Bookkeeping Startup Checklist

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.

1. Open a business checking account

You should always use a separate business checking account for business to keep track of income and expenses only. Do not use a personal checking account for business

2. Identify sources of your income

Your records can identify the sources of your income. You need this information to separate business from non-business receipts and taxable from nontaxable income.

3. Keep track of your deductible expenses

Unless you record them when they occur, you may forget expenses when you prepare your tax return.

4. Keep track of your basis in the property

Your basis is the amount of your investment in property for tax purposes. You will use the basis to figure the gain or loss on the sale, exchange, or other disposition of property, as well as deductions for depreciation, amortization, depletion, and casualty losses.

The Type of Records You Should keep

The business you are in affects the type of records you need to keep for federal tax purposes. Your business records must be available at all times for inspection by the IRS. You will need all Documents to Support items reported on your tax returns. If the IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination.

Supporting Documents

Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents.

Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain the information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return. You should keep them in an orderly fashion and in a safe place. For instance, organize them by year and type of income or expense.

The following are some of the types of records you should keep:

  • Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents for gross receipts include the following:
    • Cash register tapes
    • Deposit information (cash and credit sales)
    • Receipt books
    • Invoices
    • Forms 1099-MISC
  • Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the amount was for purchases. Documents for purchases include the following:
    • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transfer
    • Cash register tape receipts
    • Credit card receipts and statements
    • Invoices
  • Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and a description that shows the amount was for a business expense. Documents for expenses include the following:
    • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transfer
    • Cash register tapes
    • Account statements
    • Credit card receipts and statements
    • Invoices
    • Petty cash slips for small cash payments
  • Travel, Transportation, Entertainment, and Gift Expenses
    If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expenses.
  • Assets are the property, such as machinery and furniture, that you own and use in your business. You must keep records to verify certain information about your business assets. You need records to compute the annual depreciation and the gain or loss when you sell the assets.
  • Documents for assets should show the following information:
    • When and how you acquired the assets
    • Purchase price
    • Cost of any improvements
    • Section 179 deduction taken
    • Deductions taken for depreciation
    • Deductions taken for casualty losses, such as losses resulting from fires or storms
    • How you used the asset
    • When and how you disposed of the asset
    • Selling price
    • Expenses of saleThe following documents may show this information.
    • Purchase and sales invoices
    • Real estate closing statements
    • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transfer

Prepare your financial statements

You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business.

  • 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.

Prepare your tax return

Last but not least, you need good records to prepare your tax returns. These records must support the income, expenses, and credits you report. Generally, these are the same records you use to monitor your business and prepare your financial statement.

The Healing Power of Yoga

The question that has always ran through my mind every time I heard the word Yoga is what is yoga?  How does it work and what are the benefits? I decided to do some research on the topic and I found the benefits to be quite interesting. So, Ic  wanted to share my findings with you all who may be asking the same questions.

What is yoga and how does it work?

Yoga is an ancient and complex practice, rooted in Indian philosophy. It began as a spiritual practice but has become popular as a way of promoting physical and mental well-being.

Although classical yoga also includes other elements, yoga as practiced in the United States typically emphasizes physical postures (asanas), breathing techniques (pranayama), and meditation (dyana). 

There are many different yoga styles, ranging from gentle practices to physically demanding ones. Differences in the types of yoga used in research studies may affect study results. This makes it challenging to evaluate research on the health effects of yoga.

Yoga and two practices of Chinese origin—tai chi and qi gong—are sometimes called “meditative movement” practices. All three practices include both meditative elements and physical ones.

 

What are the health benefits of yoga?

Research suggests that yoga may:

  • Help improve general wellness by relieving stress, supporting good health habits, and improving mental/emotional health, sleep, and balance.
  • Relieve low-back pain and neck pain, and possibly pain from tension-type headaches and knee osteoarthritis.
  • Help people who are overweight or obese lose weight.
  • Help people quit smoking.
  • Help people manage anxiety or depressive symptoms associated with difficult life situations.
  • Relieve menopause symptoms.
  • Help people with chronic diseases manage their symptoms and improve their quality of life.

Although there’s been a lot of research on the health effects of yoga, many studies have included only small numbers of people and haven’t been of high quality. Therefore, in most instances, we can only say that yoga has shown promise for particular health uses, not that it’s been proven to help.

What does research show about yoga for wellness?

