“Behind Every Good Business is a Great Bookkeeper.”
Running and being successful in business is one thing, but bookkeeping is definitely a different story. If you are a small business owner and are just starting out on bookkeeping, don’t worry, there are great tips that can help you.
Aside from running your business, you also have to keep track of your finances. Bookkeeping is what helps a business keep track of its financial transactions. Tracking inventory, doing accounting for both sales and purchases, and also recording income and expenses.
Importance of Bookkeeping
Why should you learn how to Bookkeep?
As mentioned, bookkeeping will help you track your business’s financial well-being. Another good thing about bookkeeping is that it can help with record accuracy.
4 Beginner Bookkeeping Tips for Small Business Owners
Here are 4 easy tips that can help you kickstart your bookkeeping journey.
1. Choose a System for tracking
Choose a system for tracking that works for you. There are different systems for you to try out and see which one works best. Below is a list of tracking apps and tools for you to use.
- Excel Spreadsheet
- Software designed for bookkeeping.
Creating a system can help you organize everything and it will be easier for you to track your money.
2. Recording every Transaction is Crucial
You must know the financial state of your business. To do this, you must keep a record of all the information available.
- Sale’s date
- Buyer’s name
- Contact details
- Item or Service Sold
Sounds like a sales invoice, right? It’s because it is. Preparing a sales invoice can come in handy. You should also record every business-related purchase. Why keep records? It’s because you need to keep proof of purchase if you want to claim the expense as a tax deduction.
Bookkeeping also means reconciling your books. To reconcile your books, you have to constantly check every business transaction you have on your bank statements. This is to make sure that the numbers all match.
If it so happens that the numbers don’t match, it is most likely because of discrepancies which are usually caused by bank fees, interest payments, deposits, and payments that have not reached your account.
Reconciliation is done daily, weekly, or monthly.
4. Make Your Financial Statements
If you are finished reconciling your books and the necessary adjustments have been dealt with, it is time for you to make your financial statements.
A basic financial statement has the following:
- Income Statment
- Includes both your income and expenses that will tell you if your company is earning or losing money.
- Cash-flow statement
- A cash-flow statement shows how much money is coming in and going out.
- Balance Sheet
- A balance sheet shows the summary of all your assets, liabilities, and also equity.
These are just a few tips that can get you started with bookkeeping but it’s there’s always a first for everything. Bookkeeping is not an easy process but it sure does protect your business.
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