A 5-Step Bookkeeping Guide for Beginners

1. A5-StepBookkeepingGuide forBeginners Bookkeepingisone ofthemost tiresome tasksinbusinessoperations.Nomatterhow muchyou tryto avoidit, youwillneedtoaddressit ontime.Otherwise,ignoring accounting andbookkeepingcouldlead youinto legaland financialtrouble. Areyouanewbusinessownerand havenoideawhat bookkeepingis?Don’tworry; herewegiveyoua6-step bookkeeping guide thatwilltellyouall youneedtoknow about itandhowto take careofyourbooksinthebest waypossible. Whatisbookkeeping? Bookkeepingmeanskeeping recordsofallyourbusinesstransactions,such as accountspayable/receivable,banktransactions,accountledgers,balancesheets, etc. Bookkeepingultimatelytellsyouhowyourbusiness is performing in terms of profit/loss. Many new business owners make the mistake of taking their bookkeeping for granted. They think that there are very few business transactions to look after. Hence they can do it themselves or lettheirbackofficeadminhandlethejob.

2. However,accountingandbookkeepingisverycomplex.Inthewronghands,itcould leadtoabusinessbacklash.Hence,itmustonlybedonebyprofessionals.Doing it yourselforletting yourbackofficeadmindoitmaycostyou moreintheform ofyour timeandresources. • Havingtherightsetsofhandstakingcareofyourbookswouldensureaccuraterecords ofyourbusinessandgiveyouinsightsonhowtogrow yourbusinesstoits maximum potential. • However,therearestillsomethingsthat you should knowabout bookkeeping asa businessowner.Here wegiveyoua6-stepbookkeepingguidetogetyoustarted: • The5-StepBookkeepingGuide • Thebeginning • Bookkeepingisrelatively straightforwardinthebeginning.Youneedtokeepaccurate recordsofallyourbusinesstransactions.Keepthesetypesoftransactionsin mindif you don’t know what you’re supposed to do; sales records, purchase records, accounts payable,accountsreceivable, bank records,cashtransactionrecords,payroll, etc. • Tomake processeseasier,youcan utilizethe following: • AccountingBook:Theaccountingbookis preciselywhatitsounds like.Writing downyourbusiness transactionsin accounting booksissomething thatwerarely see nowadays. Buteventhoughit’snota greatchoice,youcouldutilize it ifyour businesshas veryfewtransactions. • Spreadsheets:Spreadsheetsareagreatwaytoorganizeyourbusiness transactionswithconditional formatting.Someofitsfilterscanhelpyouagreat deal withcalculations,etc. • AccountingSoftware:Automationtoolslikebookkeepingsoftwarecansimplify yourbookkeepingprocessagreat deal.Itcan makeprocesseslikesales invoices,purchaseinvoices,andreceiptsmuchsimplerandeasier. • Bookkeepingvs.Accounting • Bookkeepingandaccounting aredifferent. As abeginner,itisessentialtounderstand the differencebetween them.Otherwise,you maygetconfusedbetweenaccounting andbookkeeping tasks. • Bookkeeping: Bookkeepingsimplymeans to keeprecordsofallyourbusiness transactionsinanorganizedmanner,forexample,yourbusiness’s financialdata like banktransactions,cashtransactions,etc.

3. Accounting:Accounting,ingeneral,is totakecare ofyourbusiness’saccounts and makesure yourbusinesscomplieswiththelaw.Accounting alsoincludes takingcare oftaxes. • BranchesofBookkeeping • Now that we’ve understood what bookkeeping is, it’s time to understand what it consists of. Aswementioned,bookkeeping meanstokeeprecordsofallyour business • transactions.Now,let’sdivedeeperandtalk aboutwhattypesoffinancialrecords it includes: • Cashtransactions:Oneofthebasicsofrunningyourbusinessistokeeptrack of how much money you’re making and how much you’re spending. Bookkeeping includesmaintainingrecordsofallyourcashtransactions. • Accountspayable/receivable:Speakingofcashtransactions,businessesneed to maintaincash flow, whichwillonlybepossibleiftheykeeptheir accounts payableandreceivableup-to-dateandaccurate. • Stockinventory:Inthecase ofproduct-basedbusinesses,keepingyourstock recordsalignedwiththephysicalstock presentisalso a partofbookkeeping. • Loanspayable:Businessesaren’tjustabout profitsandassets;youalso need tokeeprecordsofyourliabilities, suchas loanspayable,whenthey’redue,etc. • Salesrecords:Keeping salesrecords,suchasinvoices,productspecifications, etc., is one of the fundamentals of bookkeeping. It’s a highly crucial part of bookkeeping. • Purchaserecords: Along withkeepingaccuratesalesrecords,it’salsoessential tokeep up-to-date purchaserecords,whichhelpswithstockinventoryand accounts payable. • Payroll:Payingyouremployeestheir salaries/wagesisalso apartof bookkeeping.Thingslikemaking sure you’re notunder– or –overpaying them andtimelypayroll areverycrucial. • Invaluable bookkeepingtips • Bookkeeping,in thebeginning,seemslikea fairlysimpleprocess. But, asyougo further insideit,itstartstoseemlikechaos. Hence, we’regivingyou some pointersthat’ll help you keep yourhead onyourshoulders: • Avoid last-minute woes: Yes, the tax season is still months away, but don’t leaveeverythingtothe lastminute!Last-minutehurriescanlead toinaccuracies, which areextremelybad. • Keep ’emorganized:Keeping records ofyourbusinesstransactionsis onlyone part ofbookkeeping.Youalsoneedtokeepthem organized sothatthey’re available inthehourofneed. • Sayyestoreceipts:ALWAYS keepreceiptsforyourbusinessexpenses. Receiptsmake it alotsimplertoclaimtaxdeductions.

4. Don’t letbusinessandpersonal finances mingle:Don’t make the rookie mistakeof notkeepingyourbusinessandpersonal financesseparate,evenifyourbusinessisnew andhasfewer transactions. Keepthem separate. 5.Tryoutsourcedaccounting Ifyouthinkthathiring anaccountantisexpensive,thinkagain.Whatifwetoldyouyou couldgetavirtualbookkeeperforascheap as$9/hour? It’sworthatry.Youcanuseoutsourcedaccountingservicesforyourtiniest tasks andpayonlyfor thoselittle tasks. Tell youwhat;letusgiveyoua free 5-hourtrial!KeyCarrierAccountinghasoneof themost experienced staffinaccounting&bookkeepingservices.Getintouchwith us ifthatinterestsyou.