Studies have suggested possible benefits of yoga for several aspects of wellness, including stress management, mental/emotional health, promoting healthy eating/activity habits, sleep, and balance.

Can yoga help with pain management?

Research has been done on yoga for several conditions that involve pain. Studies of yoga for low-back pain and neck pain have had promising results, and yoga is among the options that the American College of Physicians recommends for first-line treatment of chronic low-back pain. Preliminary evidence suggests that yoga may also be helpful for tension headaches and knee osteoarthritis pain.

How does yoga affect mental health?

There’s evidence that yoga may be helpful for anxiety associated with various life situations, such as medical conditions or stressful educational programs, and for depressive symptoms. The evidence on yoga’s impact on diagnosed mental health conditions is less promising.

Can yoga help with menopause symptoms?

Yoga seems to be at least as effective as other types of exercise in relieving menopause symptoms. A 2018 evaluation of 13 studies (more than 1,300 participants) of yoga for menopause symptoms found that yoga reduced physical symptoms, such as hot flashes, as well as psychological symptoms, such as anxiety or depression.

Is yoga helpful for people with chronic diseases?

There’s promising evidence that yoga may help people with some chronic diseases manage their symptoms and improve their quality of life. Thus, it could be a helpful addition to treatment programs.

What does research show about practicing yoga during pregnancy?

Physical activities, such as yoga, are safe and desirable for most pregnant women, as long as appropriate precautions are taken. Yoga may have health benefits for pregnant women, such as decreasing stress, anxiety, and depression.

Does yoga have benefits for children?

Research suggests that yoga may have several potential benefits for children.

  • A 2016 report from the American Academy of Pediatrics concluded that yoga appears to be promising as a stress management tool for children and adolescents, with very low reports of adverse effects. It also said that yoga may have positive effects on psychological functioning in children coping with emotional, mental, and behavioral health problems. The report noted, however, that studies of yoga for children have had limitations, such as small sample sizes and high dropout rates.
  • A 2020 review of 27 studies (1,805 total participants) of yoga interventions in children or adolescents found reductions in anxiety or depression in 70 percent of the studies, with more promising results for anxiety. Some of the studies involved children who had or were at risk for mental health disorders, some involved children with physical illnesses, and others involved groups of children in schools. The quality of the studies was relatively weak, and the results cannot be considered conclusive.
  • A 2021 review evaluated 9 studies (289 total participants) of yoga interventions for weight loss in overweight or obese children or adolescents. Some of the studies evaluated yoga alone; others evaluated yoga in combination with other interventions such as changes in diet. The majority of the yoga interventions had beneficial effects on weight loss and related behavior changes. The studies were small, and some did not use the most rigorous study designs.
  • A 2016 review looked at 47 studies that evaluated school-based yoga programs. The evidence indicated that implementing yoga in school settings is feasible. However, most of the studies were preliminary, so definite conclusions could not be reached about whether the programs were beneficial.

    What are the risks of yoga?

    Yoga is generally considered a safe form of physical activity for healthy people when performed properly, under the guidance of a qualified instructor. However, as with other forms of physical activity, injuries can occur. The most common injuries are sprains and strains, and the parts of the body most commonly injured are the knee or lower leg. Serious injuries are rare. The risk of injury associated with yoga is lower than that for higher impact physical activities.

    Older adults may need to be particularly cautious when practicing yoga. The rate of yoga-related injuries treated in emergency departments is higher in people age 65 and older than in younger adults.

    To reduce your chances of getting hurt while doing yoga:

    • Practice yoga under the guidance of a qualified instructor. Practicing yoga by self-study without supervision has been associated with increased risks.
    • If you’re new to yoga, avoid extreme practices such as headstands, shoulder stands, the lotus position, and forceful breathing.
    • Be aware that hot yoga has special risks related to overheating and dehydration.
    • Pregnant women, older adults, and people with health conditions should talk with their health care providers and the yoga instructor about their individual needs. They may need to avoid or modify some yoga poses and practices. Some of the health conditions that may call for modifications in yoga include preexisting injuries, such as knee or hip injuries, lumbar spine disease, severe high blood pressure, balance issues, and glaucoma.

    About one in seven U.S. adults practiced yoga in the past 12 months, according to a 2017 national survey. Among children age 4 to 17, it was about 1 in 12. The percentage of people who practice yoga grew from 2007 to 2012 and again from 2012 to 2017.

