How To Create a Financial System to Support The Money Side of Your Creative Business

The Systems Series

Welcome to the second blog in our 6-blog series all about systems in your creative business. Each week we’ll dig into a different system and the specific software and SOPs you can implement to bring efficiency and consistency into all aspects of your business. In this post, we’re talking all about your business’s financial system. In the next 4 posts, I’ll also help you create systems for your marketing, sales, project management, and file and asset management & organization. This is a sister series that goes hand-in-hand with my previous Rhythms Series.

Check it out here. 

Are your business finances feeling a little…neglected these days?

It’s totally understandable. 

After all, you started a CREATIVE business, not an accounting firm or a tax prep agency. 

Your zone of genius may not exactly involve balancing your books, keeping up with client payments, or filing your taxes!

It’s probably really easy to get caught up in the essential day-to-day pieces of your business (especially the ones you enjoy) like creating products, finalizing client deliverables, or marketing to prospects. 

And as a result, your finances can easily fall by the wayside. 

That is… until you find yourself scrambling at the end of the month (or worse yet at the end of the year) trying to sort through the chaos!

But no matter if your business numbers feel like a friend or a foe, at the end of the day, being a creative entrepreneur means wearing a lot of hats– even the ones you don’t enjoy wearing. So, while you don’t need to go back to school to be a CPA, you DO need to put a sustainable and practical financial system in place to help you manage your money. 

Because the truth of the matter is… you need to earn money (and KEEP IT) to be in business– otherwise, you’re just pouring your time and energy into a very expensive hobby!

Don’t panic– it’s not as hard as it sounds.

And in fact, you may be pleasantly surprised once you get a grip of your finances!

Case Study

Take my client John, who finally set up his financial systems after 4+ years in business! He’d avoided tracking his money for so long and built it up in his mind as this overwhelming, negative task. 

He expected the worst (literally– I think he looked at that initial tracking spreadsheet through squinted eyes, like a kid shielding their eyes from a scary horror movie scene), but he was VERY pleasantly surprised once he got started. 

He found out he was actually closer to his goals than he thought and now he had the information he needed to hit his year-end goals the following month!

Now, this isn’t to say confronting your business finances will always lead to a positive discovery. 

In fact, sometimes it may bring up some concerns. 

However, it is ALWAYS best to move forward with eyes wide open so you can do something to fix the problem, rather than be ignorant to the issue and dig yourself deeper into a hole!

The goal is to be an active participant in all aspects of your business. And once you have the FACTS in front of you, you can make informed choices that will ensure the profitability and sustainability of the business you love moving forward. 

Let me break it all down for you! 

In this blog, you will learn what a financial system is, why you need them, the importance of profitability and cash flow, the software options you should consider to support your financial systems, and the Standard Operating Procedures (SOPs) you can build out as you bring consistency into your money-related system.

I hope you walk away from this article feeling less intimidated by your finances and empowered by the potential of financial systems so you can start embracing them as the powerful, supportive tools they are!

What exactly is a financial system and why do you need one?

The purpose of your financial system is to monitor and manage the important finances in your business. Your system can and should cover anything that has to do with money, how you collect it, allocate it, and spend it. 

To be a successful business owner, you need to know your numbers such as: 

  • Revenue – the total money your business is bringing in BEFORE expenses.
  • Profit – the total amount of money you actually make after costs (a.k.a. cash in your pocket).
  • Expenses – the total money going out of your business. Add up anything your company pays for to get this number!
  • Cash Flow – the total money flowing both in and out of your business
  • and more.

Unfortunately, too many business owners shy away from these confusing terms, and therefore don’t really have a handle on their business finances!


“Small businesses live and die by their cash flow.” 

But the bigger problem is, 

“These same businesses consider cash flow one of their top 5 challenges.”

I don’t say this to scare you, but to make you aware of a pervasive problem, especially for small businesses!

Usually, these cash flow issues happen simply because business owners are too intimidated by the financial pieces of their business!

The good news is, it doesn’t have to be this way!

How to start creating your financial system

Even if you start with a simple spreadsheet, the most important thing you can do– 

Just begin! 

Seriously, a basic spreadsheet in Google Docs or Excel can be such a great tool.

Here’s what you’ll want to start documenting and tracking in your creative business:

  • Track Your Sales and Revenue (a.k.a. money coming in – both owed to you and received)
  • Track Your Expenses (a.k.a money going out)

This information will give you a general sense of your profitability and cash flow.

As you just learned, cash flow is the flow of money coming into and going out of your business over time. It can be positive or negative. 

  • Positive cash flow means you have more cash coming into your business than going out.
  • Negative cash flow means you have more cash going out of your business than coming in (hint: this may be a red flag).

What to consider as your business grows

These two tracking tools are literally ALL you need to get started. 

However, once you feel you have a solid system in place to track these financial aspects of your business, you can layer in software and SOPs to make your work more efficient. 

Accounting Software

As you grow you may consider upgrading to accounting software. 

