17 steps to doing your own bookkeeping
If you are a small business owner working from a home office in Canada or the U.S. ...
and you want basic bookkeeping help so you can start doing your own books ...
then I suggest you use this site as your "go-to" resource to assist you when you encounter a bookkeeping problem.
There is a lot of information on this site. New pages are added
regularly. The Site Map link at the bottom of the page explains how this
site is laid out ...
but here's what I suggest you do to get started on learning the bookkeeping basics (follow each link):
In the United States, for tax purposes, you can choose between cash
basis OR accrual basis accounting IF your business has five million
dollars or less in sales OR you carry inventory with under one million
in sales .
In Canada, you must use the accrual basis of accounting for tax purposes. Only farmers and fishermen can use the cash basis of accounting.
Accrual basis of accounting means you record the transaction when it happens. The cash basis of accounting records the transaction when the money exchanges hands.
The advantage of accrual accounting is you can keep track of who owes you money in your accounts receivable account and when it is due ... helping you manage your cash flow.
You can also track who you owe money to in your accounts payable account and when it is due ... allowing you to set your priorities for accounts payable to keep your credit rating intact.
If you decide not to do your own books because it's more work than you thought, check out my virtual services.
1. Avoid using computer software that is not suited to your size of business or your skill level. This is one of the biggest mistakes DIY bookkeepers make.
You may be interested in reading A Yardstick to Evaluate Your Book Keeping System.
It helps you decide which bookkeeping system is best for your business by giving you system criteria (manual or computer) and questions to ask yourself. The article should assist you in determining whether you need hire basic bookkeeping help ... or if DIY is the best choice for you.
2. Don't fall behind on billing your customers ... and followup quickly when payments are overdue. I learned this lesson the hard way years ago.
Here is a short chat on invoicing and accounts receivable. Follow the links in the chat.
3. File all your tax compliance reports on time, even if you can't pay them. If you just don't have the time to get to them, that is an indication you need to hire basic bookkeeping help.
On my compliance pages, you will find all your due dates you must meet as a small business owner in Canada and in the United States.
4. Too many DIY bookkeepers pay too much tax because their records are not accurate enough to claim valid tax deductions.
You might want to bring yourself up-to-date on valid tax deductions in Canada and in the United States.
5. My last tip for you is to always do your bank reconciliation and credit card reconciliation EVERY (yup I said every!) month. You are running a business now making this step imperative.
Consider it part of your month end process. What!! You don't have a month-end process. GASP!!!!! Then using my bookkeeping checklists should at least help keep you on task.
Remember, if you decide not to do your own books because it's more work than you thought, check out my virtual services.
Use the search feature to quickly find the
information you're looking for.
Click on image above to read the chat.
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