    This was true for both adults and children. national survey data from 2012 showed that 94 percent of adults who practiced yoga did it for wellness-related reasons, while 17.5 percent did it to treat a specific health condition. Some people reported doing both.

    Much of the research on yoga in the United States has been conducted in predominantly female, non-Hispanic White, well-educated people with relatively high incomes. Other people—particularly members of minority groups and those with lower incomes—have been underrepresented in yoga studies.

    Different groups of people may have different yoga-related experiences, and the results of studies that did not examine a diverse population may not apply to everyone.

    Facts compiled from an article publshed by The National Center for Complementary and Integrative Health. It is for information purposes only not intended to diagnose or suggest you use yoga in place of a doctor’s advice.

Do Away With Toxic Chemical Pesticides And Try Plant-Based Alternatives

These are simple recipes for effective natural pesticides. Applied to gardens, they can replace toxic, commercial brands that can produce harmful health and environmental side effects. These pest controls must be applied at least once a week, and twice if it rains.

Hot Pepper Solution

A general repellent, it is effective for caterpillars, cabbage worms, ants, aphids, beetles, and cutworms.
Recipe: Finely chop 15 peppers and add 1 liter of water. Steep for 24 hours, strain, and apply.

Onion Brew
Onion brew repels a variety of insects, including ants, aphids, army worms, and especially borer insects such as caterpillars.
Recipe: Finely chop 4 cups of onion and add to 2 liters of water. Steep for 24 hours, strain, and apply. Best used when fermented.

Garlic Brew
This brew works to repel many insects, including ants, aphids, and caterpillars, as well as nematodes.
Recipe: Finely chop one-half cup of garlic and add to three-fourths liter of water. Soak for 24 hours, strain, and apply to plant and surrounding soil.

Mint (Mentha)
Mint is relatively easy to grow, if given a lot of water, and once established, can be hard to stop. It can be grown alone or planted among other vegetables, though it should be kept away from cucumbers. It can be used as a repellent against aphids, cabbage pests, and flea beetles, as well as against bacterial diseases.
Recipe: Cut fresh mint leaves and citrus (orange or lemon) peels to make a repellent. Place the pieces in a small pan covered with water, and bring to a boil. Soak overnight and apply during the evening watering.

Tomato-Leaf Spray
This is a particularly effective repellent for aphids and caterpillars, but should not be used on tomatoes, eggplants, peppers, or potatoes.
Recipe: Pack 1 quart of tomato leaves in a sturdy, heat-resistant bucket. Pour 1 quart of boiling water over the leaves, and let the mixture steep for one hour. Next, strain the mixture through a cloth, squeezing the leaf dregs to remove as much liquid as possible. Dilute the mixture with water before using.

Wood Ash
Sprinkling a layer of wood ash around the base of plants a couple of times each week will repel some surface-feeding insects, slugs, and snails by causing dehydration. Wood ash is very fine and gritty, so it works well to deter chewing insects when dusted over certain crops. Once ash gets wet, however, it loses its deterring properties. Continuous use of ash may increase the soil pH or accumulate salts to levels harmful to plants.

Neem (Azadirachta indica)
Neem trees are abundant in many regions and can be used as a very potent natural bioinsecticide. Neem’s extracts have an effect on nearly 400 species of insects, including major pests (moths, weevils, beetles, and leaf miners). The most effective insecticide comes from the seed, but the leaves can also be used. These extracts do not kill insects directly but effectively prevent their reproduction.
Recipe: Dry leaves in shade, as UV rays from the sun break down azadirachtin, their principal chemical compound. When leaves are dry, pound and mix a generous handful of the powder with 10 liters of water. Let steep for 12 to 24 hours. Strain and apply during the evening watering.

Gliricidia (Gliricidia sepium)
Gliricidia is a wonderful tree for soil amelioration due to its ability to fix nitrogen. Its leaves can also provide an insecticide that is effective on both chewing and boring insects.
Recipe: There are two ways to use Gliricidia. First, pick leaves and place near plants to be protected. When they become dry, remove or leave as mulch, and reapply fresh ones. Second, pound a generous amount of leaves, add a small amount of water, and soak for 24 hours. Strain and apply during the evening watering.