Accounting software will give you a fuller picture of your finances beyond a basic spreadsheet. It will allow you to run reports and analyze trends. Those reports and trends might seem scary at first, but I promise they’ll become one of your favorite tools if you take the time to get to know them.

As you explore your new accounting software, these are a few reports you can start to play around with as you get familiar. These reports offer great insight into the financial health and viability of your business. Plus, they are great at showing trends!

Reports to get familiar with:

  • Balance Sheet This is a snapshot of your company’s financial condition (including everything from your assets to liabilities)

  • Profit and Loss Statement (often called P&L). This will let you see, at a glance, whether your business is profitable at any given time.

  • Accounts Receivable Aging Summary (or A/R). This will show you who owes you money by listing all outstanding invoices, including the amount, if they are overdue, and by how long.

  • Statement of Cash Flows will show you what’s happening with your cash as it’s coming in and going out.

As you decide which accounting software to use, know that there are SO many software options out there that can help you manage your business finances. And remember: consult with your accountant as you choose your software.

I’ll say it again to be clear: 

When you are just starting, keep it simple.

I’ve collected several options for you to consider as you’re establishing your systems and deciding which software you’ll use to support your financial needs.

When you’re ready to invest in Accounting Software check out:



→ or Xero

* I’ve found this works best for me and many of my clients.

COO TIP: You may even use a combination of a basic system and accounting software. That’s actually what I do! My accountant has me use QuickBooks but even so, I still keep a simple Google Sheet to see a quick snapshot of my numbers without having to log in and wade through everything. This may feel like overkill for you, but for me, it’s a nice “checks and balances” system. You have to explore what works for YOU and then stick to that system!


Once you have a plan for tracking your business sales, revenue, and expenses it’s time to put Standard Operating Procedures (SOPs) in place. 

As you likely remember from our 3 S’s blog, SOPs dictate:

  • how and where tasks are completed
  • by who
  • when they occur
  • and what triggers an action

The goal of your financial SOPs will be to ensure efficiency, consistency, and accuracy so you can feel confident in your business numbers! 

Here are some SOPs to Consider:

→ Recording sales

When you make a sale…what happens? Your SOP in this situation should cover:

  • how the funds are accounted for
  • how and where they are deposited
  • where they are recorded. 

It may also include things you need to report like sales tax and anything else that needs to happen on the financial side of things when money comes INTO your business through your sales.

→ Recording expenses

Similarly, you’ll probably need to create an SOP around money going OUT of your business and how you record your expenses. 

  • Where do you log this? 
  • Do you need a receipt? If so, where is it filed? How is it organized? 
  • Are your expenses categorized? 
  • What does your accountant need from you come tax time to properly report your expenses? 
  • How are your accounts reconciled? 

You get the point

For something as simple as a payment, there are a lot of little checks and balances you should have in place to ensure you are tracking and managing your business finances properly.

Some other SOPs that might follow include:

→ Running reports

These will be specific to your software and which reports you find most helpful and insightful! You’ll likely have to account for anything your accountant provides OR needs in this process as well!

→ Banking processes

Where is all your money going in and out of? Do you need to manage multiple accounts? Move money from one account to another? Manage your cash flow to ensure all your money is in the right places.

→ Taking payments

If you take payments in more than one way, make sure you have an SOP for each one! Receiving a paper check and the process will likely look different (and it should!) from when you receive a payment through Stripe, Square, PayPal, or even cash!

→ Making payments

Will you use automatic or manual payments? How are you tracking to make sure the funds are actually pulled from your account? You may also need to set reminders to make future payments or check on auto payments.

COO Tip: Remember, your SOPs should be uber-detailed directions that specify precisely how these processes should be done so that you don’t have to reinvent the wheel every time you update your finances AND you have the option to hand these money tasks over to a team member, bookkeeper, or accountant in the future without skipping a beat if and when you choose to! Your systems, especially your FINANCIAL systems, are not the time to be vague and loose!

Get Started!

Now it’s time for YOU to get cozy with your business’s finances and start building out an effective, sustainable system! 

Remember, it doesn’t have to be perfect right away– you just have to begin! You can refine and improve your system over time as you gather more information and get in touch with your business’s true financial needs.

Once you have your financial system in place in a way that works for you, you’ll want to make sure you’re keeping up with these tasks regularly and consistently. 

Financial Rhythms: The Finishing Touch

That’s where business rhythms come into play!

Financial Rhythms support your Financial System. They go hand in hand.

Finances involve more than one rhythm. I think of these rhythms like a Russian Nesting Doll:

  • The DAILY and WEEKLY rhythms are the smallest, but they are at the core of everything else. 

  • MONTHLY and QUARTERLY rhythms make your process more robust and structured while allowing you to track and respond to patterns.

  • Finally, the ANNUAL rhythms are all about the big picture and the final product (what you observe on the outside).

Each of these different rhythms makes up a financially sound business that runs like a well-oiled machine. Taking the time to create these rhythms will put you at ease so that you can feel confident about the money your business has flowing in and out regularly. 

This is the key to financial success.

You can learn all about how to implement financial rhythms to support your money system in this blog post that will give you the essentials you need to get started!

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