How to Do Bookkeeping: Basics Every Small Business Owner Needs to Know

Adjusting entries are made for accrual of accounting and bookkeeping for small business and expenses, depreciation, allowances, deferrals and prepayments. When you’re preparing the accounting for a small business, use the balance sheet as a check to help with the accuracy of the books.

Remember, it’s crucial that each debit and credit transaction is recorded correctly and in the right account. Otherwise, your account balances won’t match—which means you don’t have an accurate understanding of where your business actually stands financially.

Reasons Why Bookkeeping is Important for Your Business

Helping small businesses create efficient, compliant processes. This can apply to things like shipping, receiving, and billing. Small businesses identify these errors within weeks, rather than encountering multiple errors that need addressing during tax season. Any connections between you, your bank accounts, and Wave are protected by 256-bit SSL encryption. If you’re interested in our payroll software, you can start a free 30-day trial when you sign up for Wave. After creating your account, everything is set up so you can get started. Your data is always available, and backed up for extra peace of mind.

Additionally, QuickBooks Online allows you to create custom invoices and forms so your company’s branding is always at the forefront of client-facing communications. For the features and services you get, the price is a bargain. 4Corner Business Services is Denver’s answer to both accounting and bookkeeping services for small businesses. We offer expert professional accounting services to small and large businesses across the Denver metro area.

Intuit QuickBooks Online

So, you don’t need to feel overwhelmed as a bookkeeping app will make doing your books a whole lot easier, giving you greater peace of mind. The above terms are really the most basic bookkeeping terms you should be aware of – to begin with. This is simply the money or other assets which personally belong to you as the owner and not the actual profit you generate from your business or self-employment. Assets are simply all the things you or your company owns to help you successfully run the business. It can range from cash, buildings and land right through to tools, vehicles and furniture. John Gillingham is a Certified Public Accountant, the Owner of Gillingham CPA, PC, and the Founder of Accounting Play, Apps to teach Business & Accounting. Bookkeeping is the act of recording your daily business transactions.

This method can work for freelancers or sole proprietors with no more than one or two business transactions a month. A digital app lets you keep your incomings, outgoings and everything in between properly organised which makes it simpler to manage your financial records. By opening a new bank account, you can keep your personal finances and your business dealings separate so there’s never any confusion between the two. When it’s time to do your books, you’ll easily know where to find the financial information you need. You can quickly lose track of where your petty cash has gone if you don’t keep accurate records.