Setting up an accounting system is a necessary part of any business. You need to be able to track your expenses and income, file reports, and review your data. Fortunately, there are simple ways that you can make the accounting process quick and easy. Here are a few of the major steps to consider when implementing an accounting method that will cover all the bases.
Open a Bank Account
Your business expenses should be kept separate from your personal banking, so one of the first things you should do is open a business bank account. This will help you to easily do your taxes, process income statements, and keep your records straight.
Have a Business Credit Card
Another area that you need to address for your business is how you are going to pay for materials and any immediate repairs or other needs you have. Consider opening a business credit card so you can safely and conveniently make purchases. This will also help you build credit that you could take advantage of later on.
One of the best ways to monitor and manage your business finances is with a good software program. A business accounting software like QuickBooks pro can make all the difference when it comes to doing your own accounting. Quickbooks is an excellent way that you can track and record all of your outgoing expenses and all incoming deposits from various sources of income.
You can set up accounts with all of you are regular vendors so that you can run invoices to send out each month, and even run regular reports in different categories to easily track any trends or identify issues.
Taxes can be one of the more confusing things about doing your own accounting. You will need to know all of the requirements for reporting and paying your taxes and how to file the appropriate forms with the right agencies.
QuickBooks can be a huge help in this area with reducing the likelihood of errors by generating the correct reports and even giving you the option to file online or print a prefilled form. QuickBooks is also a convenient way to keep all your financial information in one place so you can reprint reports as needed and regularly process an income statement to see where you currently stand.
Your employee record keeping will become easier when you use the software as well. You can easily process payroll and create and print W-2s to distribute to your employees.
Monitor Profits and Sales Numbers
Being able to create a summary or detailed report in any area of your business, from specific expense categories to the cost of goods sold to income, will help you immensely. Or, you can print and review an overall income statement that gives you the full picture of how your business is doing at any specified time period.
This is also helpful so you can do a regular self-audit to make sure that you are recording all information that you need in an accurate and easy-to-understand way.
Backup Your Data
Finally, when you are doing your own accounting it is very important that you backup all of your files every time you log into QuickBooks to run payroll or enter new bills or income. Create a local and external backup. You can save the newly entered data on your desktop, but it’s good practice to also use a secondary method such as a thumb drive in case of computer issues.
Many forms of QuickBooks allow you to access your company file from different computers, so it’s very important that all the information is saved and backed up every time someone makes changes so the information remains current across all of the computers in use on your company file.
With a little time invested into set up, you will be able to access your information, run reports, and file the necessary paperwork with ease. A solid accounting system will keep your business running smoothly and let you relax in knowing you have everything handled.