This is the year you get all your ducks in a row!
Discover... The Essentials of Bookkeeping
Because Knowledge is Money
Publisher: L. Kenway BComm CPB Retired | Modified June 2024
Relax, sip on a tall, cool glass of water while YOU learn how basic bookkeeping practices help you to TAKE CONTROL of your business finances!
Updated Look and Feel
On May 28, 2024, this site was updated from a two column format to a one column format. One of the changes made was to increase font sizes for a better reading experience. Unfortunately, all the fonting did not transition well ... probably due to me "customizing" it in various places. I apologize for these distractions while you are on the site. I am in the process of correcting the issues but it may take some time as I have to review every one of the 700 pages + and there's only one of ME!
Help getting all your ducks in a row
Let's take a quick look at the site structure to give you a better idea if this site will be a good fit for you or not.
1. Who is this site for?
This site is designed as a series of casual chats for:
- Sole proprietors and home-based business owners in Canada and the U.S.A.
- Individuals with a basic grasp of bookkeeping looking for free resources.
- Anyone aiming to gain control over their business finances or simply seeking improvements in their bookkeeping practices.
Is that you? Then this site is for you! Let's chat and have fun while exploring the financial side of your business even if your initial reaction is, "Bookkeeping? Fun? I don't think so".
2. Who this site is not for?
This site may not be a good fit for:
- Someone wanting to learn bookkeeping. There are many sites and programs that do that. This site will build on already existing bookkeeping knowledge or your understanding of business finances. Please don't get discouraged.
- Someone working for medium and large corporations. Procedures for that size of business are a bit different and often more complex. Your accountant would be a better place to seek solutions. This site might help you frame the questions and understand your accountant's response a bit better though.
3. What's on this site?
This site is composed of casual yet informative discussions on everyday bookkeeping issues, providing:
- Practical, actionable information.
- Insights into good bookkeeping practices that extend beyond traditional education because I understand that not all small business owners ‘follow the rules’.
- A cheat sheet to help you keep your debits and credits straight.
- Assistance with common bookkeeping entries, general compliance matters, and much more.
4. What will this site help you accomplish?
I will help you:
- Take control of your business finances and manage all the financial paperwork that goes along with owning a business.
- Learn a systematic approach to reduce or eliminate mistakes in your books and pay your bills on time.
- Work towards having an audit ready set of books to keep the auditor off your back.
- Communicate effectively with your accountant or banker, improving both your understanding and confidence in financial discussions. No more crossing your fingers or holding your breath that you got it right!
About This Site
I'm a retired certified professional bookkeeper. I launched this site in 2009 to help small business owners who couldn't afford a bookkeeper get their books in order. It took on a life of its own over the years.
As I retired from bookkeeping in 2020 I am going to restructure the content on this site to make it easier to keep the information up-to-date.
My first step was to split the site into two segments: all Canadian compliance tax information now resides (or will shortly) on Bookkeeping-Essentials.ca.
My second step was to introduce a revamped aesthetic. The two sites mirror each other but with distinct nuances. My goal remains to offer familiarity with a touch of freshness, sort of like meeting a pair of identical twins.
My third step will be to update and consolidate the remaining content on Bookkeeping-Essentials.com to focus exclusively on teaching good bookkeeping practices with a touch of U.S. compliance information. This separation will ensure each site can more effectively address specific reader needs. Updating articles will be a slow process as there are over 700 pages on this site.
As I update each article on the site, I will now include:
- an initial publication date, and if applicable;
- a revision date - content has been merged, reorganized, expanded, and updated to improve the quality or accuracy of the article;
- an update date - material is substantially the same but has been modified to make it current such as links, dates, rates, or correct errors or reflect changes to compliance rules; and
- an editing date - minor edits on formatting, grammar, or spelling errors.
Bookmark this site and watch for good bookkeeping practice tips and pointers as you work your way through the site. I hope you find the restructuring of information over the coming months on this site practical in nature as well as being a useful bookkeeping resource.
You've Got This, Laura
P.S. Do just one thing today towards getting your bookkeeping paperwork organized. Then do just one thing tomorrow too.
The Proper Foundation
If you are a small business owner, it’s probably a good bet that bookkeeping isn’t your cup of tea. On the other hand, some people love bookkeeping (like me). Whatever way you look at it, it’s a necessary component of running a successful business.
Good bookkeeping practices depend partly on the bookkeeping system you’ve set up. I’m talking more than software or the lack of it.
The method of data compilation for your business records, whether manual or computerized, is the BACKBONE of every small business, whether YOU, the owner, know it or not.
- What is the best way to organize, enter and file each receipt received and invoice issued? ... There isn’t one right way, so I’ll discuss your options.
- What do you do after you’ve entered all the data into your synoptic ledger or accounting software? ... I’ll show you.
- What is the purpose of expending all this effort? ... To create a set of internal financial statements and accounting reports to help run your business, meet your compliance responsibilities and prepare your annual tax return.
So I say .. if you gotta do it, you might as well do it properly.
I don’t want to be impolite so let me introduce myself, eh (I’m Canadian) :o) I’m a retired certified professional bookkeeper working from home in western Canada.
