How To Get Started On Bookkeeping For Your Small Business

OK, you’ve started your business. You will have cash receipts, otherwise known as income (someday), and you already have cash disbursements or expenses. You need a system to keep track of all of your transactions- it’s called an accounting system.

Now we all know that it would be much better if you could just hire a bookkeeper to do all this accounting, but you’re just starting out and don’t feel you can afford to hire one. Besides, it’s hard to find a good bookkeeper. They are notorious for saying they can do more than they are capable of, then proceeding to make a mess of the books of the unsuspecting small business owner. So we’re going to have to struggle along without one for now.

Although it would be better if you could spend all of your time doing whatever it is you do best, you’re going to be doing the accounting until you can afford to hire a bookkeeper. Besides, you never want to put yourself or your business in the position that you are so dependent on another person to do your accounting, that you have no idea what they are doing. By taking responsibility from the start for your own accounting you will be in a better position in the future to review the work of others in a short period of time each week (or day) and know whether or not it was done properly.

Things to Buy:

There are a few things that you’ll have to buy to accomplish the setting up of your accounting system. You’ll need the most recent QuickBooks accounting program. Of course, you’ll need a computer to go with that. You must check the QuickBooks specification requirements for the computer system and make sure that your computer will meet the minimum specification requirements, such as, have enough ram memory, for example.

Yes, there are many other accounting programs out there. But QuickBooks is the easiest, most user friendly accounting software in existence today. QuickBooks also generates many different types of reports, which is the whole purpose of doing your bookkeeping- so you can generate accurate reports showing your financial situation and the history of your transactions. QuickBooks does have its problems- for example, it does not provide a good audit trail, that is, after you have recorded transactions, reconciled the bank account and even closed the books, you can always go back and change things. This is not good, because then you may not be able to trace the transaction (hence the lack of audit trail.) However, if you follow the procedures set out in this book and discipline yourself not to stray, you will not get in trouble. And don’t be cheap and try to save money by buying Quicken. Quicken is useless for businesses because it does not generate many of the reports you will need, like a balance sheet.