I’m going to show you how you can keep organized accounting records, whether you operate a small business, are self-employed, freelancing or independent.
No doubt you have keep track of profits so you can pay estimate income taxes. You probably have fees, equipment, insurance, maybe some rent and utility expenses too. All of this is pretty easy to keep track of. The real problem is having to generate valid financial statements like the Income Statement, Balance Sheet and Trial Balance when you have no accounting experience. Sure, there are data base programs on the market that can do the job, but they can be too cumbersome to use, and too expensive to buy.
One thing people overlook is the time it takes to correct an entry error. And you know, we all make mistakes from time to time! Trust me on this one. I know. I have been a bookkeeper for most of my life.
If more people chose their accounting systems based on how long it takes to correct errors you would see a lot more efficient systems on the market. Just saying… :-)
Part I of the Solution - Use a system that is highly efficient. You probably have purchased highly efficient products in the past, like washing machines and clothes dryers. Another example would be LED lights. They are highly efficient because they use so little electricity. Think of your bookkeeping the same way. Your bookkeeping system needs to be highly efficient too. If it isn’t, you are wasting precious time.
We have an efficient bookkeeping system called Big E-Z Books. (I’ll explain how you can download a free trial in just a minute.) How do you know if it’s efficient? I won’t bore you with the details but it should be quick to set up, easy to learn, straightforward to use and fast to correct entry errors. It’s all about saving you time.
Part II of the Solution - Set up your system with the right income and expense categories. This sets the stage for a successful year of record keeping. As I mention in my bookkeeping tips, you need to start at the end. Determine which categories you need to track. You should come up with a combination of common categories most everyone uses like equipment, fees, supplies and expenses particular to your specific organization. (go to our Category Corner web page to see a list of expenses for your organization). Plan to take some time to tweak the list of categories we provide you. The point is to get meaningful reports out of the system you are using, and to do this in the easiest way, right?
Here are some questions to help you get started:
Part III of the Solution – Enter your data regularly - don’t procrastinate. Actually, record keepers and procrastinators don’t mix. Early in my career, I was hired as an assistant bookkeeper at a country club. Within the first two weeks, the head bookkeeper had been fired. That was shocking news to me. It seems she hadn’t reconciled the payroll checking account for a few months and someone was embezzling money. Big mistake.
If you’re behind in your record keeping, Big E-Z Books can help! We now have an import feature that works like a charm. I would suggest you practice importing using the Free Trial first. Once you are current, you will want to keep it that way. So, as long as you keep up with it throughout the year, you will have the summary totals needed for year end reporting. There is power in that! It is a great feeling to know you are in control of your accounting, you’re in balance and that you can trust the report totals that your accounting system produces.
I hope I’ve inspired you to get started on your accounting records. Here's a link to get a
Free Trial of Big E-Z Books. Download it today!
Check out my next blog post - How to Organize Your Receipts - Another Big E-Z Solution!