If you’re a small business that is new to the game, you may have no idea what you’re doing when it comes to the accounting side of things. Accounting and bookkeeping are a whole new language for you to learn. Let’s talk a little bit more about your books, how to keep them, and how to stay on track.
What are my books?
Every business needs to keep track business activity. This allows business owners to monitor operations, understand if their business is profiting, and eventually build a budget. Your books are the record of your business activity, and each activity is categorized. Each category is an account in the Chart of Accounts (this is the backbone to any accounting program). Each category/account will show on either one of two reports, the Balance Sheet or Profit & Loss Statement (“PNL”).
Therefore, your “books” is most-often a reference to your Profit and Loss Statement and your Balance Sheet. The Profit and Loss statement (P&L) shows business activity over a duration of time whereas the Balance Sheet (B/S) shows the value of the business at a specific moment in time.
How do I keep my books?
Creating transactions in QuickBooks for each activity of your business is Keeping your books. Periodically, typically monthly, you should reconcile your books to your Bank Statement and Credit Card Statements; this ultimately helps you clean-up your books so they match what is actually happening in your accounts at the Bank and your Credit Card company. Doing this regularly will help you stay on track, especially if you complete a lot of regular sales. Ultimately, all of this data helps flows into your Profit and Loss Statement and your Balance Sheet. QuickBooks® for Businesses is an easy-to-use resource to help you manage your business.
Bookkeeping isn’t as difficult as it seems, but it can still seem daunting. Money Matters offers Training as well as on-demand and on-going bookkeeping/accounting assistance. give Money Matters a call or schedule an appointment.
