Basic Bookkeeping Tips

The choice of starting a business is daunting decision. When you first start out, you spend all your time getting business and generating revenue. Bookkeeping is so far down on the list that sometimes it’s practically hanging off the list.

Here are some tips that help keep you afloat.

Get a computer or tablet

A computerized system makes bookkeeping a LOT EASIER. In order to track your income & expense and create financial statements, a computerized system will help a lot. It will also help with your tax preparation. If you need a refresher course on how to use a computer or software, most technical colleges have continuing education classes for less than $150/class.

Use the right accounting system

If you aren’t familiar with this, then it’s a good thing you are here. Your accounting system choices are CASH BASIS or ACCURAL BASIS. Cash basis is the more commonly used method. However, the type of business you are conducting may dictate which method is a better fit.

Get a business bank account

Keeping separate bank accounts for your business and personal funds will be so much easier for you. It becomes very confusing moving/using money from your personal accounts to handle business transactions and vice versa. Most business accounts need federal identification and other governmental documentation. Check with your financial institution regarding the requirements.

Keep daily records

Using your memory is not a good tool to use. If you don’t keep ACCURATE daily records, you won’t be able to produce accurate financial statement. If you can’t produce accurate financial statements, then you won’t know how healthy your business is. However which ever system you are comfortable with keeping is up to you. I HIGHLY encourage spending at least 30 minutes a day making sure your records up to date.

Create a trail of transactions

If you are using invoices and checks, be sure to not skip numbers. It doesn’t matter what number (or alpha-numerical) system you use, as long as you can track that document from start to finish. Also, when possible, use your debit/credit card for any business transactions. This will help with keeping a daily record in case you are prone to losing receipts. See below for additional assistance.

Review your bank account daily

You need your money in your account. However, it’s really easy to let this task fall by the wayside when you are dealing with the day to day tasks of generating revenue. The bank will not be responsible if something goes awry with your account. Cancelled or stale dated are some common issues for bank account. As a good rule, sign checks that are clear but discourages forgery.

Reconcile your bank statement

If you don’t hire a bookkeeper, be sure to reconcile your bank account(s) on a monthly basis. Reconciling will help discover discrepancies. It will also allow you take a look at where your money is going.

As mentioned above, if you are prone to losing receipts, there are free systems that will allow you keep your records tidy. Check out Dropbox.com at Dropbox.com . I can take a picture of my receipt and send it to my Dropbox. When I need it, it’s just a few clicks away. Sign up today and get 2GB of space

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