Bookkeeping in Six steps Part 1

What is Bookkeeping?

Bookkeeping is the systematic daily process of recording, categorizing, and summarizing a business's financial transactions.

builds a solid foundation for business growth by maintaining organized and accurate financial records. It can help you make informed business decisions.   

It's more than just a way to stay organized, it can help you save money, make money, and make good decisions.

Many owners dread this responsibility, but it is a vital part of owning a business.

Benefits of Bookkeeping

1) Better decision-making

2) Improved cash flow

3) Make life easier for tax time

4) Help business budget

5) Stay organized by tracking income and expenses

6) Legal compliance

7) Financial health and planning including Profit and Loss and Balance Sheet

8) Reconciliation

9) Saves time

The first step in bookkeeping is to gather all financial records or sources.  It is important to collect all bank statements, credit card statements, invoices, receipts, cash transactions, and bills issued to the business

The second step is to categorize transactions.  Each transaction needs to be put in the right place:  Assets, Liabilities, Expenses, Revenue/Sales, and Owner's Equity.

We suggest QuickBooks Online.  This program works great for us.

The third step is reconciling your accounts.  You need to make sure that your reports will be accurate and complete.  Make sure your bank statements match your accounting balance.  When balanced, everything is good.  When not balanced, you need to make sure that every transaction was accounted for to determine if any discrepancies between your statements and what is being recorded in the books.

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