Where to Start with Your Small Business Bookkeeping

Starting a small business is an exciting time that also comes with a lot of responsibilities. One of those responsibilities is effectively managing your business’s finances. To do this, you need to start with proper bookkeeping, which can seem intimidating at first. Bookkeeping is simply the process of keeping track of your business’s financial transactions to see where your money goes on a day-by-day basis. To help you get started, we at Taurus CPA Solutions have provided some essential steps.

 

1. Create a Bookkeeping System

The first step in bookkeeping is creating a system that works for you and your business. It’s vital to keep track of all financial transactions, such as income, investments, and expenses, and one common method for tracking finances is using software like QuickBooks. These software programs allow you to track all transactions and provide you with reports to help you understand your business’s financial health.

 

2. Separate Your Business and Personal Finances

One of the most common mistakes small business owners make is mixing their personal and business finances. While it’s more convenient to combine them, it only causes confusion, makes bookkeeping more difficult, and can cause a lot of other potential problems. To separate your finances, open a separate business bank account and use it for all business transactions, which will make it easier to track income and expenses and make tax time less stressful. To further simplify your business bookkeeping, use a business credit card for all business expenses instead of your personal credit card.

 

3. Track Income and Expenses

Tracking your income and expenses is at the very core of bookkeeping, as it’s vital to record income, whether it’s credit card payments, checks, or cash. It’s also important to track all expenses, including rent, supplies, bills, and any other costs associated with your business. Be sure to categorize your expenses so you can see where your money goes. One example of this is to have categories for business travel expenses, marketing, or office supplies. By using categories, you can identify areas where you can save money, make more informed decisions about your business finances, and reconcile your accounts.

 

4. Prepare Financial Statements

Financial statements provide a snapshot of your business’s financial health and can help you make more informed decisions about your business. The two most common of these are the balance sheet and the income statement. The balance sheet shows your assets, liabilities, and equity over a time period while the income statement shows your income and expenses over a period of time.

 

5. Work With a Professional

At Taurus CPA Solutions, we understand that bookkeeping is a time-consuming and complex task that not everyone has the time or expertise to handle themselves. There are other areas of your business you’d rather focus on, and math isn’t everyone’s strongest skill. When you rely on a professional to do the bookkeeping for you, you experience less stress and have more time to focus on what matters.

 

Contact Us

Small business bookkeeping doesn’t have to be a difficult task to deal with in your small business, whether you’re doing it yourself or having someone else do it for you. If you’re ready to make your bookkeeping and accounting work for you, reach out to our experts to learn more about the services and solutions we offer.