Tobacco (Nicotiana tabacum)
Tobacco contains nicotine, which can be used as a potent insecticide. (Be careful, as nicotine is a poison and high concentrations can be lethal.) Target organisms include aphids, cabbage worms, caterpillars, flea beetles, grain weevils, leaf miners, mites, stem borers, thrips, rust, some fungi, and leaf-curl virus. Note: Do not use on tomatoes, eggplants, peppers, or potatoes.
Recipe: First, dry and pound the leaves. Add 20 grams of tobacco to 1 liter of water, soak overnight, and apply during the evening watering.

Soap Solution
Certain brands of hand soap, particularly the local homemade varieties that are plant-based, and some liquid dish detergents can be used in solution as a contact insecticide. (Dry dish soaps and clothes washing detergents should not be used.) To be effective, a soap spray must be applied directly and must thoroughly cover the insect. Most soft-bodied insects and mites are susceptible to soap sprays, including aphids, caterpillars, lace bugs, leaf hoppers, mealy bugs, mites, liver worms, saw flies, scale crawlers, spittlebugs, springtails , thrips, and white flies. Soap solutions can be harmful to certain plants, so caution must be used. If in doubt, test a small area on the plant and wait 24 hours to see if there is an effect. To be safe, always rinse the area treated with water a few hours after application of soap spray.
Recipe: Use 2 tablespoons of grated soap per 1 1/2 liters of water. Apply directly with watering can or homemade broom.

Bug Juice Spray
Gardeners use these sprays effectively to control pests. Pests of a given species will not feed on the plants if members of their colony are found dead on those plants. The smell serves as a repellent and as a warning for the other incoming pests. This is an especially effective insecticide for small garden plots or nursery spaces, but not practical for large-scale operations.
Recipe: Liquefy one-half cup of the targeted beetles, bugs, caterpillars, or slugs in 2 cups of lukewarm water by grinding and straining. (It’s easiest to make this concoction by mashing the bugs and slowly adding in the water.) Dilute one-fourth cup of the bug juice with 1 1/2 cups of water, and spray all plant surfaces thoroughly.

Hillbilly Breath
This homemade insecticide can be used as a catch-all as it deters many different types of insect pests.
Recipe: Mix together in water some chopped mint, ash, garlic, tobacco, and no more than 1 tablespoon of soap. Steep the concoction for 24 hours, strain, and apply the solution with a watering can or a homemade broom.

Beer
Beer attracts slugs. Place a saucer or cup just below the soil surface and fill it with beer. Slugs finding their way into the container will not be able to get out and will drown.

Standard Procedures for the Preparation and Application of Homemade Extracts

  1. Use utensils for the extract preparation that are not used for food preparation, for drinking, or as cooking water containers. Clean all the utensils thoroughly after using them.
  2. Do not have direct contact with the crude extract while in the process of preparation or during application.
  3. Make sure to place the extract out of the reach of children and house pets when leaving it overnight.
  4. Harvest all of the mature and ripe fruits from any plant before extract application.
  5. Always test the extract formulation on a few infected plants before going into large-scale spraying.
  6. Wear protective clothing while applying the extract.
  7. Wash hands after handling the extract.

These recipes are courtesy of the Peace Corps Gardens Training Package..

The Health Benefits Of Lemons

Lemon juice is one of my favorite juices to have first thing in the morning. I use it for allergies and when I am feeling congested. I started a morning routine of lemon juice when I was diagnosed with bronchitis. I was fed up with taking antibiotics as my only option. After reading an article on the health benefits of lemon juice on colds, I decided to try it. I got up each morning before I put any food in my stomach I would drink a glass of hot lemonade no sugar. After a couple of weeks, I noticed the improvement the congestion in my chest started clearing up naturally. Now I use hot lemon teas every time I feel a cold coming on or my allergies start acting up. So, what is so amazing about lemons?

Lemon fruit (Citrus limon) is one of the most widely consumed fruits, either directly or used in soft drinks, alcoholic drinks, and cooking. Lemons are rich in citric acid, vitamin C, and polyphenols.

Brief history:

The true origin of lemons is not entirely known. They are thought to have originated in north-western India. It is known that lemons were introduced to southern Italy around 200 AD and have been cultivated in Egypt and Iran since 700 AD. Arabs spread lemons throughout the Mediterranean area during the early 2nd century.

