Accounting in 5 Easy Steps!
Thinking about starting your own business but scared of the daunting task of bookkeeping? Accounting can be very challenging for some entrepreneurs and might be the only roadblock between you and a successful company. Fear no longer, this quick guide will help get your bookkeeping started.
1.Invest in an accounting software. Sure you could keep your books by hand or in a spreadsheet but that leaves too much room for error. Make it easy on yourself and sign up for an online accounting software such as QuickBooks Self-Employed; they’re not expensive and will pay off in the long run. By using software, you can keep organized and even set up monthly reminders.
2.Learn the accounting basics. Get to know the accounting formula of Assets = Liabilities + Owner’s Equity. When you understand this, you can start to figure out how a balance sheet is created for your business. Likewise, get familiar with an Income Statement and how your revenues and expenses are recorded. Understanding these accounting basics, will help out when it comes to making sense of your accounts.
3.Debits and Credits. We don’t mean your debit or credit card but rather the way items are entered in accounting. Debits increase your assets and expenses, whereas Credits increase your liabilities, owner’s equity, and revenues. This is helpful to know when you enter a bill because you can understand how it is increasing your liabilities account.
4.Chart of Accounts. It’s important to know what accounts you will be needing for your business. This could be a tools & equipment asset for a contractor, or a supplies expense account to allocate for each hair coloring you provide. Accounts can be added as you go, but you should start with a basic understanding of what accounts your business will need.
5.Bookkeeping. Now that you have a basic understanding and software to coach you through it, it’s time to start bookkeeping. This includes recording bills as they come in, creating an invoice off of a quote, recording charges on your company credit card, etc. This may seem like a lot but if you have done steps 1-4 it shouldn’t be too challenging. You can now run your business and have it all documented in your books.
1.Choose ALOEwerx. If these steps still seem like too much work or that it might be over your head, you’re in luck. Instead of learning all of this stuff, ALOEwerx will do your accounting for you. We provide a CPA, bookkeeper, and accountant for every client to allow you to do what you love and let us handle the dirty work. We are truly a painless accounting service so you don’t have to feel any pain.