11/12/2009

Bookkeeping Tips by Guest Blogger Holly of The Accounting Spot

Bookkeeping is such an important task for a business to maintain. To fully know and understand your income and expenses (and the difference between the two!), allows you as a business owner to make better business decisions. Plus, when maintained properly, tax time is a breeze because you already have the information in a usable format.

I want to really drive home the point the keeping your financial information accurate and up-to-date is first and foremost done for you as a business owner. Many owners do their bookkeeping 'for' the tax man. This is backwards. You do your bookkeeping for YOU and as a result, can easily share the required info with the tax man.


So, the big questions HOW does one go about this? 1) Round-up (transaction info), 2) Organize, 3) Report. Let's look at each of these steps a little closer:

1) Round-up
In order to create accurate reports you need to be sure you are working will all the necessary information. You need to print, download, and otherwise round-up any data related to the business. Paper receipts, sales reports, manual invoices, Etsy (or Ebay or any selling venue) downloads, Paypal downloads, bank statements, credit card statements....anything and everything that shows a business transaction.

2) Organize
A big fat pile of the information rounded-up (from step 1) can be overwhelming. Let's make it more manageable. You will need a physical file and/or a computer file for each month. You can file the data by month and then by incoming (income) or outgoing (expenses) within each month. When it comes time to enter the data you will now have the data you need at your finger tips.

3) Report
Now it is time to enter all the data into a reporting system of some sort. You want to know if you are making a profit, this is how you are going to determine that. There are many options on how to go about this. From D.I.Y. to done for you, from free to paid for, from spreadsheets to accounting software. The possibilities are vast. Finding your ideal solution can be tricky. Knowing what your options are is half the battle...so you're almost there!

{Spreadsheets}
Options: Excel, Open Office, Accounting SPOT: Free, Inexpensive

{Free Software}
Options: QuickBooks Online Simple Start, MicroSoft Office, For Mac: TinyBooks

{Purchased Software}
Options: QuickBooks, PeachTree, MicroSoft Office

Take a look at each of these. Play around with the ones you can. Get a feel for which one work in a way that will help you keep your business on track and up to date.



So, there it is. Bookkeeping for your small business and Etsy Shop, 1. 2. 3. Once you've made it this far, as a bonus, tax reporting is a breeze. Your bookkeeping solution will help categorize your business expenses in a way that will easily carry over to your tax reports.

If you need any help determining the best course of action for you and your business, please feel free to contact me! Good luck and try to have a little fun with it!

{Holly Neitzel, owner Accounting SPOT}
MBA, Certified QuickBooks ProAdvisor
www.AccountingSPOTonline.com

5 comments :

  1. Thanks Holly and Lindsay! Easy to read and understand - thanks for the software suggestions!

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  2. Holly, are you going to create a template for Outright? Etsy just recommended them and really helpful that they do most of this automatically. Their csv import is a little confusing though

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  3. Hi!

    Thanks for your message :) I linked you in my Bright, Bold, and Beautiful ~ Wrap it Up series today...

    xo Laura

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  4. Peachtree First Accounting also offers a free version here too http://offer.peachtree.com/freedownload/?source=DE8B8D72DD0144F5B0F3ADED894B99DB

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  5. I found Excel to be one of the most helpful when it comes to bookkeeping and I really love the formula features, helps a lot in computing.

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