Lemon contains some very real health benefits such as:

Vitamin C
Lemons are an excellent source of vitamin C, which has a wide array of benefits. Vitamin C is an antioxidant and has been known to help your skin, immune system, reduce the risk of complications from a cold or flu, and reduce inflammation in the body.

Drinking lemon water in the morning of a glass of orange juice will give you the same vitamin boost with far less sugar or calories.

Improves your cholesterol

According to the Agricultural Research Service at the U.S. Department of Agriculture, compounds in citrus fruits called citrus limonoids have protective properties against cancer. One type of limonoid, called limonin, may also help reduce cholesterol.

According to research by the U.S. Agricultural Research Service, limonin may remain in the bloodstream for up to 24 hours for some people. This means you won’t have to continuously consume lemons in order to reap the health benefits.

Energy Booster

Lemons are a natural energy booster and adding lemon juice to water packs a quick electrolyte punch. An Ohio State University study also showed lemon may enhance the mood with aromatherapy.

Improves digestion

Lemon water is a great drink for the digestive system. The high acidity in lemons stimulates the production of hydrochloric acid, which improves digestion. Lemons slow the absorption of food and help your body to break down the nutrients it needs.

How to choose lemons

Lemons can be found year-round in supermarkets; however, they are most plentiful and flavorful in the winter months. Lemons grow best in warm environments, such as California and Florida.

Choose lemons that are bright yellow with firm, smooth skin and heavy for their size. Avoid a lemon that is soft, spongy, wrinkled, or has bumpy, rough, or hard skin. Coarse, thick-skinned, and light lemons will have less juice.

Store

Store unwashed lemons at room temperature for
up to 2 weeks, or in a resealable plastic bag in the
refrigerator for up to 6 weeks. Leftover lemon
juice can be frozen and used later.

Use

Rinse lemons thoroughly before preparing. If juicing a lemon, leave it at room temperature. To
get the most juice out of the lemon, roll between the palm of your hand and the countertop. It
takes about 6 medium lemons to get 1 cup of lemon juice. One medium lemon will give 3
tablespoons of juice and 2 to 3 teaspoons of grated peel.

Eat
Lemons are an acidy fruit that is not generally eaten as a whole fruit, but more as a zest, a garnish or to add flavor to a favorite recipe. Lemons can be used with fish and salads.

Fun Facts

  • During the reign of King Louis XIV of France, Ladies used lemons to redden their lips.
  • All British ships were equipped with lemons and limes to prevent the sailors from developing scurvy.
  • California, Arizona, and Florida are the leading producers of lemons in the US.
  • There are three main types of lemons- acidic, rough, and sweet.
  • Lemon trees can grow for 150 years

Why Bookkeeping Is So Important To Your Business

Small Business Bookkeeping is just one of your 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. Bookkeeping is the first part of the accounting process, so the work of a bookkeeper and accountant often overlaps.

Difference between an Accountant and a Bookkeeper

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.

Benefits Of Keeping Good Records

The number one reason for keeping good records is to be in compliance with the law! Record keeping is also about understanding your business, now and in the future. Reasons why you should keep good records include:

1. Detail Tracking

Owning a small business will require you 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.

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

By far computer accounting software is a great option for handling your bookkeeping needs. I could not live without it! 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.  

If you are starting your first business, you will quickly find out how important accounting software is to the success of the business. Accounting software keeps track of business financial records such as sales, expenses, inventory, and assets. The software delivers many advantages over manual systems, helping you to execute, manage, and track your critical financial transactions and related financial activities.

Small business accounting software will help to systematically organize your financial information, in a way that is easy to access. For example, if you want to know if a certain bill was paid, an accounting system should be able to tell you not only when the bill was paid, but the check number, and other details, such as details you may have recorded about the vendor. If you lose an invoice or a bill, information for sending duplicate invoices or bills can be found in the program.

You can also save money on tax preparation every year because your information will be well organized, not in manually-entered notebooks or in shoe boxes. You will also be able to generate specific income and expense reports as needed.

Spreadsheets

Spreadsheet software is commonly used in business to track information about clients, inventory, sales, employee timesheets, and much more.

Record Retention

Not only should small business owners keep good records, but owners should also know which of those records to retain and for how long. Record retention is the practice of keeping business and personal records over time.

The Internal Revenue Service (IRS) determines some record retention guidelines. Other retention requirements are legal in nature, such as what may be required by contract with those you do business with. Expert recommendations vary. Also, retention schedules vary by region. For example, a state may have a different statute of limitation for legal liability (lawsuits). Check with your attorney for legal requirements. Check with your accountant for financial-related requirements.