Allow me to be your private tutor to the world of small business accounting.
T a k e a t e a b r e a k w i t h m e t o d a y
a n d l e t ' s c h a t a b o u t y o u r b u s i n e s s ...
I invite you to schedule a regular tea break with me over the next few weeks. I know you are busy. That’s why I recommend you schedule regular short 15-minute tea breaks ... learn in bite-sized pieces as you make your way through the 700 pages (plus or minus) on this site.
It’ll be frustrating and confusing at first, but stick with it, and you will eventually start to “get it”. I’ve purposely arranged the material on the site into bits and chunks because, in my experience, that’s how you creative sole proprietors take in your information.
Remember, this isn’t school, and there are no tests. Just relax and enjoy learning more about running your business.
Visitor Comments From The e-Mailbag
I LOVE your website and the path you've taken.
I started out working from my home office 6 years ago and have had some ups and downs but I'm always finding it difficult to get answers to various questions that come up.
Your site has been a soft landing spot for me and I actually took 10 minutes out to read through it instead of just coming here to pick out my answer and leave.
I have many more things to read but I just wanted to thank you for giving us a place to go.
Good Luck to you!
Lucy from Markham, Ontario, Canada, February 2009
P.S.
Many questions have been answered. It's (this site) marked as one of my
favourite go to websites and it will be a current up to date place to
go when I need quick answers.
Has this site helped you ? Provide your site testimonial here.
The time to have a map is before you enter the woods.
Brendon Burchard
6 Essential Components To
Designing Your Bookkeeping System
Six components are essential in designing the proper accounting system for your home-based business. These components form the foundation upon which YOU, the owner, will make informed business decisions.
Here's what you need to do:
- Choose a filing system that meets government retention requirements and fits with your organizational style (so you can lay your hands on documents when you need them);
- Select a transactional recording system (my preference is QuickBooks® Online but Excel is also a popular choice along with a plethora of cloud options);
- Setup a chart of accounts (your blueprint that categorizes your numbers so they make sense);
- Develop processes (who does what when) and create procedures (how you do it) to ensure consistency and prevent fraud … even if you are a team of one;
- Monitor the system for accuracy; and
- Interpret the results of your accounting reports (to help you run your business and make sound business decisions).
Taking these steps will put you on your way to feeling more organized and efficient.
Your Bookkeeping System Should Serve You
It’s important to understand that your accounting system will change as your business grows.
Your size, your business structure, your industry, your internal control requirements means your system needs to be considered carefully. It needs to be designed so it is easy to use and in such a way that you can understand it even if you don’t have bookkeeping training. In other words, your accounting system needs to serve you just as well as your bookkeeper, your accountant or the tax auditor.
To serve you well, it needs to ...
- Help you by answering questions like - are you charging enough to cover your expenses or what is your profit margin or are you spending too much.
- Track criteria agreed upon in bank lending arrangements.
- Aid in the efficient and accurate preparation of all your U.S. or Canadian compliance tax returns (think sales and use taxes, employment and payroll taxes, worker compensation premiums and income taxes).
- Ensure you can pass a tax audit with flying colors by tracking what is required by law and having a system to retain your support documentation.
We’ll cover each of the six essential components separately in the coming days. IF you want to start at the beginning, start by considering ...
... a yardstick to evaluate your bookkeeping system needs.
But some of you just aren't planners and thinkers. You want to jump right in and get started. This next part is for you.
So What are Good Bookkeeping Practices?
I like to break good bookkeeping practices into eight categories:
8. File and remit the amounts owing on time.Wouldn't it be great to be as adept with the financial management of your small business as any CEO in a major corporation, so you can ...
Let's Chat About
- How to read financial statements.
- Evaluate the health of your business.
- Identify early warning signs of potential problems.
... systematically look over your business finances with an eye to
increasing your profits? Plus know how to get all the tax deductions you
are entitled to?
You are obligated by law to pay only your fair share of tax, so why pay more?
Would having the opportunity to put more cash in your pocket legally make record keeping more enjoyable for you?
No
one will take better care of your finances than YOU. Even if you have a
bookkeeper and accountant, you still need to take time to understand
and manage your business' finances. Isn't it time to take control?
How One Visitor Used This Site
I enjoyed your website!
I was searching for info related to online courses to get started in bookkeeping. My object was to get training to do bookkeeping for several small businesses.
I am retired, and have a bit of bookkeeping/accounting and some familiarity with Simply Accounting. Just don't feel qualified to "hang out my shingle" yet.
Lots of info and links! I spent quite a bit of time here but could spend more hours yet!
Dave from Nakusp, British Columbia, Canada, March 2010
How do you use this site? Provide your site testimonial here.
D i s c o v e r ...
... the tools of the trade you need to absolutely take control of your small business accounting in an informal, easy to understand way. ;-) Tools that make it easier than ever to be successful at the financial management of your business.
Because the GOAL is to have a life outside your business ... not to be in business to work every day ... but to build business value. Isn't that what you really had in mind when you started on this path of entrepreneurship?