. But you can figure that out really easily yourself.

The exact numbers aren’t half as important as the actual doing it part.

Actually doing it once a week, every week.

Following Rule #1—that’s what matters.

How do I know if I am breaking Rule #1?

You are breaking Rule #1…

• If you pay yourself more than once a week. You must live off the amount you paid yourself for one week. 

• If you purchase a personal coffee with your OPEX account. That is not a business expense, and you have then paid yourself twice in one week. 

What if I don’t want to follow Rule #1? Or what if I literally can’t do it?

If you are unwilling or truly unable to follow rule #1 beginning now, ask yourself what stands in your way? Understand: This is how your business is broken.

Make correcting that issue your top strategic priority, or go out of business.

Because if you’ve tried, and you really cannot possibly follow Rule #1—that means you don’t have a business. You have an expensive hobby.

So time to stop lying to yourself… which brings me to Rule #3, coming next week! 

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Everything Every Week Rule #2:

Use Two Separate Checking Accounts for Your Business.

One exclusively for receiving income.

And one exclusively for paying expenses.

Rule #2 has its origins in totally real ancient writings written over the centuries by merchants of yore (you may have seen another such passage in The Creation of Bookkeepers).

Rule #2’s deets are laid out in the following totally real verses:

And Your Business Shall Have 2 Checking Accounts

The first shall be named INCOME; and of it you shall say, “I will never spend money out of my INCOME account, because it is for INCOME to come IN to. That is why I have named it INCOME.”

Its debit card you shalt cut into pieces and scatter among the four corners of the earth, for never must you accidentally grab the wrong card at the gas station pump; and its checkbooks you shalt never order, for never will there be a justification to write a check from thine INCOME account.

The second account shall be called Operational Expenses, or OPEX for short; and of this account you shall say, “I never deposit money I earn into my OPEX account, because it is for my OPerating EXpenses to come out of. And that is why I named it OPEX.”

Its debit card you shalt preserve and keep always; and its checkbook you shalt in fact order, though rarely use… unless you are over 50.

In short: Use one bank account to receive all income and another to pay all expenses.

So, you will fill up your INCOME account with money earned, but will leave your OPEX account totally empty, because none of the money you earn ever lands there.

And how are you supposed to pay OPerational EXpenses for your business out of an empty OPEX account?

Great question! We will fill it up with Everything Every Week Rule #1, coming next week.

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Needing a talented bookkeeper is like needing a talented mechanic—it’s a sign that you’re already in trouble.

You might think you’re in trouble because talented mechanics, like talented bookkeepers, are very hard to find. And very expensive.

But that is a critical misdiagnosis of the real problem.

The real problem is not that it’s hard to find a good mechanic. 

The real problem is you are driving a car that’s hard to fix.

A complex car has parts that are unique and hard to find. It has an engine built in ways that prevent speedy repair. And if it’s a model that few mechanics are familiar with, it will be harder for just any mechanic to diagnose issues as they arise.

This makes it harder for them to accurately estimate the cost to fix anything… which makes it harder for you to price-compare. Or, in other words—to protect yourself from getting screwed.

As long as you’re driving this type of car, you’ll be saddled with high costs and low predictability.

Our car analogy breaks down at this point. Because, in reality, your business situation is even worse.

Of course, there’s an upside to driving an old Saab—it looks cool, it drives fun when it’s working. But there is no cool-looking, super-fun upside to keeping your books like this.

It’s just something you’re doing out of habit, not because of any sustainable benefit. 

The solution to your real problem is simple: Drive a Toyota.

Any competent mechanic can fix a Toyota, and any competent bookkeeper or accountant will be able to handle your Toyota-style books. 

And the good news is, no matter what you’re driving today, Everything Every Week will show you how to turn your books into Toyota-style books. 

So let’s work together and get you into that Toyota! You won’t have to spend crazy dollars on your bookkeeping, and you won’t grow dangerously reliant on “talented” bookkeepers. Instead, you’ll have predictability and low-cost maintenance. So you can focus more on where you’re going, not what you’re driving.

Next week: Learn the first rule for keeping your books simple.

Imagine a society where business as we understand it doesn’t exist.

A Merchant in this society is doing so well that he wants to expand, but he doesn’t have the money to do that. So he asks his Wealthy Friend to give him the money, to be paid back with interest.