Three Key Points to Remember

1. As a small business owner you will need to track a significant amount of information. No matter the type, size, or complexity of your business, establish and maintain a proper record-keeping system that is suited to your particular business needs.

2. Regardless of whether you use a computer system, cloud-based computing, or a combination of these two, you will need to think about business accounting software.

3. Pick one record-keeping system or use a combination—but start now.

Beginners Guide to Using Gnucash

Before you begin working on GnuCash, It is recommended you have a basic understanding of Accounting Concepts, and that you understand this section before proceeding.

GnuCash is easy enough to use that you do not need to have a complete understanding of accounting principles to find it useful. However, you will find that some basic accounting knowledge will prove to be invaluable as GnuCash was designed using these principles as a template.

The 5 Basic Accounts

Basic accounting rules group all finance-related things into 5 fundamental types of “accounts”. That is, everything that accounting deals with can be placed into one of these 5 accounts:

Assets -Things you own

Liabilities -Things you owe

Equity- Overall net worth

Income – Increases the value of your accounts

Expenses – Decreases the value of your accounts

It is clear that it is possible to categorize your financial world into these 5 groups.

For example, the cash in your bank account is an asset, the business loan you owe the bank is a liability, money earned in the course of your business is income, and the cost of office supplies for your business is an expense.

The Accounting Equation

The relationship between 5 basic accounts and how one type of account affect the others:

Assets – Liabilities = Equity

You can increase your equity through income, and decrease equity through expenses. For Example: when you receive sales income you become “richer” and when you pay for office expenses you become “poorer”. This is expressed mathematically in what is known as the

Accounting Equation:

Assets – Liabilities = Equity + (Income – Expenses)

This equation must always be balanced, a condition that can only be satisfied if you enter values to multiple accounts.

For example: if you receive money in the form of income you must see an equal increase in your assets.

As another example, you could have an increase in assets if you have a parallel increase in liabilities. Such as in the case of a business loan that increases your assets.

The Double Entry System of Accounting

GnuCash uses what’s called a double-entry accounting system. This is a formal system that’s a worldwide standard for accounting.

What a double-entry system means is that every single transaction or every record in GnuCash has at least two records that are going on behind the scenes. There are two transactions, a debit, and credit, and they have to add up to the same amount.

Most of the time, you don’t see this happening. For example, when I create an invoice, you’re sending it out to a customer, and an account of yours will get debited. That account is the accounts receivable account. It’s the account that’s waiting for this money.

When your customer pays you, that payment gets credited from your accounts receivable, and it’s being debited into your company’s checking account, which is where the money is arriving.

Every single transaction needs this double system to tell it where to go and where it’s coming from. In fact, different types of accounts will handle debts and credits differently. In some accounts, a credit means the account is decreasing in value, and in others, it means the account is increasing.

GnuCash makes it easy for newbies to enter debits and credit transactions by using the term deposits and withdrawals instead of debits and credits. If you prefer to use the term debits and credits it is possible to turn on that feature.

How To Set Up Your Small Business Accounting Records

The more you prepare your books, the easier recordkeeping will be.

1. Open a business banking checking account

Keep your business and personal finances separate. Opening a business checking account keeps your records organized. Check with your banking institution to find out what documentation you need to provide to open a business bank account.

Typically you would need the following information:

Social Security number
Employer Identification Number (EIN)
Business name
Business license
Organizing documents (e.g., articles of organization)

2. Decide on the accounting method you will use

Every business taxpayer is required to have an accounting method to report income and expenses. The two most commonly used methods are cash and accrual. Once you choose your accounting method, you must follow it consistently. Generally, you may not change your method of accounting unless you obtain permission from the IRS.

CASH METHOD

Due to its simplicity, the cash method is a popular choice for small businesses. To determine gross income, add up the cash, checks, and fair market value of property and services you receive during the year.

If you receive a check on December 28, 2011, but decide not to cash or deposit it until after December 31, 2011, you must still count the check as income in the year you received it.

Business expenses are usually deducted in the year they are paid. For example, you order office supplies in October 2011 and they arrive in December 2011. You send a check to pay for them in January 2012. Under the cash method, you should claim that business expense deduction on your 2012 tax return because that is the year you paid for the supplies. Certain businesses cannot use the cash method. In addition, special rules apply for the accounting of inventory.

