Getting Started With Bookkeeping

Small Business Bookkeeping is just about one of the most important responsibilities a small business owner will have. If you are making money from self-employment full or part-time you are considered a small business owner and the success of your business depends on creating and maintaining an effective record-keeping system. It does not matter if your business is a sole proprietorship, partnership, or corporation.

For tax purposes, you are required to keep good accounting records.

Most importantly, the record-keeping system you use must be suited to your particular business needs. Proper record-keeping for small businesses makes the process easier and keeps you compliant with the law.

It will also help you in the long run, to be prepared in case of an IRS audit.

Most importantly, records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success.

Record keeping is also about understanding your business, now and in the future. You should keep good records, that include:

1. Detail Tracking

You are required to track a significant amount of information, such as customers, sales, inventory, and expenses. Without a proper record-keeping system, tracking important details of your business may be impossible and can lead to you paying far more taxes than you should have.

2. Legal Compliance

As an owner, you may hold various licenses, permits, insurance, contracts, etc. As an employer, you will be required to maintain and report employee payroll for tax purposes.

3. Tax Preparation (Federal, State, and Local)

You need good records to prepare your tax returns. Good records of your business financial transactions may be able to save you thousands of dollars.

Your records must support the income, expenses, and credits you report.

You need Supporting documents including sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents.

Generally, these are the same records you use to monitor your business and prepare your financial statements.

The financial statement may include income (profit and loss) statements and balance sheets.

  • An income statement shows the income and expenses of the business for a given period of time.
  • A balance sheet shows the assets, liabilities, and equity in the business on a given date.

Difference between an Accountant and a Bookkeeper

Bookkeeping is the first part of the accounting process, so the work of a bookkeeper and accountant often overlaps. The difference between an Accountant and a Bookkeeper is an accountant is a professional who handles the bookkeeping and prepares financial documents like profit-and-loss statements, balance sheets, etc. They perform audits of your books, prepare reports for tax purposes, and handle all the financial information that’s part of running your business.

Bookkeeping focuses on recording and organizing financial data, while accounting is the interpretation and presentation of that data.

Common Bookkeeping Methods

Manual Bookkeeping

With manual bookkeeping business accounting records are entered into a notebook or journal. You should have a basic understanding of the types of small business accounts there are and debits and credits. You will also have to decide what accounting method you will use to enter your transactions.

Accounting Software

Computer accounting software is a great option for handling your bookkeeping needs. I could not live without it! If you are starting your first business, you will quickly find out how important accounting software is to the success of the business. You don’t have to worry about having extensive knowledge of accounting. Computers transfer the right numbers to the right accounts and make sure those numbers get put on the proper side of the account, the debit side, or the credit side.  

QuickBooks is the industry standard a free alternative that may not have all the bells and whistles like QuickBooks, yet it gets the job done, is GnuCash! It is a great alternative for those just starting out or someone simply working with a limited budget!

Make Money Publishing Kindle e-books

Create and sell Kindle ebooks for amazon kindle and join the hundreds of thousands of writers making money selling kindle books. For fiction and nonfiction authors alike, publishing on Kindle is a valuable opportunity that shouldn’t be overlooked.

You can Self-publish eBooks and paperbacks for free by converting your books into electronic format with the Kindle Direct Publishing self-publishing tool. And you can sell them in the Amazon Kindle store and reach millions of readers on Amazon.

You can get your books to the market quickly and easily. Simply upload your content, enter the sales copy and pricing information, and in less than 5 minutes your book appears on Kindle stores worldwide within 24-48 hours.

And the royalty rates are great, you can earn up to 70% ebook royalties. Only there is one catch The royalty rate you get paid from Amazon for eBooks is 70% of the retail price if the price of your eBook is between $2.99 and $9.99. If your book is priced between $0.01 and $2.98 or greater than $9.99, you get paid 35% royalties.

On the upside according to Amazon’s 2019 review of its Kindle sales, there are thousands of self-published authors taking home royalties of over $50,000, while more than a thousand hit six-figure salaries from their book sales in 2018. What are you waiting for head over to the kindle direct publishing and begin earning money!

Free Money to Help With Internet Cost

The Affordable Connectivity Program is an FCC benefit program that helps ensure that households can afford the Internet service they need for work, school, healthcare, and more.

    The benefit provides a discount of up to $30 per month toward internet service for eligible households and up to $75 per month for households on qualifying Tribal lands. Eligible households can also receive a one-time discount of up to $100 to purchase a laptop, desktop computer, or tablet from participating providers if they contribute more than $10 and less than $50 toward the purchase price.

    The Affordable Connectivity Program is limited to one monthly service discount and one device discount per household.

    Who Is Eligible for the Affordable Connectivity Program?

    A household is eligible for the Affordable Connectivity Program if the household income is at or below 200% of the Federal Poverty Guidelines, or if a member of the household meets at least one of the criteria below:

    -Participates in certain assistance programs, such as SNAP, Medicaid, Federal Public Housing Assistance, SSI, WIC, or Lifeline;

    -Participates in Tribal specific programs, such as Bureau of Indian Affairs General Assistance, Tribal TANF, or Food Distribution Program on Indian Reservations;

    -Participates in the National School Lunch Program or the School Breakfast Program, including through the USDA Community Eligibility Provision;

    -Received a Federal Pell Grant during the current award year; or

    -Meets the eligibility criteria for a participating provider’s existing low-income internet program.

    How to Manage A Business Credit Card Account In GnuCash

    In the tutorial, you will learn how to manage a credit card account in GnuCash to keep track of all your business credit card expenditures.

    It is not uncommon to use a credit card for some of your business transactions after all a credit card account is like a short-term loan that comes in handy when you have a business, but then you .eventually have to pay back the money, often with interest.

    Credit card transactions are a liability because it is money you owe. In GnuCash The purchases you make with a credit card are classified as expenses.

    You have a couple of options when entering credit card transactions. The simplest method is to only track monthly payments to the credit card company.

    This method only requires you have a checking account, a credit card liability account, and a credit card expense account.

    The obvious limitation of this simple credit card setup is that you cannot see where your money is going. And since you are tracking business expenses you want to be as transparent as possible, when it comes down to your business expenses. If not for yourself for tax purposes.