Bookkeeping and Accounting for Your Small Business: Understand the Basics to Start Saving
- September 7, 2021
- Posted by: BenG-Admin
- Category: Blog, Bookkeeping, Taxes
In this blog post, we will cover some of the basics of Bookkeeping and Accounting for your small business. Bookkeeping is a process that helps you track income and expenses to ensure you are generating a profit at the end of the day. It can be difficult to keep up with these tasks on your own, but not impossible! With this blog-post as a starting point, you’ll be able to confidently do everything from balancing your books to filing taxes on time.
Bookkeeping and Accounting Basics
Bookkeeping is a process that helps you track income and expenses to ensure you are generating a profit at the end of the day. It can be difficult to keep up with these tasks on your own, but not impossible! With this blog-post as a starting point, you’ll be able to confidently do everything from balancing your books to filing taxes on time.
What’s in an Income Statement?
An income statement shows how much money has come into or gone out of your business over a set amount of time (monthly, quarterly, etc.).
When it comes down to it there are two types:
Revenue – Money coming into your business Expenses – Money going out of your business By looking at both sides we get a clear picture of the health and profitability of your business.
How do I go about Bookkeeping? Bookkeeping is a way to show where all that money has gone – by recording every transaction, whether it’s cash or credit.
There are two main types of bookkeeping:
Cash-based Bookkeeping : Track income received in cash as well as expenses paid with cash Posting Method – Each entry represents one source record (cash receipt) and one use records (cash payment).
Accrual-Based Bookkeeping : This type tracks transactions regardless if they’re for an expense paid via cash or charge card. It also includes revenue even if its not deposited into the bank account yet! This method uses temporary accounts called “Creditors” and “Receivables” to track the income and expenses related to a specific period of time.
– Bookkeeping Software
Accounting software is designed specifically for bookkeepers, accountants or small business owners. It facilitates day-to-day tasks such as creating invoices, tracking accounts payable & receivable, budgeting finances and more! If you’re just starting out in your career – this type of software can help you get started with better understanding how accounting works by allowing you access to an online database where all transactions are automatically recorded when completed! Quick Books is a great example that allows users to take advantage of an easy user interface while also having unlimited support from qualified staff anytime during working hours (24/7). Bookkeeping and accounting is a vital component of every day business operations. Whether you’re just starting out or have been in the industry for decades, it’s important to understand your financial information because when done correctly, it helps small businesses save money by putting them in better control of their finances & resources! With bookkeeping software like Quick Books, makes this process easier for business owners, by allowing users access to an online database where all transactions are automatically recorded and completed! Not only does this allow Quick Books to track expenses (and other transactions), but it also offers Bookkeepers and Accountants the opportunity to quickly track down where certain monies are being spent. This is great for tax time, or if you ever need a record of your financial history!
Bookkeeping Services Help Prevent Costly Mistakes
Bookkeeping services can save you time and money, as well as reduce the risk of making costly mistakes. If a business fails to accurately record its income and expenses on paper or in a computerized system, it may not be able to pay taxes owed at year-end or avoid fines from tax authorities for filing inaccurate information about taxable incomes. In addition bookkeepers help businesses ensure that their books reflect bank balances correctly so they don’t lose access to any funds held by financial institutions until checks clear.
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