ACCRUAL METHOD

With the accrual method, income is reported in the year in which all events that fix the right to receive it have occurred, and the amount can be determined with reasonable accuracy, even if income was received in a different year. For example, the accrual method calls for income to be reported when a service is performed. It doesn’t matter that the customer doesn’t pay until the following year.

Similarly, you deduct business expenses in the year the liability arises, regardless of when they are actually paid. Using the office supply example, under the accrual method, you may deduct the business expenses for supplies on your 2011 tax return, the year you ordered the supplies and they were delivered, even though you sent a check to pay for them in January 2012. You may deduct the expenses in 2011 because that is when you became liable for the expense

COMBINATION

Hybrid accounting, is a mixture of accrual and cash-basis accounting. Like the cash-basis method, you record income when you receive it, and record an expense when you make a payment. Hybrid accounting uses both cash and accrual methods.

3. Determine how your business will get paid

Determine what kinds of payments you will accept from your customers such as:

Cash
Check
Credit card
For instance if you have a business online your might use Paypal or Etsy payments to receive money from customers.

4. Set up a chart of accounts

A chart of accounts (COA) consists of the following five account categories:

Assets
Liabilities
Equity
Revenues
Expenses

Start by making a list of everything the business owns, owe, the methods you will use to receive money earned, and the expenses you expect to incur in the course of your business.

5. Keep good records of your income and expenses

Tracking expenses is a crucial part of accounting and in the long run it benefits you by reducing your tax obligation. When keeping a record of your income and expenses, be sure to hang onto the following:

Receipts
Bank and credit card statements
Invoices
Bills
Canceled checks
Proof of payments
Previous tax returns
Forms 1099 misc, 1099K, W-2
The more documentation you keep in your records, the better off your business and books will be. Organize accounting receipts and other documents by the month they occur.

6. Determine how you will record transactions

Manually recording transactions by hand is the most time-consuming option. And you should have a basic understanding of accounting before recording transactions in your books.

Hiring an accountant seems like a good option but it can get expensive for a small business on a budget.

Take advantage of accounting software and let it do the hard work for you. Free Accounting software such as GnuCash can be ideal for a small business on a budget.

7. Schedule a time to do your bookkeeping

Stick to a bookkeeping schedule a time when you will records your business transactions, daily, weekly or monthly. Don’t put off recording transactions to the last minute your will regret it!

Audacity

Audacity is a free and open-source digital audio editor and recording application software, available for Windows, macOS, Linux, and other Unix-like operating systems.   Audacity won the SourceForge 2007 and 2009 Community Choice Award for Best Project for Multimedia. Audacity is licensed under GPLv2 or any later version.

The interface is translated into many languages. You can use Audacity to:,•Record live audio., •Record computer playback on any Windows Vista or later machine., •Convert tapes and records into digital recordings or CDs., •Edit WAV, AIFF, FLAC, MP2, MP3, or Ogg Vorbis sound files., •Cut, copy, splice or mix sounds together. •Change the speed or pitch of a recording.

In addition to recording audio from multiple sources, Audacity can be used for post-processing of all types of audio by adding effects such as normalization, trimming, and fading in and out. Audacity has also been used to record and mix entire albums, such as by Tune-Yards. It is also currently used in the UK OCR National Level 2 ICT course for the sound creation unit.

Audacity’s features include:

