Author: Laura

The Importance Of The Accounting Period In Gnucash

Posted on | by Laura

Before you begin using Gnucash it is a good idea to set your accounting period. Even before you begin a new business you are required by the IRS to select your accounting period for reporting profit and loss. For IRS purposes, a “tax year” is an annual specified period of time for keeping your business records and reporting income and expenses.

CLICK ON THE BUTTON TO WATCH THE VIDEO – The Gnucash Accounting Period When to Select Relative or Absolute

Two methods used for an accounting period and approved by the IRs are.

  • A Calendar year – 12 consecutive months beginning January 1 and ending December 31.
  • A fiscal year’ which does not start on Jan1 and necessarily end on Dec31.

Some businesses and organizations prefer to keep records based on a ‘fiscal year’. For most small businesses, their accounting period will be based on the calendar year, 12 consecutive months beginning January 1 and ending December 31.

By setting up your accounting period preferences in Gnucash you are in essence telling the system this is the Starting date and ending date I want to use for my business accounting profit/loss calculations and net assets calculations. This is so important in bookkeeping, that you are able to keep track of the business’s profit and loss and provide evidence to the IRS based on your annual accounting period.

Not only can Gnucash accounting period preferences be used to produce reports based on the dates you set, but it can also be used to generate specific date range reports. This can be helpful to you when you want to know how your business finances are doing based on a specific period of time.

How To Setup The Accounting Period

In Gnucash the preferences feature is used to set up your accounting method and period. To begin select Edit from the menu bar, and when the menu opens select preferences.

By default, the accounting period is the first option. You have two choices here Relative and Absolute, choose Relative if your business uses the calendar year accounting period. 12 consecutive months beginning January 1 and ending December 31. Pictured below are the stand settings for a calendar year accounting period.

Select Absolute if your business uses the fiscal year accounting period. Both Relative and Absolute uses the dates you specify as the starting date and the ending date for profit/loss calculations and net assets calculations. The only thing you would do differently if your business uses the fiscal year accounting period is select absolute instead of Relative and set the start and ending options and dates specific to your business accounting period.

Generating Reports

The accounting period is also used for financial reports in GnuCash. You can use the accounting period to generate reports based on a specified date range. To view a standard report based on the present relative accounting period settings. Select reports on the menu bar and when the menu opens, select Income and expense, and when the submenu opens select profit and loss.

Here you have the Profit and loss report based on the dates set in preferences for the Relative accounting period.

Tour Of The GnuCash Interface

Posted on | by Laura

Each time you open GnuCash, you will find that the Tip of the Day screen pops up, ready and available to offer helpful tips about using the program: These helpful tips provide useful information for beginning users. To view more of the tips, click on next to continue viewing the tips. When you have finished Click Close to close out the Tip of the Day.

How to Setup The Chart of Accounts

Posted on | by Laura
How To Void An Unpaid A/ R Invoice Payment Transaction In GnuCash

Now that the program has been installed it is time to set up the chart accounts. The chart of accounts, or what Gnucash refers to as the account tree is what you will use to keep track of your business income and expenses.

To begin, open the Gnucash program by clicking the Gnucash shortcut icon on your desktop. The program created the icon when you installed the program, as long as you left that option checked. If you don’t see the shortcut on your desktop look for the program in your Windows start menu.

 

Small Business Bookkeeping Getting Started

Posted on | by Laura

Small Business Bookkeeping is every aspiring entrepreneur’s sole responsibility! But, it doesn’t have to be a burden, with the right tools you can do it! It doesn’t matter if you are making money in self-employment full or part-time. It doesn’t matter if your business is a sole proprietorship, partnership, or corporation, the success of your business depends on creating and maintaining an effective record-keeping system.

For tax purposes, you are required to keep good accounting records suited to your particular business needs. What it all boils down to, is proper record-keeping for small businesses makes the process easier and keeps you compliant with the law. Good record-keeping is also about understanding your business, now and in the future.

Good records can also show whether your business is improving, which items are selling, or what changes you need to make to increase the likelihood of business success. You don’t need a license, degree, or experience to do your own bookkeeping.

Difference Between An Account 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. With the use of computerized accounting systems, small business owners can do most of the work themselves and produce their own financial documents.

Your record-keeping system should 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 employer, you are required to maintain and report employee payroll for tax purposes.

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

You need good records of your financial transactions to prepare your tax returns. Your records must support the income, expenses, and any credits you report. Which may be able to save you thousands of dollars.

Supporting documents you will need 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.

Manual Bookkeeping Vs Computerized Bookkeeping

With manual bookkeeping business accounting records are entered into a notebook or journal. You should have a little basic understanding of the types of small business accounts and then there are the Debits and Credits which are a part of The Accounting Equation. Transactions are entered using debits and credits, debits and credits can be the most confusing part of bookkeeping for beginners. You will also have to decide what accounting method you will use to enter your transactions.

Computerized Bookkeeping

Computer accounting software is ideal for handling your small business bookkeeping quickly and easily. 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, because 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 or the credit side.  

QuickBooks is the industry standard but some small businesses may find it costly when just starting out in business. GnuCash is a free open-source small business accounting software that may not have all the bells and whistles like QuickBooks, but it gets the job done and best of all it’s free.

Make Money Publishing Kindle e-books

Posted on | by Laura

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!