LET’S GET STARTED
- 1 What is Bookkeeping?
- 2 What’s the Difference between an Accountant and a Bookkeeper?
- 3 Why Does Bookkeeping Matter?
- 4 It’s Required During Tax Time
- 5 You’ll Want to Know Where Your Money is Going
- 6 Bookkeeping is Needed to Borrow Money and Obtain Financing
- 7 It Ensures Not Missing Out on Tax Deductions
- 8 The Importance of Catching Errors Long Before It’s Too late
- 9 Bookkeeping Basics: The Accounts You Should Know
- 10 Asset=Liabilities +Equity
- 11 How to Handle Bookkeeping for Your Small Business
- 12 Keep your Business and Personal Expenses Separate
- 13 Choosing a Bookkeeping System That is Right for your Business
- 14 Chose an Accounting Method: Cash or Accrual
- 15 Categorize Transactions Accordingly
- 16 Store All of Your Expense Receipts in One Place
- 17 Reconcile your Bank Account
- 18 Close the Month and Run Financial Statements
- 19 Organize your Tax Deductions
- 20 Accounting Software for Bookkeeping: It is Really Necessary?
- 21 Wrapping Up the Bookkeeping Basics
Another plus of maintaining accurate books is that every transaction will be recorded and categorized for your CPA. That is important because if you can provide accurate information and supporting documents to your CPA on April 15, you may be able to claim additional deductions and possibly secure a larger tax return. Also, if you can maintain well-kept books, you can provide lenders or investors a complete view of your company’s financial status. Then, they will be able to make financial projections about your company’s ability to pay back a loan.
What is Bookkeeping?
What’s the Difference between an Accountant and a Bookkeeper?
Why Does Bookkeeping Matter?
It’s Required During Tax Time
You’ll Want to Know Where Your Money is Going
Bookkeeping is Needed to Borrow Money and Obtain Financing
It Ensures Not Missing Out on Tax Deductions
The Importance of Catching Errors Long Before It’s Too late
Bookkeeping Basics: The Accounts You Should Know
- Assets. Anything of value in your business is considered an asset including cash held in bank accounts, accounts receivable (A/R), balance (money that clients owe you), inventory, computers and furniture.
- Liabilities. Debts owed by your company to vendors or banks are considered liabilities including your accounts payable (A/P) balance and loans.
- Revenue/Income. Revenue or income refers to monies earned by your firm by selling products or rendering services.
- Business Expenses. Generally, it refers to the cost of goods sold and includes a long list of items such rent, internet, the utility bills, employees’ salaries, truck loan payments, etc.
- Equity. Subtracting business liabilities from business assets equals equity, which reflects your financial interest in the firm.
How to Handle Bookkeeping for Your Small Business
Keep your Business and Personal Expenses Separate
Choosing a Bookkeeping System That is Right for your Business
Chose an Accounting Method: Cash or Accrual
Categorize Transactions Accordingly
Store All of Your Expense Receipts in One Place
Reconcile your Bank Account
Close the Month and Run Financial Statements
Organize your Tax Deductions
Accounting for tax purposes one of the most important reasons for accurate bookkeeping. Whether your business is a sole proprietorship, partnership or corporation, you must file an income tax return and pay income taxes. Most entrepreneurs understand that deductible expenses help to offset many of the costs of running a business. But not every expenditure is fully tax deductible. Understanding which expenses can effectively reduce your taxable income will not only help you estimate your tax obligation for the coming year, it will also improve your business planning. Eligible expenses also tend to change from time to time, as IRS tax regulations evolve. The IRS has compiled a comprehensive guide of business deductions.