The Wealthy Friend says: “Well, how will you spend the money?”

The Merchant tells him how he’ll spend it, and the Wealthy Friend agrees—that sounds great!—and so the loan is made.

But the Wealthy Friend also decides to check in on the Merchant every afternoon, showing up at his shop to make sure things are going as described.

Business being chaotic as it is, the Wealthy Friend gets suddenly nervous when things are not going exactly as they planned, and doesn’t quite understand why. So he starts telling the Merchant how to run his shop, and refuses to give him any more money if the Merchant rejects his ideas.

But the Wealthy Friend has bad ideas, and the Merchant knows they are BAD ideas.

However, the Merchant has no choice. He must partially follow the bad ideas, because he needs the money from his friend.

Now, a smarter ‘Wealthy Friend’ in the same scenario would realize after a few visits to the shop that his ideas will harm the Merchant’s business, and that his presence is not helping.

This Smart Wealthy Friend proposes a method of tracking the shop’s money in a way that makes sense to both him (as the lender) and the Merchant, while allowing the lender to stay out of the Merchant’s way.

So they check in on things a lot less frequently. But, the Merchant has a new secondary job: tracking the business in the way that he and his Smart Wealthy Friend have agreed.

This secondary job is a pretty complex one, and here’s why: the Merchant must translate his actual business into a representation of that business for the Smart Wealthy Friend, who doesn’t know how the actual business is actually working.

What results is a sort of map of the business—one that the Smart Wealthy Friend can refer to for directions, even though he will never visit the actual business which the map represents.

That is bookkeeping.

Make the map well, and you get access to Other People’s Money, while keeping their bad ideas far, far away.

Everything Every Week handles bookkeeping for sole proprietorships that are single-owner and have no employees. We give you everything you need and nothing you don’t, and tell you what to do with your money, every week.

Subscribe for access to free Q&A’s about your bookkeeping, or to join our weekly video chat Office Hours where other business owners sit down to get their books done.

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On Sunday, my friend was fretting about needing to come up with a bit more cash to cover her $100,000+ home renovation project.

While she worried that she didn’t have enough cash to cover the renovations, I noted unhelpfully that she’s not spending money—she’s just moving it from one pocket to another1.

What I mean is, this is not an EXPENSE. It’s an ASSET.

When she spends money on home improvement in a major real estate market like hers, she is not moving MONEY OUT of her personal finances. She is moving MONEY SIDEWAYS.

She’s moving money from one of her Pockets, which is CASH, to another of her Pockets, Which is HOME VALUE.

Later, my other friend was ashamed but excited to have spent $270 (+ shipping) to acquire an entire set of rare Pokemon Plush stuffed animals, all so she could get hold of the one “Eevee” plush that she wanted from the set.

I had to ask her a question to know whether this purchase of Eevee and friends was MONEY OUT or MONEY SIDEWAYS in her personal finances. In other words: Will the price of these plushies continue to rise or not?

She said that the price would certainly rise.

Since she is an expert on cute toys, and I know she knows her stuff, we can trust that this is true. That means she has moved MONEY SIDEWAYS. She has moved it from one Pocket, which is CASH, to another Pocket, which is POKEMON PLUSHIES.

The value of the money is still in one of her pockets. It is just in the form of Charizard and Eevee now. Since each of these plushies is worth an average of about $37.50, she can think of them as two cute, soft, pastel-colored $20 bills that take up a lot more space than $20 bills.

MONEY SIDEWAYS. Moving it from one of your pockets, like CASH, to another Pocket, like PLUSHIES.

In your business, this might be like buying a $2700 computer or a $1200 Barbering Chair. But it is also like moving $600 from one pile of spendable money to another, like from your Savings Account to your Checking Account, or from your Checking Account to your Credit Card Account.

Meanwhile, MONEY OUT is like moving money from one of your Pockets of spendable money to someone else’s Pocket—like from your Checking Account to theirs, in exchange for CANDY.

In your business, this might be like using your Credit Card to pay Google for clicks, or using your Checking Account to pay a copywriter to write for your client.

So when you do Everything Every Week, you do your bookkeeping not in order of date or of account, but in order of Money Flow—starting with MONEY SIDEWAYS.

DOING MONEY SIDEWAYS: Find the pockets that it moved between, and match them up.

