Bookkeeping, necessary evil

Bookkeeping seems to be a never ending task.  There is always another invoice to generate, bill to pay and receipt to track.  On one hand this is a good thing because it means your are still in business. On the other hand it means far more office work for you.  You may dread this back office work but let us consider the Why, What, When and How of bookkeeping.  With a little patience and thought you can make your bookkeeping task much less daunting.  

Why bookkeeping?

• Allows you to monitor the progress of your business
• Helps you prepare your financial statements
• Identifies sources of income 
• Keeps track of expenses
• Tracks your business property
• Assist in preparing your business tax return
• Fulfills burden of proof (you must be able to prove certain elements of expenses to deduct them on your tax return)

What is bookkeeping?

• Gathering and organizing information from business transactions

When to do bookkeeping?

• Every day (take 15 minutes and keep it current)

How to keep up the books?

• Know the basics
  • Learn how double-entry bookkeeping works (both sides are equal)
  • Understand your chart of accounts (categories)
  • Know how to read your reports (financial statements)
• Choose a software application and USE IT!
  • WaveApps
  • Xero
  • Quickbooks Online
  • Gusto Payroll
  • Bill.com
• Ask questions
  • If you do not understand something in your books, ask.  As the owner it is your responsibility to know how your business works.
• Get help when you need it
  • When you need some extra help, get it

Bookkeeping may not be the most exciting task you do each day, but if you keep it current the information will change your life.

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