Basic Book Keeping

Basic bookkeeping is crucial for maintaining accurate financial records and managing the financial health of your business. Here are some essential bookkeeping tips to help you get started:

1. Organize Your Documents: Keep all financial documents such as receipts, invoices, bank statements, and expense records organized and easily accessible. Consider using digital tools or physical folders to sort and store these documents.
2. Separate Business and Personal Finances: Open a separate bank account and credit card for your business transactions. This separation makes it easier to track business-related income and expenses and simplifies tax reporting.
3. Choose a Bookkeeping System: Decide whether you will use a manual or digital bookkeeping system. Spreadsheets (e.g., Excel or Google Sheets) can work for smaller businesses, while accounting software (e.g., QuickBooks, Xero) can automate many processes. Download a Sample Excel Template here.
4. Track Income and Expenses: Record all sources of income and categorize your expenses accurately. Common expense categories include rent, utilities, office supplies, marketing, and employee salaries.
5. Regularly Reconcile Accounts: Reconcile your bank statements and credit card statements regularly to ensure that all transactions are accurately recorded and to catch any discrepancies.
6. Record Transactions Promptly: Enter transactions as soon as they occur to avoid forgetting or misplacing important details. This helps maintain up-to-date and accurate financial records.
7. Create Invoices: Issue invoices promptly to clients or customers for goods and services provided. Make sure your invoices include all necessary information, such as payment terms and due dates.
8. Monitor Cash Flow: Keep a close eye on your cash flow – the movement of money in and out of your business. Adequate cash flow management helps you avoid liquidity issues and plan for expenses.
9. Stay on Top of Tax Obligations: Understand your tax obligations and deadlines for filing and payment. Set aside funds regularly to cover tax liabilities and consider consulting with a tax professional for guidance.
10. Regularly Review Financial Statements: Generate and review financial statements such as the income statement (profit and loss statement) and balance sheet. These statements provide insights into your business’s financial performance and overall health.
11. Backup Your Data: If you’re using digital accounting software, ensure you regularly back up your data to prevent loss in case of technical issues.
12. Educate Yourself: If you’re handling your own bookkeeping, take the time to educate yourself about basic accounting principles. This knowledge will help you make informed financial decisions.
13. Consider Professional Help: As your business grows, you may want to consider hiring a professional bookkeeper or accountant to ensure accurate and compliant financial records.

Remember, consistent and accurate bookkeeping is essential for making informed business decisions, securing loans, and preparing for tax season. If in doubt, seek guidance from financial professionals. Click here to download a simple book keeping template.

If you need further assistance, contact a GEA Business Advisor