When it comes to bookkeeping, simple works better. Don’t get bogged down with complex accounting packages when there are simple solutions available for you. Please consider using the materials that come with this guide, a simplified bookkeeping system to accomplish your necessary bookkeeping tasks. Getting started with accounting can be daunting for small businesses. That's why we've asked some of our smartest partners to share their do's and don'ts with you. Their tips can help you approach your books with confidence.
Don’t wait; use your bookkeeping tools regularly. The nature of your business requires daily tracking of things like mileage, travel, and other expenses. If you wait until the end of the year, you’ll be challenged to recall a whole year’s worth of details at once. In addition to updating the current month’s information, look back also at prior months. This will help you stay connected to your business and your progress.
Accurately record all income and expenses relating to your business. Be sure to keep expenses by appropriate category, and refrain from overusing general categories such as “miscellaneous,” “office,” or “supplies.” When the time comes to report these items on your income tax return, it paints a clearer picture to separate out related expenses rather than combine everything together into a single category. It’s better if your examiner can quickly see on what you’re actually spending money.
Keep “original source documents” to substantiate your income and expenses. For income items, you should keep invoices and monthly statements, order forms, bank deposit slips, receipts and ledgers related to the sale. For expense items you should keep cancelled checks, cash receipts, credit card records etc.