  • Recording and playing back sounds
    • Scrubbing (Version 2.1.1 and later)
    • Timer Record enables the user to schedule when a recording begins and ends to make an unattended recording.
    • MIDI playback is available (from version 2.2.0 onwards)
    • Punch and Roll recording – for editing on-the-fly (from version 2.3.0 onwards)
  • Editing
    • via cut, copy, and paste, with unlimited levels of undo
    • Features of modern multitrack audio software including navigation controls, zoom and single track edit, project pane and XY project navigation, non-destructive and destructive effect processing, audio file manipulation (cut, copy, paste)
    • Amplitude envelope editing
    • Precise adjustments to the audio speed (tempo) while maintaining pitch in order to synchronize it with video or run for a predetermined length of time
    • Conversion of cassette tapes or records into digital tracks by splitting the audio source into multiple tracks based on silences in the source material
  • Cross-platform operation — Audacity works on Windows, macOS, and other Unix-like systems (including Linux and BSD)
    • Audacity uses the wxWidgets software library to provide a similar graphical user interface on several different operating systems.
  • A large array of digital effects and plug-ins. Additional effects can be written with Nyquist, a Lisp dialect.
    • Built-in LADSPA, VST(32-bit) and Nyquist plug-in support.
    • Noise Reduction based on sampling the noise to be minimized.
    • Vocal Reduction and Isolation for the creation of karaoke tracks and isolated vocal tracks.
    • Adjusting audio pitch while maintaining speed and adjusting audio speed while maintaining pitch
    • LADSPA, VST (32-bit) and Audio Unit (macOS) effects now support real-time preview (from version 2.1.0 onwards). Note: Real-time preview does not yet support latency compensation.
    • Saving and loading of user presets for effect settings across sessions (from 2.1.0 onwards).
  • Multitrack mixing
  • Support for multi-channel modes with sampling rates up to 96 kHz with 32 bits per sample.
  • Audio spectrum analysis using the Fourier transform algorithm
  • Importing and exporting of WAV, AIFF, MP3 (via the LAME encoder, now integrated as part of Audacity), Ogg Vorbis, and all file formats supported by libsndfile library. Versions 1.3.2 and later supported Free Lossless Audio Codec (FLAC). Version 1.3.6 and later also supported additional formats such as WMA, AAC, AMR and AC3 via the optional FFmpeg library.
  • Detection of dropout errors while recording with an overburdened CPU
  • From 2.3.2 onwards, mod-script-pipe for driving Audacity from Python now comes with Audacity and it can be enabled via preferences.
  • A full downloadable manual. (or available online without downloading).
  • Four user-selectable themes enable the user to choose their preferred look and feel for the application (version 2.2.0 and later)
    • Four user-selectable colorways for waveform display in audio tracks (version 2.2.1 and later).

Audacity supports the LV2 open standard for plugins and can therefore load software like Calf Studio Gear.

Audacity’s 3.0 update, in March 2021, introduced a new project file format, .aup3, using SQLite database to store everything.

Limitations

Audacity supports only 32-bit or 64-bit VST audio effect plug-ins, depending on which architecture it was built for, but not both at the same time. It is built-in 32-bit for Windows and 64-bit for macOS.

It does not support instrument VST (VSTi) plugins.

Audacity lacks dynamic equalizer controls and real-time effects while recording.

Audacity does not natively import or export WMA, AAC, AC3 or most other proprietary or restricted file formats; rather, an optional FFmpeg library is required.

To learn more visit the website …

AVG AntiVirus

Microsoft’s built-in Windows Defender protects Windows consumers from most malware, spyware, and viruses. There are a few free good virus protection programs available online. The free one I like to use is AVG. AVG AntiVirus FREE is super lightweight software that won’t affect your PC’s performance or speed.

AVG AntiVirus free version of the software, is a single anti-malware package that lets you protect an UNLIMITED number of Windows and Mac computers, as well as Android phones/tablets, from one easy-to-use dashboard. It’s also Zen-enabled, which means you can now extend your protection to your entire family and all their devices.

AVG features most of the common functions available in modern antivirus and Internet security programs, including periodic scans, scans of sent and received emails (including adding footers to the emails indicating this), the ability to repair some virus-infected files, and a quarantine area (virus vault) in which infected files are held.

To learn more visit the website …

Calibre

Calibre is a free and open-source e-book library management application developed by users of e-books for users of e-books. Calibre converts files to PDF, ePub, and other file types that work well on e-readers. Calibre can be used to create epubs for kindle and so much more. Calibre (stylised calibre) is a cross-platform open-source suite of e-book software.  Calibre is a powerful and easy to use e-book manager. It’ll allow you to do nearly everything and it takes things a step beyond normal e-book software. It’s also completely free and open source and great for both casual users and computer experts.

  • Save time on managing your e-book collection
  • Use it everywhere and with anything
  • Comprehensive e-book viewer
  • Download news/magazines from the web
  • Share and backup your library easily
  • Edit the books in your collection
  • Satisfy every e-book need and get support

Calibre supports organizing existing e-books into virtual libraries, displaying, editing, creating and converting e-books, as well as syncing e-books with a variety of e-readers. Editing books is supported for EPUB and AZW3 formats.

To learn more visit the website