Need help? Join my Weekly Office Hours along with other subscribers and Ask Me Anything!

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What day is it today?

It’s Wednesday.

Wednesdays have a feel.

It’s also the 3rd of a month.

3rds of the month don’t have a feel.

You do stuff on Saturday that you don’t do on other days.

You feel something about Tuesday and Friday that you don’t feel about the 4th and the 27th of each month.

When you’re scheduling a dental appointment and they propose the 17th, you have to translate that to usable terms: What day is the 17th? What day is today?

Today is only the 3rd on a paper calendar. In the real world — in the flow of traffic on the street outside, in your co-parenting schedule, in the school calendar, and in your business — it’s not the 3rd.

It’s Wednesday.

Because we live in weeks, not months.

But accountants live in months.

Accountants live in months because Banks live in months.

And Banks live in months because 14,0001 years ago, banks finalized their accounts MONTHLY instead of every 4 weeks or every 47 days or anything else. (Read more of my very accurate historical description of this in: The Creation of Bookkeeping.)

But your business lives in weeks, and you EAT TACOS ON TUESDAY, not the 20th. So you need to keep your books weekly and get your reports weekly and track your money weekly, if you want to succeed.

Subscribe to Everything Every Week to learn how to make this easy.

Fourteen thousand1 years ago, banks decided to double and triple check the balances of each of their accounts at some interval, just to make sure there were no mistakes. And they decided to do this MONTHLY. And they couldn’t do it weekly, because things were slower back then, and they couldn’t do it Quarterly, because that was too long of a time to let possible errors fly, and they didn’t do it every 4 weeks, or every 39 days, or every 22 days.

They did it monthly. 14,000 years ago.

And when they’d finalize those accounts monthly, the bankers would close the book that held the numbers showing how much of your money was held in those accounts, and would tie a little bow on it and say “That month is now CLOSED and the numbers in their are TRUE!” Meaning just that they had decided everything wrapped up with a bow was accurate.

And the bankers would then send their account holders a letter showing the TRUTH of how much was in their account: This is exactly what you had on the last day of last month in your account, the letter said.

And the bankers called this letter a MONTHLY BANK STATEMENT and it was available by MAIL or PDF DOWNLOAD.

And the people reading the MONTHLY STATEMENT they got from their bankers said, “But my own PERSONAL RECORD BOOK OF TRUTH says I should have MORE than your record book of truth says I have.”

And the people were much aggrieved about the discrepancy and they conferred one with another, saying, “who among us is a Numbers Guy?”

And there came forth a Numbers Guy2 and he said: “Give me the bank’s statement about their book of truth and give me YOUR book of what-you-call-truth, and I will discover and explain the reasons for the differences, and I will document those reasons, and thus shall the Bank’s perspective on truth and your own book of nonsense be RECONCILED.”

And the people were slightly offended by the implication that their own personal record book was not capital T Truth, so the Numbers Guy made it super super clear: “Sorry dudes, your own books are just a nice opinion until they are fully RECONCILED with the bank’s Book of Truth.”

And the people contemplated shooting the messenger for this, and for many other things that the Numbers Guy said to them, from then and forever more. And they called him Book Keeper.

And so was born MONTHLY RECONCILIATIONS, and for 14,000 Years bookkeepers and accountants told their clients that they were very important, and people wondered mostly what a monthly reconciliation even was.

And 14,000 years later, Quickbooks Online popularized a programmatic reconciliation process called BANK FEED that makes it possible to reconcile your personal book of nonsense with the Bank’s book of truth at PRETTY MUCH ANY INTERVAL, making the Monthly Cadence totally not necessary anymore.

And everyone kept doing it monthly, because that is how accountants and bookkeepers are, although also to be fair a fully functioning BANK FEED has only been good enough to use in this way for like 5 years which makes this younger than like, ZOOM.

But just like you shouldn’t be using SKYPE anymore, you shouldn’t be interrupting your business reporting and actual business cadence (which is WEEKLY) for a 14,000 year old habit that is MONTHLY.

And that’s why we do Everything Every Week.

Welcome to Everything Every Week, a newsletter for sole proprietorships who want to keep their books and keep their business.

1) Sign up for Everything Every Week and read it (every week, as you might have guessed!).

2) Do what I tell you every week and you’ll keep yourself in business.

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